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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY __, 1999
REGISTRATION NO. 333-72853
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
HOLLIS-EDEN PHARMACEUTICALS, INC.
(Exact name of Registrant as specified in its charter)
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Delaware 13-3697002
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
9333 Genesee Avenue, Suite 110
San Diego, California 92121
(619) 587-9333
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
----------------
Richard B. Hollis
Chairman of the Board and Chief Executive Officer
HOLLIS-EDEN PHARMACEUTICALS, INC.
9333 Genesee Avenue, Suite 110
San Diego, California 92121
(619) 587-9333
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------
Copies to:
Eric J. Loumeau, Esq.
COOLEY GODWARD LLP
4365 Executive Drive, Suite 1100
San Diego, CA 92121
(619) 550-6000
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.
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, other than securities offered in connection with dividend or interest
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 Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement 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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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH 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
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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PROSPECTUS
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THESE SECURITIES MAY NOT BE SOLD TO YOU UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS
NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MAY 12, 1999
1,367,868 SHARES
HOLLIS-EDEN PHARMACEUTICALS, INC.
Common Stock
----------------
Selling stockholders identified in this prospectus are selling 1,367,868 shares
of Hollis-Eden Pharmaceuticals, Inc. common stock. Hollis-Eden will not receive
any of the proceeds from the sale of shares by the selling stockholders.
Hollis-Eden's common stock is listed on the Nasdaq National Market under the
symbol "HEPH." The closing sale price of the common stock, as reported on the
Nasdaq National Market on May 10, 1999, was $12.125 per share.
INVESTING IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS," BEGINNING ON PAGE 4.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is _________________, 1999.
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TABLE OF CONTENTS
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Page
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Hollis-Eden Pharmaceuticals................................ 3
Use of Proceeds............................................ 3
Risk Factors............................................... 3
Where You Can Get More Information......................... 9
Forward-Looking Statements................................. 10
Selling Stockholders....................................... 11
Plan of Distribution....................................... 12
Legal Matters.............................................. 13
Experts.................................................... 13
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HOLLIS-EDEN PHARMACEUTICALS
Hollis-Eden is a pharmaceutical company in the development stage. We intend to
discover, develop and commercialize products for the treatment of a number of
targeted disease states caused by viral, bacterial, parasitic or fungal
infections, including HIV/AIDS, hepatitis B and C, and malaria. We have three
technology platforms, the first based on cellular energy regulation, the second
on a unique immune system modulation technology, and the third on the inhibiting
of protein RNA and DNA synthesis. We believe that certain of our drug
candidates may provide the first long-term treatment of HIV without the
development of viral strain resistance to the drugs' effectiveness, significant
toxicity or severe side effects.
Hollis-Eden's executive offices are located at 9333 Genesee Avenue, Suite 110,
San Diego, California 92121, telephone number (619) 587-9333.
USE OF PROCEEDS
Hollis-Eden will not receive any proceeds from the sale of the shares of
common stock offered by the selling stockholders.
RISK FACTORS
An investment in the shares being offered hereby involves a high degree of risk.
In deciding whether to purchase shares of our common stock, you should carefully
consider the following risk factors, in addition to other information contained
in this prospectus, in our most recent quarterly report on Form 10-Q, in our
most recent annual report on Form 10-K, and in any other documents incorporated
by reference into this prospectus from our other SEC filings. This prospectus
also contains forward-looking statements that involve risks and uncertainties.
IF WE DO NOT OBTAIN FDA APPROVAL FOR OUR PRODUCTS, WE CANNOT SELL OUR PRODUCTS
AND WE WILL NOT GENERATE REVENUES.
