Registration Statement for Securities Offered Pursuant to a Transaction — Form S-3
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-3 Registration Statement for Securities Offered 32 114K
Pursuant to a Transaction
2: EX-5.1 Opinion of Silverman, Collura & Chernis, P.C. 2 8K
3: EX-23.2 Consent of Kpmg LLP 1 6K
S-3 — Registration Statement for Securities Offered Pursuant to a Transaction
Document Table of Contents
As filed with the Securities and Exchange Commission on October 18, 2000
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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HEMISPHERX BIOPHARMA, INC.
(Name of Issuer in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
(Primary Standard Industrial Classification Code Number)
52-0845822
(I.R.S. Employee Identification No.)
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1617 JFK Boulevard
Philadelphia, Pennsylvania 19103
(215) 988-0080
(Address and telephone number of principal executive
offices and principal place of business)
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William A. Carter, M.D., Chief Executive Officer
Hemispherx Biopharma, Inc.
1617 JFK Boulevard
Philadelphia, Pennsylvania 19103
(215) 988-0080
(Name, address and telephone number of agent for service)
Copies of all communications to:
Gary W. Mair, Esq.
Silverman, Collura & Chernis, P.C.
381 Park Avenue South, Suite 1601
New York, New York 10016
(212) 779-8600
Approximate date of proposed sale to the public: From time to time or at
one time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, as amended ("Securities Act"), other than securities offered only in
connection with dividend or reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to 462(c) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
[Enlarge/Download Table]
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Proposed Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Price Aggregate Amount of
Securities to be Registered (1) Registered (2) Per Share(3) Offering Price Registration Fee
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Common Stock (4) 500,000 7.02 $ 3,510,000 975.78
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Common Stock (5) 755,000 7.02 $ 5,300,100 1,473.43
=====================================================================================================================
Warrants (6) 755,000 7.02 $ 5,300,100 1,473.43
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TOTAL 2,010,000 $14,110,200 $3,922.64
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(1) This Registration Statement covers offers, sales and other distributions
of the securities listed in this table from time to time at prices to be
determined, as well as common stock issuable upon the exercise of warrants
so offered or sold.
(2) Pursuant to Rule 416 of the Securities Act of 1933, as amended, there are
also being registered an indeterminate number of additional shares of
common stock as may become issuable upon exercise of warrants to prevent
dilution resulting from stock splits, stock dividends or similar
transactions.
(3) Estimated solely for the purpose of computing the registration fee in
accordance with Rules 457(c) and 457(h) of the Securities Act by
multiplying (1) 2,010,000, the maximum number of shares of common stock of
the Registrant to be issued pursuant to the number of shares of our common
stock issuable under warrants held by selling stockholders and the
issuance of common stock offered by Hemispherx, by (2) $7.02 the average
of the bid and asked prices of the shares of common stock of the
Registrant reported on the American Stock Exchange on September 29, 2000.
(4) Represents common stock offered by Hemispherx.
(5) Represents 755,000 shares of our common stock issuable upon exercise of
warrants held by selling stockholders.
(6) Warrants held by selling stockholders.
The Registrant hereby amends this registration statement on the date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this registration
statement
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shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the registration statement shall
become effective on a date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
Where you can find more information about Hemispherx
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any document we file at the Securities and Exchange Commission's public
reference room in Washington, D.C., New York, New York, and Chicago, Illinois.
Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further
information on the public reference rooms. Our filings are also available at the
Commission's web site, http://www.sec.gov.
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HEMISPHERX BIOPHARMA, INC.
755,000 warrants and the common stock issuable upon exercise of the warrants
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The selling stockholders or their transferees, pledgees, donees or
successors may sell, from time to time, in one or more offerings:
o 755,000 warrants to purchase shares of our common stock;
o 755,000 shares of common stock underlying the warrants; and
o we may sell, from time to time, in one or more offerings 500,000
shares of common stock owned by us.
We are also registering 755,000 shares of common stock for their exercise
by members of the public.
We will not receive proceeds from the resale of our stockholders shares
underlying our warrants; however, we will receive proceeds from the sale of
500,000 shares of our common stock owned by us and from the exercise of our
warrants by the selling stockholders or their transferees, pledges, donees or
successors, if and when they exercise their warrants.
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Please see the risk factors beginning on page 3 to read about certain
factors you should consider before buying shares of common stock.
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Hemispherx's common stock is listed on the American Stock Exchange under
the symbols HEB. The reported last sale price on the American Stock Exchange on
September 29, 2000 was $7.125.
The mailing address of our principal executive offices is 1617 JFK
Boulevard, Philadelphia, Pennsylvania 19103, and the telephone number is (215)
988-0080.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is _______, __, 2000
Prospectus Summary
Because this is a summary, it may not contain all information that may be
important to you. You should read this entire prospectus, including the
information incorporated by reference and the financial data and related notes,
before making an investment decision. When used in this prospectus, the terms
"we," "our" and "us" refer to Hemispherx and not to the selling stockholders.
Hemispherx
Hemispherx is a pharmaceutical company using genetic technologies to
develop therapeutic products for the treatment of viral diseases and certain
cancers. Ampligen(R), our lead compound, is in advanced human clinical
development for various therapeutic indications. We have clinically evaluated
Ampligen(R) in patients for different therapeutic indications. Clinical studies
show that Ampligen(R) has the potential to act as an antiviral agent against a
large number of different viruses, including myalgic encephalomyelitis, also
known as chronic fatigue syndrome, HIV infection and hepatitis B, as well as a
treatment for certain cancers. Clinical trials conducted in the early 1990's
indicate that Ampligen(R) may have potential in the treatment of metastatic
renal cell cancer and malignant melanoma. Ampligen(R) appears to stimulate the
immune system and is generally well tolerated. We are currently conducting Phase
III human clinical trials for the therapeutic treatment of chronic fatigue
syndrome. Our strategy is designed around obtaining the required regulatory
approval to allow the progressive introduction of Ampligen(R) and other similar
compounds.
Recent Developments.
We announced in April, 2000 that we would provide Ampligen(R) to certain
HIV treatment specialists in the United States for Food and Drug Administration
authorized emergency treatment of individuals with AIDS who are developing
resistance to currently approved treatment regimens. We also reported that Ex
vivo tests conducted at the University of California-Irvine may provide new
insight into the possible treatment of the newly emerging types of HIV virus
which mutate into drug resistance forms.
In June, 2000, we announced that we received Food and Drug Administration
Authorization to conduct a major Phase II/III clinical study to involve 100 HIV
patients exhibiting resistance to treatment with existing antiviral drugs and
combinations of drugs.
