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Plan of Distribution
We, or an agent of ours, may sell the securities on behalf of the
selling stockholders for a period of one year from the date of this prospectus:
o through underwriters or dealers;
o directly to a limited number of purchasers or to a single
purchaser; or
o through agents
We have entered into an agreement with certain of selling stockholders
to sell, or arrange for the sale, of the securities on their behalf on a "best
efforts" basis for a period of one year from the date of this prospectus. These
selling stockholders have informed us of the price at which they will sell the
warrants owned by them to us or an agent designated by us. We or an agent
designated by us will purchase the warrants, subject to this agreement, exercise
the warrants and sell the common stock underlying the warrants from time to time
in one or more transactions on the American Stock Exchange, in foreign markets,
special offerings, exchange distributions, secondary distributions, negotiated
transactions, or a combination of these transactions. We or an agent designated
by us may sell the securities at market prices at the time of sale, at prices
related to the market price or at negotiated prices. If an agent designated by
us is used in the sale, that agent will receive a commission of 10%, payable by
the applicable selling stockholder. The commission represents 10% of the
purchase price set by that selling stockholder. We will not receive commissions
on sales made by us.
Pursuant to the Agreement, after one year from the date of this
prospectus, the selling stockholders may sell their securities from time to time
directly to purchasers in one or more transactions on the American Stock
Exchange, in foreign markets, special offerings, exchange distributions,
secondary distributions, negotiated transactions, or a combination of these
transactions.
A prospectus supplement with respect to the securities being offered
subject to the above described agreement will set forth the terms of the
offering of the offered securities, including the name or names of any
underwriters or agents, the purchase price of the offered securities, any
underwriting discounts and other items constituting underwriters' compensation,
any initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
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If underwriters are used in the sale, the offered securities subject to
the agreement described above will be acquired by the underwriters for their own
account and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. The offered securities may be
offered to the public either through underwriting syndicates represented by one
or more managing underwriters or directly by one or more underwriters. The
underwriter or underwriters with respect to a particular underwritten offering
of securities, or, if an underwriting syndicate is used, the managing
underwriter or underwriters, will be set forth on the cover of the applicable
prospectus supplement. Unless otherwise set forth in the prospectus supplement
relating thereto, the obligations of the underwriters to purchase the offered
securities will be subject to conditions precedent and the underwriters will be
obligated to purchase all of the offered securities if any are purchased.
If dealers are utilized in the sale of the offered securities subject
to the agreement described above in respect of which this prospectus is
delivered, and if so specified in the applicable prospectus supplement, we will
sell such offered securities to the dealers as principals. The dealers may then
resell the offered securities to the public at varying prices to be determined
by such dealers at the time of resale. The names of the dealers will be set
forth in a prospectus supplement.
The offered securities subject to the agreement described above may be
sold directly by us or through agents designated by us from time to time. Any
agent involved in the offer or sale of the offered securities in respect to
which this prospectus is delivered will be named, and any commissions payable to
the agent, will be set forth in a prospectus supplement.
The common stock held by VMW, Inc., a selling stockholder in the table
above, and warrants held by certain selling stockholders in the table above are
not subject to the terms of the above described agreement. VMW and those certain
warrant holders may sell their common stock, warrants and common stock
underlying their warrants from time to time in one or more transactions on the
American Stock Exchange, in foreign markets, special offering exchange
distributions, secondary distributions, negotiated transactions, or a
combination of these transactions.
The selling stockholders and broker-dealers, if any, acting in
connection with these sales might be deemed to be "underwriters" within the
meaning of section 2(11) of the Securities Act. Any commission they receive and
any profit upon the resale of the securities might be deemed to be underwriting
discounts and commissions under the Securities Act.
Sales of the common stock may also be made under Rule 144 of the
Securities Act of 1933, where applicable. The selling stockholders' shares may
also be offered in one or more underwritten offerings, on a firm commitment or
best efforts basis. We will not receive proceeds from the sale of the selling
stockholders' securities.
From time to time each of the selling stockholders may transfer,
pledge, donate or assign their securities to lenders, family members and others
and each of such persons will be deemed to be selling stockholders for the
purposes of this prospectus. The number of selling stockholders securities
beneficially owned by those selling stockholders who so transfer, pledge, donate
or assign selling stockholder securities will decrease as and when they take
this action. The plan of distribution for the selling stockholders securities
sold hereunder will otherwise remain unchanged, except that the transferees,
pledgees, donees or other successors will be selling stockholders hereunder.
Under applicable rule and regulations under the Exchange Act, any
person engaged in the distribution of the common stock may not bid for or
purchase shares of common stock
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during a period which commences one business day, or 5 business days if our
public float is less than $25 million or our average daily trading volume is
less than $100,000, prior to the person's participation in the distribution,
subject to exceptions for certain passive market making activities. In addition
and without limiting the foregoing, the selling stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including, without limitation, Regulation M which may limit the
timing of purchases and sales of common stock by selling stockholders.
We are bearing all costs relating to the registration of the shares of
common stock, other than fees and expenses, if any, of counsel or other advisors
to the selling stockholders. Any commissions, discounts or other fees payable to
our designated agent in connection with any sale of the securities will be borne
by the selling stockholders.
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 as of December 31,
1998 and 1997, and for each of the years in the three year period ended December
31, 1998, have been incorporated by reference in this prospectus and in the
registration statement in reliance upon the report of KPMG LLP, independent
certified public accountants, also incorporated by reference in this prospectus,
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 |