Our principle development efforts are currently centered around two drug
candidates licensed to us which we believe show promise for the treatment and
prevention of HIV/AIDS. However, all of our drug candidates will require Food
and Drug Administration, FDA, and foreign government approvals before they can
be commercialized. Neither HE2000 nor any of our other drug candidates have
been approved for commercial sale. We expect to incur significant additional
operating losses over the next several years as we fund development, clinical
testing and other expenses of seeking FDA approval. While limited clinical
trials of HE2000 have to date produced favorable results, significant additional
trials are required, and we may not be able to demonstrate that this drug
candidate is safe or effective. We cannot guarantee that any of our product
candidates will obtain required government approval. If we do not receive FDA
or foreign approvals for our products, we will not be able to sell our products
and will not generate revenues.
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IF THE MANUFACTURERS OF OUR PRODUCTS DO NOT COMPLY WITH FDA REGULATIONS, OR
CANNOT PRODUCE THE AMOUNT OF PRODUCTS WE NEED TO CONTINUE OUR DEVELOPMENT, WE
WILL FALL BEHIND ON OUR BUSINESS OBJECTIVES.
Outside manufacturers currently produce our drug candidates. Manufacturers
producing our products must follow current Good Manufacturing Practices
regulations enforced by the FDA through its facilities inspection program. If a
manufacturer of our products does not conform to the Good Manufacturing
Practices regulations and cannot be brought up to such a standard, we will be
required to find alternative manufacturers that do conform. This may be a long
and difficult process, and may delay our ability to receive FDA approval of our
products.
We also rely on our manufacturers to supply us with a sufficient quantity of our
drug candidates to conduct clinical trials. If we have difficulty in the future
obtaining our required quantity and quality of supply, we could experience
significant delays in our development programs and regulatory process.
IF WE DECIDE TO MANUFACTURE OUR PRODUCTS OURSELVES, WE FACE FURTHER FDA
REGULATION AND WILL REQUIRE ADDITIONAL CAPITAL.
For now, we do not intend to manufacture any pharmaceutical products ourselves.
If we decide to manufacture products ourselves in the future, we would be
subject to the same risks associated with the regulatory requirements described
above. We would also require substantial additional capital. We have no
experience manufacturing pharmaceutical products for commercial purposes, so we
cannot guarantee that we would be able to manufacture any products successfully
or in a cost-effective manner.
IF WE DO NOT SUCCESSFULLY COMMERCIALIZE OUR PRODUCTS, WE MAY NEVER ACHIEVE
PROFITABILITY.
We have experienced significant operating losses to date because of the
substantial expenses we have incurred to acquire and fund development of our
drug candidates. We have never had operating revenues and have never
commercially introduced a product. Our accumulated deficit was $13.3 million
through December 31, 1998. Many of our research and development programs are at
an early stage. Potential drug candidates are subject to inherent risks of
failure. These risks include the possibilities that no drug candidate will be
found safe or effective, meet applicable regulatory standards or receive the
necessary regulatory clearances. Even safe and effective drug candidates may
never be developed into commercially successful drugs. If we are unable to
develop safe, commercially viable drugs, we may never achieve profitability.
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WE WILL NEED TO RAISE ADDITIONAL MONEY BEFORE WE EXPECT TO ACHIEVE
PROFITABILITY; IF WE FAIL TO RAISE ADDITIONAL MONEY, IT WOULD BE DIFFICULT TO
CONTINUE OUR BUSINESS.
Our current cash and cash equivalents are $52 million. We believe these
financial resources will fund our opportunities for the next 24 months. Once
these current financial resources run out, we will require substantial
additional funds in order to finance our drug discovery and development
programs, fund operating expenses, pursue regulatory clearances, develop
manufacturing, marketing and sales capabilities, and prosecute and defend our
intellectual property rights. We intend to seek additional funding through
public or private financing or through collaboration arrangements with
collaborative partners. If we can not raise additional funds when needed, we
may not be able to continue to develop our products, which would prevent us from
generating revenues.
IF WE RAISE ADDITIONAL MONEY BY ISSUING EQUITY SECURITIES, YOUR INVESTMENT WILL
BE DILUTED.
If we raise additional funding by issuing more equity securities, the new shares
will dilute the voting power of your investment on a percentage basis.