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Risk Factors
Special Note Regarding Forward-Looking Statements
Any statements in this prospectus about our expectations, beliefs, plans,
objectives, assumptions or future events or performance are not historical facts
and are forward-looking statements. These statements are often, but not always,
made through the use of words or phrases such as "will," "will likely result,"
"expect," "will continue," "anticipate," "estimate," "intend," "plan,"
"projection," "would," "should" and "outlook." Accordingly, these statements
involve estimates, assumptions and uncertainties, which could cause actual
results to differ materially from those expressed in them. Any forward-looking
statements are qualified in their entirety by reference to the factors discussed
throughout this prospectus. The following cautionary statements identify
important factors that could cause our actual results to differ materially from
those projected in the forward-looking statements made in this prospectus. Among
the key factors that have a direct bearing on our results of operations are:
1. We may continue to incur substantial losses and our future profitability
is uncertain.
We began operations in 1966 and last reported net profits from 1985
through 1987. Since 1987, we have incurred substantial operating losses. As of
June 30, 2000 our accumulated deficit was approximately $74,949,079. We have not
yet generated significant revenues from our products and may incur substantial
and increased losses in the future. We cannot assure you that we will ever
achieve significant revenues from product sales or become profitable. We
require, and will continue to require, the commitment of substantial resources
to develop our products. We cannot assure you that our product development
efforts will be successfully completed or that required regulatory approvals
will be obtained or that any products will be manufactured and marketed
successfully, or become profitable.
2. Additional financing requirements.
The development of our products has required and will continue to require
the commitment of substantial resources to conduct the time-consuming research,
preclinical development, and clinical trials that are necessary to bring
pharmaceutical products to market, and to establish commercial-sale production
and marketing capabilities. Based on our current operating plan, we anticipate
that receipt of limited revenues from the sales of Ampligen(R) under the cost
recovery clinical programs and investors exercising our Class A redeemable
warrants together with our current assets, will be sufficient to meet our
capital requirements for the near
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future. We may need to raise substantial additional funds through additional
equity or debt financing, collaborative arrangements with corporate partners,
off balance sheet financing or from other sources in order to complete the
necessary clinical trials and the regulatory approval processes and begin
commercializing our products. If adequate funds are not available from
operations, as is anticipated, and if we are not able to secure additional
sources of financing on acceptable terms, our business will be materially
adversely affected. Because of our long-term capital requirements, we may seek
to access the public equity market whenever conditions are favorable, even if we
do not have an immediate need for additional capital at that time.
3. We recently received a Food and Drug Administration warning letter in
connection with our web site
We received a warning letter from the Food and Drug Administration
regarding the contents of our corporate website. The Food and Drug
Administration letters referenced two "hyperlinks" (visualized as "icons")
within the corporate website. One of the referenced hyperlinked "icons" had been
discontinued by us approximately four months prior to receipt of the notice.
These hyperlinked, but separate, websites (which were wholly owned and operated
by individuals separate from us) contained information which was deemed
"promotional" in nature, i.e., imputing safety and efficacy of an unapproved and
experimental medication. Our two "hyperlinks" (i.e., facilitated communications)
with distal or remote websites were deemed to be potentially a Food and Drug
Administration violation; accordingly, we undertook immediate steps to cooperate
fully and eliminate all "hyperlinks", whether scientific, medical or business in
nature to any other websites on the worldwide web. We also requested a
comprehensive "Standard Operating Procedure" from our hyperlinks webmaster in an
effort to insure that no alterations to our corporate website including, without
limitation, the introduction of hyperlinks are effectuated without the express
consent of our Executive Committee. The full text of the Food and Drug
Administration letters can be obtained at the Food and Drug Administration
website at www.FDA.com.
4. We recently received a letter from the Food and Drug Administration
objecting to three press releases of ours
The Food and Drug Administration objected to three recent press releases
which described certain ex vivo (outside the body) results with Ampligen(R) and
14 already approved antiretroviral medications. The experimental results were
conducted by independent researchers at the University of California and were
being presented at various scientific meetings under independent peer review. To
avoid a potential misunderstanding of the Company's publications of these
independent ex vivo results as imputing potential human safety and potential
efficacy of an experimental medication still in Phase 2/3 clinical trials, we
initiated a program to utilize a broad-based disclaimer with all subsequent
press releases (and within our website), regardless of
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the specific scientific/medical content. We believe that all of our own
corporate statements cited in the Food and Drug Administration letters were
materially correct in technical content and that the deletion of the hyperlinks
is in compliance with the intent of regulatory guidelines regarding the
dissemination of publicly available information on our experimental drug
development programs.
5. Uncertainty of additional funding.
There can be no assurance that any additional funding will be available to
us on terms which are acceptable, if at all. Any additional funding may result
in significant dilution to our stockholders and could involve the issuance of
securities with rights which are senior to those of existing stockholders. We
may also need additional funding earlier than anticipated, and our cash
requirements in general may vary materially from those now planned, for reasons
which include, but not limited to, changes in our research and development
programs, clinical trials, competitive and technological advances, the
regulatory process, and higher than anticipated expenses, and lower than
anticipated revenues from certain of our clinical trials as to which cost
recovery from participants has been approved.
6. No regulatory agency has approved the full commercial sale of any of our
products.
We cannot assure you that Ampligen(R) will ultimately be demonstrated to
be safe or efficacious. While Ampligen(R) is authorized for use in clinical
trials in the United States and in other countries, we cannot assure you that:
o additional clinical trial approvals will be authorized in the United
States or in other countries in a timely fashion or at all;
o that we will complete our clinical trials; or
o that Ampligen(R) will be commercially successful in any country that
may approve its use.
If Ampligen(R) or one of our other products does not receive regulatory
approval in the United States or elsewhere, our operations will be significantly
affected.
7. We may not be profitable unless we can protect our patents and/or receive
approval for additional pending patents.
We need to acquire enforceable patents covering the use of Ampligen(R) for
a particular disease in order to obtain exclusive rights for the commercial sale
of Ampligen(R) for such use. Our success depends, in large part, on our ability
to obtain patent protection for our products and to obtain and preserve our
trade secrets and knowhow. We have been issued certain patents on the use of
Ampligen(R) and in combination with certain other drugs for the treatment of
HIV,
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chronic hepatitis B virus, chronic hepatitis C virus, and a patent, which
affords protection on the use of Ampligen(R) in patients with chronic fatigue
syndrome. We have not been issued any patents in the United States for the use
of Ampligen(R) as a sole treatment for any of the cancers which we have sought
to target. Our applications for United States patents for the use of Ampligen(R)
in the treatment of renal cell carcinoma and lung cancer are currently pending.
We cannot assure you that any of these applications will be approved or that our
competitors will not seek and obtain patents regarding the use of Ampligen(R) in
combination with various other agents. If we cannot protect our patents covering
the use of Ampligen(R) for a particular disease, or obtain additional pending
patents, we may not be able to successfully market Ampligen(R).
