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11
exemptions under the securities laws or under registration statements may have
on any then prevailing market price. The sale, or availability for sale, of
these securities in the public market subsequent to this prospectus, could
affect the market price of the common stock and could impair our ability to
raise additional capital through the sale of our equity securities or debt
financing.
10. We are dependent on our systems to operate our business, and failure to
adequately address the Year 2000 problem could hurt our profitability.
We are dependent upon computers to operate our business and therefore
are exposed to Year 2000 problems. In the spring of 1998, we initiated a Y2K
compliance program with the following objectives:
(a) updating and/or replacing aging hardware;
(b) establishing a new platform for data bases; and
(c) assuring company-wide Y2K compliance.
With the assistance of outside consultants, we replaced all computers
deemed non-Y2K compliant with computers that are compliant. Also, we replaced
all processing software packages to provide a uniform platform which is
compliant. The research group is in the process of converting their databases to
the new software. One major database used by manufacturing is being custom
written to be Y2K compliant. The first module of the customized software is
being tested. The second module should be completed by the end of September
1999. The cost for this compliance will be between $150,000 and $200,000.
In a worst case scenario, we would experience delays in accessing data
on patients enrolled in clinical trials. These delays could slow down regulatory
compliance and commercial approval of Ampligen by the Food and Drug
Administration. Our management of Ampligen production and inventories would be
slow and time consuming, which could delay shipments of Ampligen for clinical
trials. Our Y2K program is expected to significantly reduce our level of
uncertainty about the Y2K problem and, in particular, about the Y2K compliance
and readiness of our material external agents. We believe that, with the
implementation of new business systems and completion of our Y2K program as
scheduled, the possibility of significant interruptions or normal operations
should be reduced.
12
Where you can find more information about Hemispherx
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference room in Washington, D.C., New York, New York, and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
from our web site hemispherx.com or at the SEC's web site
sec.gov.
The SEC 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 SEC will automatically update and supercede this information. We
incorporate by reference the documents listed below and any future filings made
with the SEC 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 10-K/A for our fiscal year ended December 31,
1998 (File No. 1-13441 and filing date of April 1, 1999);
(b) Quarterly Report on Form 10-Q for the quarterly period ended June 30,
1999 (File No. 1-13441 and filing date of August 13, 1999);
(c) Quarterly Report on Form 10Q for the quarterly period ended March 31,
1999 (File No. 1-13441 and filing date of May 14, 1999);
(d) Proxy Statement on Schedule 14A for the 1999 Annual Meeting (File No.
1-13441 and filing date of May 25, 1999); and
(e) The description of common stock contained in the 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.
13
Description of Securities
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.
Selling Stockholders
This prospectus relates to the proposed sale by us, agent or agents
designated by us, or certain stockholders of:
o 2,125,000 warrants owned by the selling stockholders
o 2,125,000 shares of common stock underlying the selling
stockholders' warrants
o 7,111 share of common stock owned by a selling stockholder
Although not set forth in this part of the prospectus, this prospectus
also relates to the registration of 265,854 shares of common stock in our
treasury and 2,125,000 shares of common stock issuable upon exercise of the
warrants held by selling securityholders.
The following table sets forth as of August 25, 1999 certain
information with respect to the selling stockholders. The selling stockholders
have no material relationship with us and have not held any position or office
with us during the past three years, except where noted. 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.
Securities Securities
Owned Prior Securities Owned
to Offering(1) Offered After Offering(2)
------------------ ---------------- -----------------
Name of Selling Common Common Common
Stockholder Stock Warrants Stock Warrants Stock Warrants %
----------- ----- -------- ----- -------- ----- -------- -
VMW, Inc. 7,111 0 7,111 0 0 0 0
14
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 %
----------- ----- -------- -------- -------- ----- -------- -
Jerome Belson(3) 853,100 691,000 100,000 100,000 853,100 591,000 5.4
Cary Field 0 50,000 50,000 50,000 0 0 0
Sharon Freedman 12,700 50,000 50,000 50,000 12,700 0 **
Mark Palazzo 0 10,000 10,000 10,000 0 0 0
Stanley Zaslow 0 10,000 10,000 10,000 0 0 0
Sage Group 0 390,000 390,000 390,000 0 100,000 **
Olmstead Group 0 240,000 240,000 240,000 0 0 0
Aura (Private), Ltd. 0 540,000 300,000 300,000 0 240,000 **
Paul Michaels 0 50,000 50,000 50,000 0 0 0
Lawrence Zaslow 0 50,000 50,000 50,000 0 0 0
Peter W. Adolph 0 50,000 50,000 50,000 0 0 0
Marc E. Komorsky 0 50,000 50,000 50,000 0 0 0
Herbert Cron 0 30,000 30,000 30,000 0 0 0
Jan McNabb 0 10,000 10,000 10,000 0 0 0
Wellman Consulting 0 12,500 12,500 12,500 0 0 0
Estate of Joseph Niebler 0 15,000 15,000 15,000 0 0 0
Jerry Friedland 0 5,000 5,000 5,000 0 0 0
Gerald Kay 0 525,000 300,000 300,000 0 225,000 **
Michael Freedman 0 25,000 25,000 25,000 0 0 0
Peter W. Rodino III 0 15,000 15,000 15,000 0 0 0
Theresa Bonavita 0 500 500 500 0 0 0
Nick Agriogianis 0 29,850 29,850 29,850 0 0 0
Mark Zaroff 0 29,650 29,650 29,650 0 0 0
Jade Zaroff 0 20,000 20,000 20,000 0 0 0
Mason Zaroff 0 20,000 20,000 20,000 0 0 0
Dakota Management Corp. 0 12,500 12,500 12,500 0 0 0
Mitchell Abrahams 0 20,000 20,000 20,000 0 0 0
David G. Watumull 0 20,000 20,000 20,000 0 0 0
Greg Morrison 0 35,500 35,500 35,500 0 0 0
Donald Hammerle 0 30,000 30,000 30,000 0 0 0
Brent Root 0 500 500 500 0 0 0
R. Robson Trust
James D. Hubbard TTEE 0 4,000 4,000 4,000 0 0 0
National Financial Group 0 20,000 20,000 20,000 0 0 0
Francis Bodkin 0 120,000 120,000 120,000 0 0 0
----------------
** Less than 1%
(1) Does not include securities held in street name.
(2) Assumes the sale of all the securities offered in this prospectus.
(3) Includes 561,000 Class A Warrants, of which (i) 25,000 are owned of record
by Maxine Belson, Mr. Belson's wife; and (ii) 21,000 are owned of record by
Matthew Belson, Mr. Belson's son. Also includes (i) 100,000 warrants to
purchase Common Stock at $3.50 per share; (ii) 30,000 warrants to purchase
Common Stock at $1.75 per share; (iii) 20,000 shares of Common Stock owned
of record by The Jerome Belson Foundation, of which Mr. Belson is a
trustee; (iv) 15,000 shares of Common Stock held by Maxine Belson; and (v)
25,500 shares of Common Stock held by Matthew Belson.
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