AS A RESULT OF OUR INTENSELY COMPETITIVE INDUSTRY, WE MAY NOT GAIN ENOUGH MARKET
SHARE TO BE PROFITABLE.
The biotechnology and pharmaceutical industries are intensely competitive. We
have numerous competitors in the United States and elsewhere. Our competitors
include major, multinational pharmaceutical and chemical companies, specialized
biotechnology firms and universities and other research institutions. Many of
these competitors have greater financial and other resources, larger research
and development staffs and more effective marketing and manufacturing
organizations than we do. In addition, academic and government institutions
have become increasingly aware of the commercial value of their research
findings. These institutions are now more likely to enter into exclusive
licensing agreements with commercial enterprises, including our competitors, to
market commercial products.
Our competitors may succeed in developing or licensing technologies and drugs
that are more effective or less costly than any we are developing. Our
competitors may succeed in obtaining FDA or other regulatory approvals for drug
candidates before we do. We cannot guarantee that our drug candidates, if
approved for sale, will be able to compete successfully with our competitors'
existing products under development. If we are unable to compete successfully,
we may never be able to sell enough products at a sufficient price that would
generate profits.
OUR FAILURE TO PROTECT OUR PROPRIETARY TECHNOLOGY COULD IMPAIR OUR COMPETITIVE
POSITION.
We have 95 issued patents and pending applications in the U.S. and foreign
counterparts. Our success will depend in part on our ability to obtain
additional United States and foreign patent protection for our drug candidates
and processes, preserve our trade secrets and operate without infringing the
proprietary rights of third parties. We place considerable importance on
obtaining patent protection for significant new technologies, products and
processes. Legal standards
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relating to the validity of patents covering pharmaceutical and biotechnological
inventions and the scope of claims made under such patents are still developing.
Our patent position is highly uncertain and involves complex legal and factual
questions. We cannot be certain that the applicant or inventors of subject
matter covered by patent applications or patents owned by or licensed to us were
the first to invent or the first to file patent applications for such
inventions. We cannot guarantee that any patents will issue from any of the
pending or future patent applications we own or have licensed. Existing or
future patents owned by or licensed to us may be challenged, infringed upon,
invalidated, found to be unenforceable or circumvented by others. Further, we
cannot guarantee that any rights we may have under any issued patents will
provide us with sufficient protection against competitive products or otherwise
cover commercially valuable products or processes.
If another party claims the same subject matter or subject matter overlapping
with the subject matter that we have claimed in a United States patent
application or patent, we may decide or be required to participate in
interference proceedings in the United States Patent and Trademark Office in
order to determine the priority of invention. Loss of such an interference
proceeding would deprive us of patent protection sought or previously obtained
and could prevent us from commercializing our products. Participation in such
proceedings could result in substantial costs, whether or not the eventual
outcome is favorable. These additional costs could adversely affect our ability
to achieve profitability.
IF OUR LICENSING AGREEMENTS WERE TERMINATED BECAUSE OF A MATERIAL BREACH ON OUR
PART, OUR OPERATING RESULTS AND FINANCIAL CONDITION WOULD SUFFER.
We license our drug candidates from Patrick T. Prendergast and from Edenland,
Inc. and Colthurst Limited, two organizations Patrick T. Prendergast controls.
Our license agreements can be terminated if we materially breach our obligations
under the agreements. Termination of our license agreements would cause us to
lose our rights to our existing drug candidates. If we lost our licensed rights
to one or more of our drug candidates or if our rights were materially limited,
it would make it difficult to generate significant revenues.
THE TECHNOLOGY IN OUR SECTOR IS DEVELOPING RAPIDLY, AND OUR FUTURE DEPENDS ON
OUR ABILITY TO KEEP ABREAST OF TECHNOLOGICAL CHANGE.