8. The patent position of biotechnology and pharmaceutical firms is highly
uncertain and involves complex legal and factual questions.
No consistent policy has emerged regarding the breadth of protection
afforded by pharmaceutical and biotechnology patents. There can be no assurance
that patent applications relating to our products or technology will result in
patents being issued or that, if issued, such patents will afford meaningful
protection against competitors with similar technology. It is generally
anticipated that there may be significant litigation in the industry regarding
patent and intellectual property rights and that such litigation could require
substantial resources from us. No assurance can be made that our patents will
provide competitive advantages for our products or will not be successfully
challenged or circumvented by our competitors. No assurance can be given that
patents do not exist or could not be filed which would have a materially adverse
affect on our ability to market our products or to obtain or maintain any
competitive position we may achieve with respect to our products.
9. Inability to enforce our patent rights could result in our needing to
acquire licenses which may not be available.
If we cannot enforce the patent rights we currently hold we may be
required to obtain licenses from others to develop, manufacture or market our
products. There can be no assurance that we would be able to obtain any such
licenses on commercially reasonable terms, if at all. We license certain
proprietary information from third parties, some of which may have been
developed with government grants under circumstances where the government
maintained certain rights with respect to the proprietary information developed.
No assurances can be given that such third parties will adequately enforce any
rights they may have or that the rights, if any, retained by the government will
not adversely affect the value of our license.
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10. We do not expect to be profitable unless we receive final regulatory
approval for Ampligen(R) and it is successfully commercialized.
Ampligen has not been approved for commercial use in the United States or
elsewhere. We do not expect to be profitable unless we receive final regulatory
approval and can successfully commercialize Ampligen(R) or one of our other
products. Our products, including Ampligen(R), are subject to extensive
regulation by numerous governmental authorities in the United States and other
countries, including, but not limited to, the Food and Drug Administration in
the United States, the Health Protection Branch of Canada's Department of Health
and Welfare, a federal regulatory agency in Canada, and the European Medical
Evaluation Agency in Europe. Obtaining regulatory approval is a rigorous and
lengthy process and requires the expenditure of substantial resources. In order
to obtain final regulatory approval of a new drug, we must demonstrate to the
satisfaction of the regulatory agency that the product is safe and efficacious
for its intended use and that we are capable of manufacturing the product to the
applicable regulatory standards. We require regulatory approval in order to
market our products and receive product revenues or royalties.
11. We may not be profitable unless we can produce Ampligen(R) in commercial
quantities at costs acceptable to us.
We have never produced Ampligen(R) or any other product in large commercial
quantities. Ampligen(R) is currently produced only for use in clinical trials.
We must manufacture our products in compliance with regulatory requirements at
commercial quantities and at acceptable costs in order for us to be profitable.
We intend to utilize third-party manufacturers and/or facilities if and when the
need arises or, if we are unable to do so, to build or acquire commercial-scale
manufacturing facilities. If we cannot manufacture commercial quantities of
Ampligen(R) or enter into third party agreements for its manufacture at costs
acceptable to us, our operations will be significantly affected.
12. If our distributors do not market our product successfully, we may not
generate significant revenues or become profitable.
We have limited marketing and sales capability. We need to enter into
marketing agreements and third party distribution agreements for our products in
order to generate significant revenues and become profitable. To the extent that
we enter into co-marketing or other licensing arrangements, any revenues
received by us will be dependent on the efforts of third parties, and there is
no assurance that these efforts will be successful. Our agreement with Gentiva
Health Services offers the potential to provide significant marketing and
distribution
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capacity in the United States, while Bioclones, Ltd. will be responsible for
fielding an adequate sales force in South America, Africa, United Kingdom,
Australia and New Zealand.
Gentiva Health Services is able to deliver treatment and services to
chronic disease patients including infusion services, home nursing and other
medical services through a national network of more than 500 locations. We
cannot assure you that Gentiva Health Services or our foreign marketing partners
will be able to successfully distribute our products, or that we will be able to
establish future marketing or third party distribution agreements on terms
acceptable to us, or that the cost of establishing these arrangements will not
exceed any product revenues. The failure to continue this arrangement or to
achieve other such arrangements on satisfactory terms could have a materially
adverse effect on us. We are dependent upon certain third party suppliers for
key components of our proposed products and for substantially all of the
production process. If we cannot enter into future marketing and distribution
agreements at terms acceptable to us, or if these distributors cannot
effectively market and distribute our products, our operations will be
negatively affected.
13. No Assurance of Successful Product Development.
The development of new pharmaceutical products is subject to a number of
significant risks. Potential products that appear to be promising at an early
stage of research or development may not reach the market for a number of
reasons. Potential products may be found to be ineffective or to have adverse
side effects, fail to receive necessary regulatory clearances, be difficult to
manufacture on a commercial scale, be uneconomical to market or be precluded
from commercialization by proprietary rights of third parties. Our products are
in various stages of clinical and pre-clinical development. Each product will
need to progress through further clinical studies and appropriate regulatory
approval processes before any such products can be marketed. We do not know
when, if ever, Ampligen(R) will be available for commercial sale for any
implication, if at all. Generally, only a small percentage of potential
therapeutic products are eventually approved by the Food and Drug Administration
for commercial sale. The transition from limited production of pre-clinical and
clinical research quantities to production of commercial quantities of our
products will involve distinct management and technical challenges and will
require additional management and technical personnel and capital to the extent
such manufacturing is not handled by third parties. There can be no assurance
that our efforts will be successful or that any given product will be determined
to be safe and effective, capable of being manufactured economically in
commercial quantities or successfully marketed.
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14. There is no assurance that successful manufacture of a drug on a limited
scale basis for investigational use will lead to a successful transition
to commercial, large-scale production.
Small changes in methods of manufacturing may affect the chemical
structure of Ampligen(R) and other such RNA drugs, as well as their safety and
efficacy. Changes in methods of manufacture, including commercial scale-up, can,
among other things, require new clinical studies.
15. Rapid Technological Change.
The pharmaceutical and biotechnology industries are subject to rapid and
substantial technological change. Technological competition from pharmaceutical
and biotechnology companies, universities, governmental entities and others
diversifying into the field is intense and is expected to increase. Most of
these entities have significantly greater research and development capabilities
than us, as well as substantial marketing, financial and managerial resources,
and represent significant competition for us. There can be no assurance that
developments by others will not render the our products or technologies obsolete
or noncompetitive or that we will be able to keep pace with technological
developments.