Biotechnology and related pharmaceutical technology have undergone rapid and
significant change. We expect that the technologies associated with
biotechnology research and development will continue to develop rapidly. Our
future will depend in large part on our ability to maintain a competitive
position with respect to these technologies. Any compounds, products or
processes that we develop may become obsolete before we recover any expenses we
have incurred in connection with developing these products. If we fail to
recover our expenses because our products become obsolete, we may not be able to
achieve profitability.
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OUR ABILITY TO ACHIEVE ANY SIGNIFICANT REVENUE WILL DEPEND ON OUR ABILITY TO
ESTABLISH EFFECTIVE SALES AND MARKETING CAPABILITIES.
Our efforts to date have focused on the development and evaluation of our drug
candidates. As we continue clinical studies and prepare for commercialization of
our drug candidates, we need to build a sales and marketing infrastructure. We
have no experience in the sales and marketing of our drug candidates. If we
fail to establish a sufficient marketing and sales force, it will impair our
ability to enter new or existing markets. Our inability to effectively enter
these markets would materially and adversely affect our ability to generate
significant revenues.
IF HOLLIS-EDEN WERE TO LOSE THE SERVICES OF RICHARD B. HOLLIS, OR FAIL TO
ATTRACT QUALIFIED PERSONNEL IN THE FUTURE, OUR BUSINESS OBJECTIVES WOULD BE MORE
DIFFICULT TO IMPLEMENT, ADVERSELY AFFECTING OUR OPERATIONS.
Our ability to successfully implement our business strategy depends highly upon
our Chief Executive Officer, Richard B. Hollis. The loss of Mr. Hollis's
services could impede the achievement of our research and development
objectives. We also highly depend on our ability to hire and retain qualified
scientific and technical personnel. The competition for these employees is
intense. We cannot guarantee that we will continue to be able to hire and
retain the qualified personnel needed for our business. Loss of the services of
or the failure to recruit key scientific and technical personnel could adversely
affect our business, operating results and financial condition.
WE MAY FACE PRODUCT LIABILITY CLAIMS RELATED TO THE USE OR MISUSE OF OUR
PRODUCTS WHICH MAY CAUSE US TO INCUR SIGNIFICANT LOSSES.
We face inherent business risk of product liability claims in the event that the
use or misuse of our products results in personal injury or death. We have not
experienced any such claims to date, but we cannot be certain, in particular
after commercial introduction of our products, that we will not experience
losses due to product liability claims. We currently maintain liability
insurance on a claims-made basis. We cannot be certain that the insurance
policies' coverage limits are adequate. The insurance is expensive, difficult
to obtain and may not be available in the future on acceptable terms, or at all.
Any claims against us, regardless of their merit, could substantially increase
our costs and cause us to incur significant losses.
IF WE FAIL TO ADEQUATELY ADDRESS YEAR 2000 PROBLEMS, OUR BUSINESS AND FINANCIAL
CONDITION COULD EXPERIENCE LOSSES.
Many currently installed computer systems and software products are coded to
accept only two-digit entries in the date code field. Beginning in the year
2000, these date code fields will need to accept four-digit entries to
distinguish the 21st century dates from 20th century dates. As a result, in
less than one year, computer systems and software used by many companies may
need to be upgraded to comply with Year 2000 requirements.
We upgraded our accounting software during 1998 with a version that is Year 2000
compliant.
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In addition, we upgraded all of our computer operating systems. We recently
completed the upgrading of our communications systems and other non-information
technology systems. We believe that our computer systems, applications and
communications systems are Year 2000 compliant.
We do not expect that the costs associated with achieving Year 2000 compliance
will have a material adverse effect on our future results of operations,
liquidity or capital resources. We have spent less than five thousand dollars
in connection with our Year 2000 compliance efforts to date.
We have begun contacting our material suppliers and third party service
providers to identify their Year 2000 problems and provide solutions to prevent
the disruption of our business activities. We expect to complete our review of
these parties' compliance efforts during the second quarter of 1999.
We cannot guarantee that the computer systems and applications of other
companies which we rely upon will be timely converted. Any such failure by
these other companies to become Year 2000 compliant could materially adversely
affect us. Moreover, the following could have a material adverse effect on our
business or financial condition:
. failure of suppliers and third-party service providers' equipment to
operate accurately;
. failure of clinical trial site medical equipment to perform properly;
. failure of necessary materials or supplies to be available to us when
needed; or
. failure of other equipment, software, or systems as a result of 2000
problems.
We intend to assess worst case scenarios and to develop one or more contingency
plans that may be necessary, such as securing alternative vendors, at the
completion of our review of our material suppliers and third-party service
providers.
TRADING IN OUR SHARES COULD BE SUBJECT TO EXTREME PRICE FLUCTUATIONS WHICH COULD
ADVERSELY AFFECT YOUR INVESTMENT.
The market prices for securities of life sciences companies, particularly those
that are not profitable, have been highly volatile, especially recently.
Publicized events and announcements may have a significant impact on the market
price of our common stock. For example, biological or medical discoveries by
competitors, unfavorable results from clinical trials, unfavorable developments
concerning patents or other proprietary rights or unfavorable domestic or
foreign regulatory developments may have the effect of temporarily or
permanently driving down the price of our common stock (example: Hollis-Eden's
stock price has ranged from $7.87 to $25.00 from April 1, 1998, to March 31,
1999.) In addition, the stock market from time to time experiences extreme
price and volume fluctuations which particularly affect the market prices for
emerging and life sciences companies, such as ours, and which are often
unrelated to the
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operating performance of the affected companies. These broad market fluctuations
may adversely affect the ability of a stockholder to dispose of his shares at a
price equal to or above the price at which the shares were purchased.
BECAUSE STOCK OWNERSHIP IS CONCENTRATED, YOU AND OTHER INVESTORS WILL HAVE
MINIMAL INFLUENCE ON STOCKHOLDERS DECISIONS.
Assuming that outstanding warrants and options have not been exercised, Richard
B. Hollis, our Chief Executive Officer, owns approximately 26% of our
outstanding common stock. Assuming the exercise of our outstanding warrants and
options, Mr. Hollis would own approximately 19% of our outstanding common stock.
As a result, Mr. Hollis may be able to significantly influence the management of
Hollis-Eden and all matters requiring stockholder approval, including the
election of directors. Such concentration of ownership may also have the effect
of delaying or preventing a change in control of Hollis-Eden.
WE HAVE IMPLEMENTED ANTI-TAKEOVER PROVISIONS, ANY OF WHICH MAY REDUCE THE MARKET
PRICE OF OUR COMMON STOCK.
Provisions of our certificate of incorporation and bylaws could make it more
difficult for a third party to acquire us, even if the acquisition would be
beneficial to our stockholders.
Our board of directors is authorized, without any further vote by stockholders,
to issue shares of preferred stock. The issuance of preferred stock with
special voting, liquidation and dividend privileges may have the effect of
delaying, deferring or preventing a change in control without any further action
by the stockholders. Any such issuance may materially and adversely affect the
price of the common stock.
Our board of directors is a "classified board," with approximately one-third of
our directors elected each year. Two annual meetings would be necessary to
change a majority of the directors as a result of having a classified board.
The existence of a classified board may, in certain circumstances, deter or
delay mergers, tender offers, other possible takeover attempts or changes in
management of the board of directors which may be favored by some or a majority
of our stockholders.
WHERE YOU CAN GET MORE INFORMATION
We are a reporting company and file annual, quarterly and current reports, proxy
statements and other information with the SEC. You may read and copy these
reports, proxy statements and other information at the SEC's public reference
rooms in Washington, D.C., New York, NY and Chicago, IL. You can request copies
of these documents by writing to the SEC and paying a fee for the copying cost.