16. Substantial Competition.
Competitors have developed or are in the process of developing
technologies that are, or in the future may be, the basis for competitive
products. Some of these products may have an entirely different approach or
means of accomplishing similar therapeutic effects to products being developed
by us. These competing products may be more effective and less costly than our
products. In addition, conventional drug therapy, surgery and other more
familiar treatments will offer competition to the our products. Furthermore,
many of our competitors have significantly greater experience than us in
pre-clinical testing and human clinical trials of pharmaceutical products and in
obtaining regulatory approvals of products. Accordingly, our competitors may
succeed in obtaining product approvals more rapidly than us. If any of our
products receive regulatory approvals and we commence commercial sales of our
products, we will also be competing with respect to manufacturing efficiency and
marketing capabilities, areas in which we have no experience. Our competitors
may possess or obtain patent protection or other intellectual property rights
that prevent, limit or otherwise adversely affect our ability to develop or
exploit our products.
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17. Limited Manufacturing Experience and Capacity.
Ampligen(R) is currently produced only in limited quantities for use in
our clinical trials. To be successful, our products must be manufactured in
commercial quantities in compliance with regulatory requirements and at
acceptable costs. To the extent we are involved in the production process, our
current facilities are not adequate for the production of our proposed products
for large-scale commercialization, and we currently do not have adequate
personnel to conduct commercial-scale manufacturing. We intend to utilize
third-party facilities if and when the need arises or, if it is unable to do so,
to build or acquire commercial-scale manufacturing facilities. We will need to
comply with regulatory requirements for such facilities, including those of the
U.S. Food and Drug Administration and The Canadian Health Protection Branch
pertaining to Good Manufacturing Practices regulations. There can be no
assurance that such facilities can be used, built, or acquired on commercially
acceptable terms, that such facilities, if used, built, or acquired, will be
adequate for our long-term needs.
18. We may be subject to product liability claims from the use of Ampligen(R)
or other of our products which could negatively affect our future
operations.
We face an inherent business risk of exposure to product liability claims
in the event that the use of Ampligen(R) or our other products result in adverse
effects. This liability might result from claims made directly by patients,
hospitals, clinics or other consumers, or by pharmaceutical companies or others
manufacturing these products on our behalf. Our future operations may be
negatively affected from the litigation costs, settlement expenses and lost
product sales inherent to these claims. While we will continue to attempt to
take appropriate precautions, we cannot assure you that we will avoid
significant product liability exposure. Although we currently maintain worldwide
product liability insurance coverage in the amount of $1,000,000, there can be
no assurance that this insurance will provide adequate coverage against product
liability claims. While no product liability claims are pending or threatened
against us to date, a successful product liability claim against us in excess of
our insurance coverage could have a negative effect on our business and
financial condition.
19. Members of our Scientific Advisory Board may have conflicting interests
and may disclose data and technical knowhow to our competitors.
Some of our Scientific Advisory Board members are employed by other
entities, which may include our competitors. Although we require each of our
Scientific Advisory Board members to sign a non-disclosure and non-competition
agreement with respect to the data and information that he or she receives from
us, we cannot assure you that members will abide by them. If a member were to
reveal this information to outside sources, accidentally or otherwise, our
operations could be negatively effected. Since our business depends in large
part on our
10
ability to keep our knowhow confidential, any revelation of this information to
a competitor or other source could have an adverse effect on our operations.
20. There is no guarantee that our trade secrets will not be disclosed or
known by our competitors.
To protect our rights, we require certain employees and consultants to
enter into confidentiality agreements with us. There can be no assurance that
these agreements will not be breached, that we would have adequate and
enforceable remedies for any breach, or that any trade secrets of ours will not
otherwise become known or be independently developed by our competitors.
21. The loss of Dr. Carter's services could hurt our chances for success.
Our success is dependent on the continued efforts of Dr. William A.
Carter. The loss of Dr. Carter's services could have a material adverse effect
on our operations. While we have an employment agreement with Dr. William A.
Carter, and have secured key man life insurance in the amount of $2 million on
the life of Dr. Carter, the loss of Dr. Carter or other key personnel, such as
Dr. David Strayer or Dr. Carol Smith, or the failure to recruit additional
personnel as needed could have a materially adverse effect on our ability to
achieve our objectives.
22. Possible impact of potential AMEX delisting on marketability of our
securities.
Our common stock and class A warrants are trading on the American Stock
Exchange. If we were to continue to incur operating losses, we might be unable
to maintain the standards for continued listing and the listed securities could
be subject to delisting from AMEX. If our securities are delisted, trading in
the delisted securities could thereafter be conducted on the NASD Bulletin Board
or in the over-the-counter market in what is commonly referred to as the "pink
sheets." If this were to occur, an investor would find it more difficult to
dispose of our securities or to obtain accurate quotations as to the price of
our securities and it could have an adverse effect on the coverage of news
concerning us and the ability to sell our shares.
23. Uncertainty of Health Care Reimbursement and Potential Legislation.
Our ability to successfully commercialize our products will depend, in
part, on the extent to which reimbursement for the cost of such products and
related treatment will be available from government health administration
authorities, private health coverage insurers and other organizations.
Significant uncertainty exists as to the reimbursement status of newly approved
health care products, and from time to time legislation is proposed, which, if
adopted, could further restrict the prices charged by and/or amounts
reimbursable to manufacturers of
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pharmaceutical products. We cannot predict what, if any, legislation will
ultimately be adopted or the impact of such legislation on us. There can be no
assurance that third party insurance companies will allow us to charge and
receive payments for our products sufficient to realize an appropriate return on
our investment in product development. Our potential products represent a new
mode of therapy and we expect that the costs associated with purchasing and
administering our products will be substantial. There can be no assurance that
our proposed products, if successfully developed, will be considered cost
effective to third-party payors, that reimbursement will be available or, if
available, that the timing and amount of such payors reimbursement will not
adversely affect our ability to sell our products on a profitable basis.
24. Hazardous Materials.
Our business involves the controlled use of hazardous materials,
carcinogenic chemicals and various radioactive compounds. Although we believe
that our safety procedures for handling and disposing of such materials comply
in all material respects with the standards prescribed by applicable
regulations, the risk of accidental contamination or injury from these materials
cannot be completely eliminated. In the event of such an accident or the failure
to comply with applicable regulations, we could be held liable for any damages
that result, and any such liability could be significant. We do not maintain
insurance coverage against such liabilities.
25. Exercise of Class A Redeemable Warrants May Have Dilutive Effect on
Market.
Holders of the Class A redeemable warrants may exercise the Class A
redeemable warrants and purchase the underlying common stock at a time when we
might be able to obtain capital by a new offering of securities on terms more
favorable than that provided by such Class A redeemable warrants, in which event
our ability to obtain additional capital would be affected adversely.