Please call the SEC at 1-800-SEC-0330 for more information about the operation
of the public reference rooms. Our SEC filings are also available at the SEC's
Web
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site at "http://www.sec.gov". In addition, you can read and copy our SEC filings
at the office of the National Association of Securities Dealers, Inc., at 1735 K
Street, Washington, D.C. 20006.
The SEC allows us to "incorporate by reference" information that 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 an
important part of this prospectus, and information that we file later with the
SEC will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings we will make with
the SEC under Section 13 (a), 13(c). 14 pr 15 (d) of the Securities Exchange Act
of 1934:
. Annual Report on Form 10-K for the year ended December 31, 1998, No. 000-
24672;
. Proxy Statement for the 1999 Annual Meeting of Stockholders, No. 000-
24672;
. Current Report on Form 8-K filed February 2, 1999, No. 000-24672; and
. Hollis-Eden's registration statement on Form S-4, No. 333-18725, as
amended, which includes a description of Hollis-Eden's common stock.
You may request a copy of these filings at no cost, by writing or telephoning us
at the following address or telephone number:
Hollis-Eden Pharmaceuticals, Inc.
9333 Genesee Avenue, Suite 110
San Diego, CA 92121
Attn: Vice President-Controller
(619) 587-9333
This prospectus is part of a larger registration statement we filed with the
SEC. You should rely on the information incorporated by reference or provided
in this prospectus. We have not authorized anyone else to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front of the document.
FORWARD-LOOKING STATEMENTS
Except for historical information, the information contained in this prospectus
and in our SEC reports are "forward looking" statements about our expected
future business and performance. Our actual operating results and financial
performance may prove to be very different from what we might have predicted as
of the date of this prospectus. The risks described above address some of the
factors that may affect our future operating results and financial performance.
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SELLING STOCKHOLDERS
The following table sets forth the names of the selling stockholders, and the
number of shares of common stock owned beneficially by them as of May 12, 1999
which may be offered under the terms of this prospectus. This information is
based upon information provided by each selling stockholder. Each selling
stockholder is offering all of the shares they beneficially own, and assuming
they sell every share, will not beneficially won any shares of Hollis-Eden. The
term "selling stockholder" includes the stockholders listed below and anyone who
may receive the stock from the selling stockholder though a transfer, pledge,
donation, or other method.
<TABLE>
<CAPTION>
Name Shares Being Offered
<S> <C>
Robert E. Petersen and Margaret M. Petersen, as Trustees
of the R.E.& M. Petersen Living Trust Dated January 17,
1983.......................................................... 648,649
Clipperbay & Co............................................... 555,556
Banca Del Gottardo............................................ 108,108
Armen Partners L.P............................................ 44,444
Garo H. Armen................................................. 11,111
---------
Total............... 1,367,868
=========
</TABLE>
None of the selling stockholders has, or within the past three years has had,
any position, office or other material relationship with Hollis-Eden or any of
its predecessors or affiliates.
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PLAN OF DISTRIBUTION
The shares of common stock may be sold from time to time by the selling
stockholders in one or more transactions at fixed prices, at market prices at
the time of sale, at varying prices determined at the time of sale or at
negotiated prices. The selling stockholders may offer their shares of common
stock in one or more of the following transactions:
- on any national securities exchange or quotation service at which the
common stock may be listed or quoted at the time of sale, including the
Nasdaq National Market.
- in the over-the-counter market,
- in private transactions,
- through options,
- by pledge to secure debts and other obligations, or a combination of any
of the above transactions.
If required, we will distribute a supplement to this prospectus to describe
material changes in the terms of the offering.
The shares of common stock described in this prospectus may be sold from time to
time directly by the selling stockholders. Alternatively, the selling
stockholders may from time to time offer shares of common stock to or through
underwriters, broker/dealers or agents. The selling stockholders and any
underwriters, broker/dealers or agents that participate in the distribution of
the shares of common stock may be deemed to be "underwriters" within the meaning
of the Securities Act of 1933. Any profits on the resale of shares of common
stock and any compensation received by any underwriter, broker/dealer or agent
may be deemed to be underwriting discounts and commissions under the Securities
Act of 1933.
Any shares covered by this prospectus which qualify for sale pursuant to Rule
144 under the Securities Act of 1933 may be sold under rule 144 rather than
under the terms of this prospectus. The selling stockholders may not sell all
of the shares. The selling stockholders may transfer, will or gift such shares
by other means not described in this prospectus.
To comply with the securities laws of certain jurisdictions, the common stock
must be offered or sold only through registered or licensed brokers or dealers.
In addition, in certain jurisdictions, the common stock may not be offered or
sold unless they have been registered or qualified for sale or an exemption is
available and complied with.
Under the Securities Exchange Act of 1934, any person engaged in a distribution
of the common stock may not simultaneously engage in market-making activities
with respect to the common stock for nine business days prior to the start of
the distribution. In addition, each selling stockholder and any other person
participating in a distribution will be subject to the Securities
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Exchange Act of 1934 which may limit the timing of purchases and sales of common
stock by the selling stockholders or any such other person. These factors may
affect the marketability of the common stock and the ability of brokers or
dealers to engage in market-making activities.
All expenses of this registration will be paid by Hollis-Eden. These expenses
include the SEC's filing fees and fees under state securities or "blue sky"
laws. We estimate that our expenses in connection with this offering will be
approximately $14,724. All expenses for the issuance of a supplement to this
prospectus, when requested by selling stockholder(s), will be paid by the
requesting stockholder(s).
LEGAL MATTERS
Cooley Godward LLP will give its opinion that the shares offered in this
prospectus have been validly issued and are fully paid and non-assessable, and
that the shares which will be issued upon the exercise of certain warrants will
be validly issued, fully paid and nonassessable.
EXPERTS
The financial statements of the registrant as of December 31, 1998 and 1997, and
for each of the years ended December 31, 1998, 1997 and 1996, and for the period
August 15, 1994, the day we started doing business, to December 31, 1998, have
been audited by BDO Seidman, LLP, as set forth in its report included in Hollis-
Eden's Annual Report on Form 10-K for the year ended December 31, 1998. We
incorporate these financial statements by reference into this prospectus in
reliance upon such report given upon the authority of BDO Seidman, LLP as
experts in accounting and auditing.
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WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR
ANY PROSPECTUS SUPPLEMENT. YOU MUST NOT RELY ON ANY UNAUTHORIZED INFORMATION.
THIS PROSPECTUS IS NOT AN OFFER OF THESE SECURITIES IN ANY STATE WHERE AN OFFER
IS NOT PERMITTED. THE INFORMATION IN THIS PROSPECTUS IS CURRENT AS OF MAY __,
1999. YOU SHOULD NOT ASSUME THAT THIS PROSPECTUS IS ACCURATE AS OF ANY OTHER
DATE.
1,367,868 SHARES
HOLLIS-EDEN PHARMACEUTICALS, INC.
COMMON STOCK
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the securities
being registered are set forth in the following table (all amounts except the
registration fee and the listing fee are estimated):
SEC Registration Fee............................ $ 7,724
Legal fees and expenses......................... 4,000
Accounting fees and expenses.................... 3,000
-------
Total...................................... $14,724
=======
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Under Section 145 of the Delaware General Corporation Law, the registrant has
broad powers to indemnify its directors and officers against liabilities they
may incur in such capacities, including liabilities under the Securities Act of
1933, as amended (the "Securities Act").
The registrant's bylaws provide that the registrant shall indemnify its
directors and executive officers and may indemnify its other officers, employees
and other agents to the fullest extent permitted by Delaware law. The
registrant is also empowered under its bylaws to enter into indemnification
contracts with its directors and officers and to purchase insurance on behalf of
any person whom it is required or permitted to indemnify. In addition, the
registrant is required, subject to certain exceptions, to advance all expenses
incurred by any director or executive officer in connection with a completed,
pending or threatened action, suit or proceeding upon receipt of an undertaking
by such director or executive officer to repay all amounts advanced by the
registrant on such person's behalf if it is ultimately determined that such
person is not entitled to be indemnified under the bylaws or otherwise.