26. Government Regulation.
We are subject to a variety of laws and regulations relating to
occupational health and safety, environmental protection, hazardous substance
control, and waste management and disposal. Pharmaceutical products and their
manufacture are subject to continued review following regulatory approval, and
later discovery of previously unknown problems may result in the imposition of
restrictions on such products or their manufacture, including withdrawal of the
products from the market. Failure to comply with applicable regulatory
requirements could, among other things, result in fines, suspension of
regulatory approvals, operating restrictions and criminal prosecution. We cannot
predict the extent to which current or future government regulations might have
a materially adverse effect on the production, marketing and sale of our
products. Such regulations may delay or prevent clinical trials, regulatory
approval, and the
12
manufacture or marketing of our potential products. In addition, such regulation
may impose costly procedures upon our activities or furnish a competitive
advantage to other companies more experienced in regulatory affairs than us and
may deplete our liquidity and capital resources.
27. Ampligen(R) Safety Profile.
We believe that Ampligen(R) has been generally well tolerated with a low
incidence of clinical toxicity, particularly given the severely debilitating or
life threatening diseases that have been treated. A mild flushing reaction has
been observed in approximately 15 percent of patients treated in our various
studies. This reaction is occasionally accompanied by erythema, tightness of the
chest, tachycardia, anxiety, shortness of breath, subjective reports of "feeling
hot," sweating and nausea. The reaction is usually infusion-rate related and can
generally be controlled by slowing the infusion rate. Other adverse side effects
include liver enzyme level elevations, diarrhea, itching, urticaria (swelling of
the skin), bronchospasm, transithypotension, photophobia, rash, bradycardia,
transient visual disturbances, arrhythmias, decrease visual activity in
platelets and white blood cell counts, anemia, dizziness, confusion, elevation
of kidney function tests, occasional temporary hair loss and various flu-like
symptoms, including fever, chills, fatigue, muscular aches, joint pains,
headaches, nausea and vomiting. These flu-like side effects typically subside
within several months.
28. Litigation in Pennsylvania involving us and Manuel Asensio and Asensio &
Company, Inc.
In September, 1998, we filed a multi-count compliant against Manuel P.
Asensio, Asensio & Company, Inc. and others in the United States District Court
for the Eastern District of Pennsylvania. In October 1998 and August 1999, we
amended the complaint to add additional counts and to add Asensio.com, Inc.
(formerly known as Asensio Holding, Inc.), the holding company of defendant,
Asensio & Company Inc., and to add a conspiracy charge against the remaining
defendants and certain unnamed John Does.
The action presently includes claims of defamation, disparagement, and
tortious interference with existing and prospective business relations and
conspiracy, arising out of the current defendants' false and defamatory
statements. The complaint further alleges that defendants defamed and disparaged
us in furtherance of a manipulative, deceptive and unlawful short-selling scheme
between August, 1998, and the present.
In April 1999, Manuel P. Ansensio, Ansensio & Company, Inc. and others,
filed an answer and counterclaim against us. The counterclaim alleges that we on
or about September, 1998, in response to defendants' strong sell recommendation
and other press releases about Hemispherx and its officers and directors, made
defamatory statements about defendants,
13
including statements that defendants' attacks and manipulative short-selling
scheme may have constituted criminal wrongdoing on the part of defendants. We
denied the material allegations of the counterclaim and are vigorously defending
against the counterclaim. On June 6, 2000, the court granted the defendants'
motion to dismiss for lack of Federal Jurisdiction. On July 31, 2000 we
transferred the action to the Court of Common Pleas of Philadelphia County. In
August, 2000 we filed a notice of appeals from the decision of the United States
District Court dismissing the action for lack of Federal Jurisdiction. The
appeal is presently pending.
29. Litigation in New York involving us and Manuel Asensio, Asensio & Company
Inc., and Asensio.com Inc.
On July 27, 2000, Manual P. Asensio and Asensio & Company, Inc., filed a
complaint in the Supreme Court of the State of New York against us, our Chairman
and Chief Executive Officer William A. Carter and KPMG Peat Marwick in the first
New York action in which they allege that the defendants defamed them in oral
and written communications made in March, 2000. On August 25, 2000, we filed an
Answer, including Affirmative Defenses to these claims. The allegations of
Manual P. Asensio and Asensio & Company, Inc., in the first New York action are
similar in substance to the alleged defamations which are the subject of the
counterclaims filed by them in the action presently on appeal in Federal Court
in Pennsylvania and pending in Pennsylvania state court.
On September 25, 2000, Manual P. Asensio, Asensio & Company, Inc. and
Asensio.com Inc., filed a second action against us and Dr. William Carter, our
Chairman and Chief Executive Officer in the Supreme Court of the State of New
York. The second New York action purports to seek a declaratory judgment that
their statements regarding us constituted protected speech, and that they did
not engage in any actionable interference with our existing or prospective
business relations.
We intend to vigorously defend against the claims asserted in both the
First and Second New York actions.
14
Dividend Policy
We have not paid any cash dividends since our inception and do not
anticipate paying cash dividends in the foreseeable future.
Selling Stockholders
This prospectus relates to the proposed sale by us, agent or agents
designated by us, or certain stockholders of:
o 755,000 warrants owned by the selling stockholders;
o 755,000 shares of common stock underlying the selling stockholders'
warrants; and
o although not set forth in this part of the prospectus, this
prospectus also relates to the registration of the issuance of
500,000 shares of common stock owned by us, and 755,000 shares of
common stock issuable upon the exercise of the warrants, which are
held by the selling stockholders.
The following table sets forth as of September 15, 2000 certain
information with respect to the selling stockholders. The information is based
on information provided by or on behalf of the selling stockholders. The selling
stockholders may offer all, some or none of their shares of our common stock.
We will not receive any of the proceeds from the sale of the warrants or
the resale of the shares of common stock underlying the warrants, which are
included in this registration statement, for which this prospectus forms a part.
We will however receive proceeds from the sale of shares of common stock owned
by us and from the exercise of warrants, which are included in this registration
statement, for which this prospectus forms a part. We believe, based on
information supplied by the selling stockholders, that each of them has sole
voting and investment power with respect to the warrants and shares of common
stock underlying warrants.
The third column below lists, for each selling stockholder, each selling
stockholder's portion, based on its ownership of common stock and common stock
underlying our warrants, which in the aggregate consists of 755,000 shares of
common stock being offered by this prospectus.
For purposes of estimating the number of shares of common stock to be
registered for resale by this prospectus, we included: 755,000 shares,
representing 100% of the shares of common stock issuable upon exercise of the
selling stockholders' warrants, without regard to
15
any limitation on exercise. The fourth and fifth column below assumes the sale
of all of the shares offered by each selling stockholder.
To our knowledge, none of the selling stockholders has had any position
with, held any office of, or had any other material relationship with us.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Percentage calculations are based upon
29,953,198 shares of our common stock outstanding as of September 29, 2000. We
will not receive any of the proceeds from the sale of the warrants or the shares
of common stock underlying warrants. We believe, based on information supplied
by the selling stockholders, that each of them has sole voting and investment
power with respect to the warrants and shares of common stock underlying
warrants.
[Enlarge/Download Table]
Securities Securities
Owned Prior Securities Owned
to Offering(1) Offered After Offering(2)
-------------- ------- -----------------
Common
Stock
Name of Selling Common Underlying Common
Stockholder Stock Warrants Warrants Warrants Stock Warrants %
----------- ----- -------- -------- -------- ----- -------- ---
------------------------------------------------------------------------------------------------------------------------------------
Joseph Giamanco -- 11,000 11,000(3) 11,000 -- -- **
------------------------------------------------------------------------------------------------------------------------------------
Joseph Roselle -- 2,000 2,000(3) 2,000 -- -- **
------------------------------------------------------------------------------------------------------------------------------------
2,500 2,500(3) 2,500
Claire Crough -- 1,000 1,000(4) 1,000 -- -- **
------------------------------------------------------------------------------------------------------------------------------------
Stephen 2,500 2,500(3) 2,500
Eldridge -- 1,000 1,000(4) 1,000 -- -- **
------------------------------------------------------------------------------------------------------------------------------------
Dan Wade -- 1,300 1,300(3) 1,300 -- -- **
------------------------------------------------------------------------------------------------------------------------------------
Allan Maurer -- 700 700(3) 700 -- -- **
------------------------------------------------------------------------------------------------------------------------------------
R.A. Kenney -- 2,000 2,000(3) 2,000 -- -- **
------------------------------------------------------------------------------------------------------------------------------------
BT Alex Brown
FBO W. Bigler -- 1,000 1,000(3) 1,000 -- -- **
------------------------------------------------------------------------------------------------------------------------------------
16
[Enlarge/Download Table]
Securities Securities
Owned Prior Securities Owned
to Offering(1) Offered After Offering(2)
-------------- ------- -----------------
Stock
Name of Selling Common Underlying Common
Stockholder Stock Warrants Warrants Warrants Stock Warrants %
----------- ----- -------- -------- -------- ----- -------- ---
------------------------------------------------------------------------------------------------------------------------------------
Brenda Dettman -- 2,500 2,500(3) 2,500 -- -- **
------------------------------------------------------------------------------------------------------------------------------------
Dale Davis -- 5,000 5,000(3) 5,000 -- -- **
------------------------------------------------------------------------------------------------------------------------------------
Michael Burrows 166,218 100,000 100,000 100,000 166,218 -- **
------------------------------------------------------------------------------------------------------------------------------------
Julian Cohen 50,000 50,000 50,000(4) 50,000 50,000 -- **
------------------------------------------------------------------------------------------------------------------------------------
Sidney Stoneman 1,536 50,000 50,000(4) 50,000 1,536 -- **
------------------------------------------------------------------------------------------------------------------------------------
Frank B. Carr 1,536 50,000 50,000(4) 50,000 1,536 -- **
------------------------------------------------------------------------------------------------------------------------------------
James 2,500 2,500(3) 2,500
Mack -- 5,000 5,000(5) 5,000 -- -- **
------------------------------------------------------------------------------------------------------------------------------------
Fred Dettman, IRA -- 10,000 10,000(5) 10,000 -- -- **
------------------------------------------------------------------------------------------------------------------------------------
Henry George -- 5,000 5,000(5) 5,000 -- -- **
------------------------------------------------------------------------------------------------------------------------------------
Lawrence Zaslow -- 100,000 100,000(6) 100,000 -- -- **
------------------------------------------------------------------------------------------------------------------------------------
Paul Michaels -- 100,000 100,000(6) 100,000 -- -- **
------------------------------------------------------------------------------------------------------------------------------------
Peter Adolph -- 100,000 100,000(6) 100,000 -- -- **
------------------------------------------------------------------------------------------------------------------------------------
Marc Komorsky -- 100,000 100,000(6) 100,000 -- -- **
------------------------------------------------------------------------------------------------------------------------------------
Smythe Meadows -- 25,000 25,000(7) 25,000 -- -- **
------------------------------------------------------------------------------------------------------------------------------------
17
[Enlarge/Download Table]
Securities Securities
Owned Prior Securities Owned
to Offering(1) Offered After Offering(2)
-------------- ------- -----------------
Stock
Name of Selling Common Underlying Common
Stockholder Stock Warrants Warrants Warrants Stock Warrants %
----------- ----- -------- -------- -------- ----- -------- ---
------------------------------------------------------------------------------------------------------------------------------------
Robert &
Patricia Lau -- 21,250 21,250(7) 21,250 -- -- **
------------------------------------------------------------------------------------------------------------------------------------
Brookfield Capital -- 3,750 3,750(7) 3,750 -- -- **
------------------------------------------------------------------------------------------------------------------------------------
----------
** Less than 1%
(1) Does not include Securities held in street name.
(2) Assumes the sale of all Securities offered in the prospectus.
(3) Represent warrants to purchase shares of our common stock at an exercise
price of $1.75 per share.
(4) Represent warrants to purchase shares of our common stock at an exercise
price of $3.50 per share.
(5) Represents warrants to purchase shares of our common stock at an exercise
price of $4.00 per share.
(6) Represents warrants to purchase our common stock as follows: 25,000 at
$6.00 per share, 25,000 at $8.00 per share, 25,000 at $8.00 per share and
25,000 at $12.00 per share.
(7) Represents warrants to purchase shares of our common stock at an exercise
price of $6.00 per share.
The Commission allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the Commission will automatically update and supercede this information. We
incorporate by reference the documents listed below and any future filings made
with the Commission under Sections 13(a), 14, or 15(d) of the Securities
Exchange Act of 1934 until Value Management and Research sells all the shares.
This prospectus is part of a registration statement we filed with the SEC
(Registration No. 333-68541).
(a) annual report on Form 10K/A for our fiscal year ended December 31, 1999
filed March 29, 2000;
18
(b) quarterly report on Form 10-Q for the quarterly period ended March 31,
2000 filed May 5, 2000;
(c) proxy statement on schedule 14A for the 2000 annual meeting filed July 13,
2000;
(d) quarterly report on Form 10-Q for he quarterly period ended June 30, 2000
filed August 14, 2000;
(e) our report on Form 8-K filed with the SEC on May 10, 2000, for the event
of May 3, 2000;
(f) our report on Form 8-K filed with the SEC on May 18, 2000, for the event
of May 3, 2000;
(g) our report on Form 8-K filed with the SEC on June 6, 2000, for the event
of May 5, 2000;
(h) our report on Form 8-K filed with the SEC on July 12, 2000, for the event
of May 3, 2000;
(i) our report on Form 8-K filed with the SEC on July 13, 2000, for the event
of May 3, 2000; and
(j) a description of our common stock contained in our registration statement
on Form S-1, File No. 33-93314, and any amendment or report filed for the
purpose of updating this description filed subsequent to the date of this
prospectus and prior to the termination of this offering.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address: Hemispherx Biopharma, Inc., 1617 JFK
Boulevard, Philadelphia, Pennsylvania 19103, telephone number (215) 988-0080.