The registrant's Certificate of Incorporation provides that to the fullest
extent permitted under Delaware law, the registrant's directors will not be
personally liable to the registrant and its stockholders for monetary damages
for any breach of a director's fiduciary duty. The Certificate of Incorporation
does not, however, eliminate the duty of care, and in appropriate circumstances,
equitable remedies such as an injunction or other forms of non-monetary relief
would remain available under Delaware law. Each director is subject to
liability for breach of the director's duty of loyalty to the registrant, for
acts or omissions not in good faith or involving intentional misconduct or
knowing violations of law, for any transaction from which the director derived
an improper personal benefit and for improper distributions to stockholders and
loans to directors and officers. This provision does not affect a director's
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<PAGE>
responsibilities under any other laws, such as the federal securities laws or
state or federal environmental laws.
The registrant maintains directors' and officers' liability insurance.
ITEM 16. EXHIBITS.
(a) Exhibits.
Exhibit No. Description
----------- -----------
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of BDO Seidman, LLP.
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit
5.1.
24.1 Power of Attorney. Reference is made to page II-4.
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers or persons controlling the registrant
pursuant to the provisions described in Item 15, the registrant has been
informed 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 registrant of expenses
incurred or paid by a director, officer, or person controlling the registrant in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or person controlling the registrant in connection with the
securities being registered, the registrant 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 of 1933 and will be
governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made pursuant
to this registration statement, a post-effective amendment to this registration
statement to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
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<PAGE>
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this amendment no. 2 to
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Diego, State of California, on May 12, 1999.
Hollis-Eden Pharmaceuticals, Inc.
By: /s/ Richard B. Hollis
----------------------
Richard B. Hollis
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this amendment no.
2 to registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ------------------------------ ------------------------------- --------------------------
<S> <C> <C>
/s/ Richard B. Hollis* Chairman of the Board, Chief
- --------------------------------- Executive Officer and Director May 12, 1999
Richard B. Hollis (Principal Executive Officer)
/s/ Robert W. Weber Vice President-Controller
- --------------------------------- (Principal Financial and May 12, 1999
Robert W. Weber Accounting Officer)
- --------------------------------- Director May 12, 1999
William H. Tilley
/s/ Thomas Charles Merigan, Jr.* Chairman of the Scientific
- --------------------------------- Advisory Board and Director May 12, 1999
Thomas Charles Merigan, Jr.
/s/ J. Paul Bagley III* Director May 12, 1999
- ---------------------------------
J. Paul Bagley III
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
- ------------------------------ Director May 12, 1999
Salvatore J. Zizza
/s/ Brendan R. McDonnell* Director May 12, 1999
- ------------------------------
Brendan R. McDonnell
/s/ Leonard Makowka* Director May 12, 1999
- ------------------------------
Leonard Makowka
By: /s/ Robert W. Weber Vice President-Controller
--------------------------- (Attorney-in-fact) May 12, 1999
Robert W. Weber
</TABLE>
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<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ---------- -----------
*5.1 Opinion of Cooley Godward LLP.
23.1 Consent of BDO Seidman, LLP.
23.2 Consent of Cooley Godward LLP. Reference is made
to Exhibit 5.1.
*24.1 Power of Attorney. Reference is made to Page II-4.
- ---------------
* previously filed.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Hollis-Eden Pharmaceuticals, Inc.
San Diego, California
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of the Registration Statement on Form S-3 of our report
dated January 26, 1999, relating to the financial statements of Hollis-Eden
Pharmaceuticals, Inc. appearing in the Company's Annual Report on Form 10-K for
the year ended December 31, 1998.
We also consent to the reference to us under the caption "Experts" in the
Prospectus.
BDO Seidman, LLP
New York, New York
May 12, 1999