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. We and the selling stockholders
will not make offers of these shares in any state where the offer is not
permitted. You should not assume that the information in this prospectus or any
supplement is accurate as of any date other than the date on the front of those
documents.
19
Description of Securities
The following section does not purport to be complete and is qualified in
all respects by reference to the detailed provisions of our certificate of
incorporation and by-laws, as amended, copies of which have been filed with the
Securities and Exchange Commission.
Our authorized capital stock consists of: (i) 50,000,000 shares of common
stock, $.001 par value; and (ii) 5,000,000 shares of preferred stock, .01 par
value. As of September 29, 2000 29,953,198 shares of common stock were issued
and outstanding. As of this date, there were approximately 331 record holders of
our common stock not including holders in street name. We estimate that there
are some 3,300 holders if you include shares held in street name.
Common Stock.
Shares of our common stock are entitled to one vote per share, either in
person or by proxy, on all matters that may be voted upon by the owners of our
shares at meetings of our shareholders. There is no provision for cumulative
voting with respect to the election of directors by the holders of common stock.
Therefore, the holders of more than 50% of our shares of outstanding common
stock can, if they choose to do so, elect all of our directors. In this event,
the holders of the remaining shares of common stock will not be able to elect
any directors.
The holders of common stock:
o have equal rights to dividends from funds legally available therefore,
when and if declared by our board of directors;
o are entitled to share ratably in all of our assets available for
distribution to holders of common stock upon liquidation, dissolution or
winding up of our affairs; and
o do not have preemptive rights, conversion rights, or redemption of sinking
fund provisions.
The outstanding shares of our common stock are duly authorized, validly
issued, fully paid and nonassessable.
20
Preferred Stock.
Under our certificate of incorporation, as amended, our board of directors
is authorized, subject to certain limitations prescribed by law, without further
stockholder approval, from time to time to issue up to an aggregate of 5,000,000
shares of preferred stock. At this time, there are no Preferred shares
outstanding.
Warrants.
We have issued the warrants to the selling stockholder at various times
and over a period of years in private unregistered transactions. The warrants
are similar in form, terms and conditions. Generally, the warrants materially
differ from each other only in the exercise price, duration of the exercise
period, and commencement and expiration dates.
The applicable prospectus supplement will describe, where applicable, the
terms of each warrant in respect of which this prospectus is being delivered.
Plan of Distribution
The shares of our common stock offered by this prospectus may be sold from
time to time by the selling stockholders, to purchasers directly by them in one
or more transactions at a fixed price, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices. Such prices will
be determined by the holders of such securities or by agreement between such
holders and underwriters or dealers who may receive fees or commissions in
connection with such sales.
Each of the selling stockholders, may from time to time offer shares of
our common stock beneficially owned by them through underwriters, dealers or
agents, who may receive compensation in the form of underwriting discounts,
commissions or concessions from the selling stockholder and the purchasers of
the shares for whom they may act as agent. Each of the selling stockholders will
be responsible for payment of commissions, concessions and discounts of
underwriters, dealers or agents. The aggregate proceeds to the selling
stockholders, from the sale of the shares of our common stock offered by them
will be the purchase price of such shares less discounts and commissions, if
any. Each of the selling stockholders reserves the right to accept and, together
with their agents, from time to time to reject, in whole or in part, any
proposed purchase of shares to be made directly or through agents.
Alternatively, the selling stockholders may sell all or a portion of the shares
of our common stock beneficially owned by them and offered from time to time on
any exchange on which the securities are listed on terms to be determined at the
times of such sales. The selling stockholders may also make private sales
directly or through a broker or brokers.
21
From time to time, the selling stockholders may transfer, pledge, donate
or assign shares of our common stock to lenders or others, and each of such
persons will be deemed to be a "selling stockholder" for purposes of this
prospectus. The number of shares beneficially owned by a selling stockholder who
transfers, pledges, donates or assigns shares of our common stock will decrease
as and when they take such actions. The plan of distribution for shares sold
under this prospectus will otherwise remain unchanged, except that the
transferees, pledgees, donees or other successors will be selling stockholders
under this prospectus and may sell their shares in the same manner as the
selling stockholders.
A selling stockholder may enter into hedging transactions with
broker-dealers, and the broker-dealers may engage in short sales of the shares
of our common stock in the course of hedging the positions they assume with such
selling stockholder, including in connection with distribution of the shares of
our common stock by such broker-dealers. In addition, a selling stockholder may,
from time to time, sell short the shares of our common stock, and in such
instances, this prospectus may be delivered in connection with such short sales
and the shares offered may be used to cover such short sales. The selling
stockholders may also enter into option or other transactions with broker-
dealers that involve the delivery of the shares of our common stock to the
broker-dealers, who may then resell or otherwise transfer such shares. The
selling stockholders may also loan or pledge the shares to a broker-dealer and
the broker-dealer may sell the shares as loaned or upon a default may sell or
otherwise transfer the pledge shares.
The selling stockholders and any underwriters, dealers or agents that
participate in the distribution of the shares of our common stock offered by
this prospectus may be deemed to be underwriters within the meaning of the
Securities Act, and any discounts, commissions or concessions received by them
and any provided pursuant to the sale of shares by them might be deemed to be
underwriting discounts and commissions under the Securities Act.
In addition, any securities covered by this prospectus, which qualify for
sale pursuant to Rule 144 or Rule 144A of the Securities Act, may be sold under
Rule 144 or Rule 144A rather than pursuant to this prospectus. There is no
assurance that any selling stockholder will sell any or all of the shares of our
common stock described in this prospectus, and any selling stockholder may
transfer, devise or gift such securities by other means not described in this
prospectus.
If necessary, the specific shares of our common stock to be sold in this
prospectus, the names of the selling stockholders, the respective purchase
prices and public offering prices, the names of any agent, dealer or
underwriter, and any applicable commissions or discounts with respect to a
particular offer will be set forth in an accompanying prospectus supplement or,
if appropriate, a post-effective amendment to the registration statement of
which this prospectus is a part.
22
We will pay substantially all of the expenses incurred by the selling
stockholders and us incident to the offering and sale of the shares of our
common stock underlying the warrants, excluding any underwriting discounts or
commissions. We will not receive proceeds from the resale of our stockholders
shares underlying our warrants; however, we may receive proceeds from the sale
of our own securities and from the exercise of our warrants.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock and class A warrants
is Continental Stock Transfer and Trust Co., 2 Broadway, New York, New York
10004.
Legal Matters
The legality of the common stock offered in this prospectus has been
passed upon for us by Silverman, Collura & Chernis, P.C., 381 Park Avenue South,
Suite 1601, New York, New York 10016.
Experts
The consolidated financial statements of Hemispherx Biopharma, Inc. as of
December 31, 1999 and 1998, and for each of the years in the three year period
ended December 31, 1999, have been incorporated by reference in this
registration statement in reliance upon the report of KPMG LLP, independent
certified public accountants, also incorporated by reference in this
registration statement, and upon the authority of KPMG LLP as experts in
accounting and auditing.
Disclosure of Commission Position on Indemnification
for Securities Act Liabilities
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers, and controlling persons, we
have been advised that in the opinion of the Commission this indemnification is
against public policy as expressed in the Securities Act and is, therefore
unenforceable. In the event that a claim for indemnification against these
liabilities, other than our payment of expense incurred or paid by one of our
directors, officers, or controlling persons in the successful defense of any
action, suit or proceeding, is asserted by that director, officer or controlling
person in connection with the securities being registered, we will, unless in
the opinion of our counsel the matter has been settled by a controlling
precedent, submit to a court of appropriate jurisdiction the question whether
this indemnification by us is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of these issues.
23
================================================================================
No dealer, salesman or any other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell these securities and it is not a solicitation of an offer to
buy these securities in any state where the offer or sale is not permitted. The
information contained in this Prospectus is current only as of this date
TABLE OF CONTENTS
Page
Where you can find more
information about Hemispherx.................................................v
Summary........................................................................2
Risk Factors...................................................................3
Selling Stockholders..........................................................15
Description of Securities.....................................................20
Plan of Distribution..........................................................21
Transfer Agent................................................................23
Legal Matters.................................................................23
Experts.......................................................................23
Disclosure of the Commissions Position........................................23
----------
================================================================================
================================================================================
500,000 SHARES,
755,000 WARRANTS, AND
755,000 SHARES OF
COMMON STOCK UNDERLYING THE WARRANTS
HEMISPHERX BIOPHARMA, INC.
--------------
PROSPECTUS
--------------
_______, __, 2000
================================================================================
24
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
SEC Registration Fee $ 3,922.64
Printing $ 2,500*
Legal Fees and Expenses $ 20,000*
Accounting Fees and Expenses $ 2,500*
Miscellaneous Expenses (including travel
and promotional expenses) $ 1,000*
TOTAL $29,922.64*
*Estimated
The Selling Stockholders will not pay any portion of the foregoing
expenses of issuance and distribution.
Item 15. Indemnification of Directors and Officers.
The Restated Certificate of Incorporation of the Company provides as
follows:
No person who is or was a director of this Corporation shall be
personally liable to the Corporation or its stockholders for monetary
damages for the breach of any fiduciary duty as a director, unless, and
only to the extent that, such director is liable (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholder, (ii) for
acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law, (iii) under Section 174 of the General
Corporation Law of the State of Delaware, or (iv) for any transaction form
which the director derived an improper personal benefit.
Section 145 of the Delaware General Corporation Law gives Delaware
corporations the power to indemnify each of the Company's present and former
officers and directors under certain circumstances, if such person acted in good
faith and in a manner which he reasonably believed to be in, or not opposed to,
the best interests of the corporation. The Company's Restated Certificate of
Incorporation generally requires the Company to indemnify directors and officers
to the fullest extent permissible under Delaware law.
The Company has entered into indemnification agreements with its current
directors and certain of its executive officers. These agreements have the
practical effect in certain cases of eliminating the ability of stockholders to
collect monetary damages from such individuals.
II-1
Item 16. Exhibits and Financial Statement Schedule
(a) Unless noted otherwise the following exhibits are filed herewith:
Exhibit No. Description
----------- -----------
3.1* Amended and Restated Certificate of Incorporation of Registrant, as
amended, along with Certificates of Designations, Rights and
Preferences of Series A1, A2, B and C Preferred Stock, as amended
3.2* By-laws of Registrant, as amended
5.1 Opinion of Silverman, Collura & Chernis, P.C. with respect to
legality of the securities of the Registrant being registered
23.1 Consent of Silverman, Collura &Chernis, P.C. (included in Exhibit
5.1)
23.2 Consent of KMPG LLP
* Incorporated by reference from the Company's Registration Statement on
Form S-1 (Registration No. 33-93314) declared effective by the Securities
and Exchange Commission on November 2, 1995.
b. Financial Statement Schedules.
All schedules are omitted from this Registration Statement because they
are not required or the required information is included in the Consolidated
Financial Statement or the Notes thereto.
Item 17. Undertakings.
(a) Rule 415 Offerings.
The undersigned issuer hereby undertakes that it will:
(1) File, during any period in which it offers or sells securities,
a post-effective amendment to this Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the Registration Statement; and
II-2
(iii) Includes any additional or changed material information
on the plan of distribution.
provided, however, the paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information required
in a post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
(b) Request for acceleration of effective date.
(1) Insofar as indemnification for liabilities arising under the
Securities Act, may be permitted to directors, officers and controlling persons
of the small business issuer pursuant to the foregoing provisions, or otherwise,
the issuer has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the issuer
of expenses incurred or paid by a director, officer or controlling person of the
issuer in the successful defense of any action, suit or proceedings) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the issuer will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such court.
(2) For determining any liability under the Securities Act, treat
each post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration statement,
and that offering of the securities at that time as the initial bona fide
offering of those securities.
II-3
SIGNATURES
In accordance with the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements of filing this Form S-3 and authorized this registration statement
to be signed on its behalf by the undersigned, in the City of Philadelphia,
State of Pennsylvania, on October 16, 2000.
HEMISPHERX BIOPHARMA, INC.
By: /s/ William A. Carter
-----------------------------------------
William A. Carter, President and CEO
In accordance with the requirements of the Securities Act, this
Registration statement was signed by the following persons in the capacities and
on the dates stated.
[Download Table]
Signature Title Date
--------- ----- ----
Principal Executive Officer
and Chairman of the Board
and as Power of Attorney
/s/ William A. Carter for Members of the Board October 16, 2000
---------------------------
William A. Carter, M.D.
Principal Financial Officer and
/s/ Robert E. Peterson Principal Accounting Officer October 16, 2000
---------------------------
Robert E. Peterson
/s/ Richard C. Piani Director October 16, 2000
----------------------------
Richard C. Piani
/s/ Ransom W. Etheridge Director October 16, 2000
----------------------------
Ransom W. Etheridge
/s/ William Mitchell
----------------------------- Director October 16, 2000
William Mitchell
II-4
Dates Referenced Herein and Documents Incorporated by Reference
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