<PAGE>
As filed with the Securities and Exchange Commission on December 6, 1999
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
____________
HOLLIS-EDEN PHARMACEUTICALS, INC.
(Exact name of Registrant as specified in its charter)
____________
Delaware 13-3697002
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
9333 Genesee Avenue, Suite 200
San Diego, California 92121
(858) 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 200
San Diego, California 92121
(858) 587-9333
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
__________
Copies to:
Eric J. Loumeau, Esq.
HOLLIS-EDEN PHARMACEUTICALS, INC.
9333 Genesee Avenue, Suite 200
San Diego, California 92121
(858) 587-9333
__________
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. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================================================
Proposed Proposed
Maximum Maximum
Title of Class of Amount to Offering Price Aggregate Amount of
securities to be registered be registered Per Share(1) Offering Price(1) Registration fee
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 590,000 $20.16 $11,892,500 $3,320
===========================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) of the Securities Act of 1933. The
price per share and aggregate offering price are calculated based upon the
weighted average exercise prices ranging from $18.25 to $20.50 per warrant.
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.
<PAGE>
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 December , 1999
590,000 Shares
HOLLIS-EDEN PHARMACEUTICALS, INC.
Common Stock
___________________
Selling stockholders identified in this prospectus are selling 590,000 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 December , 1999, was $ ___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 December__, 1999.
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Table of Contents
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<TABLE>
<CAPTION>
Page
----
<S> <C>
Hollis-Eden Pharmaceuticals............................... 3
Use of Proceeds........................................... 3
Risk Factors.............................................. 3
Where You Can Get More Information........................ 9
Selling Stockholders...................................... 11
Plan of Distribution...................................... 12
Legal Matters............................................. 13
Experts................................................... 13
</TABLE>
This prospectus is part of a Registration Statement we filed with the Securities
and Exchange Commission. You should rely only on the information contained in or
incorporated by reference in this prospectus. 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 considered to be part of this
prospectus, and information that we file later with the SEC will automatically
update and supersede this information.
2
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HOLLIS-EDEN PHARMECEUTICALS
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, and malaria. 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 200,
San Diego, California 92121, telephone number (858) 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 Hollis-Eden shares involves a high degree of risk. You should
consider the following discussion of risks, in addition to other information
contained in this prospectus. This prospectus also contains forward-looking
statements that involve risks and uncertainties.
If we do not obtain FDA regulatory approval for our products, we cannot sell our
products and we will not generate revenues.
Our principle development efforts are currently centered around HE2000, a drug
candidate licensed to us which we believe shows promise for the treatment and
prevention of HIV/AIDS. However, all drug candidates 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 regulatory 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.
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
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operating revenues and have never commercially introduced a product. Our
accumulated deficit was $25.7 million through September 30, 1999. 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.
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 numerous 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 relating to the validity of patents covering
pharmaceutical and biotechnology 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
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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 principal license agreement were terminated because of a material breach
on our part, our operating results and financial condition would suffer.
We licensed HE2000 from Patrick T. Prendergast and Colthurst Limited, an
organization Mr. Prendergast controls. Mr. Prendergast and Colthurst can
terminate our license under the Colthurst Agreement if we materially breach our
obligations under its terms.
On November 8, 1999, we filed a request for arbitration with Mr. Prendergast and
Colthurst in order to clarify our respective roles and responsibilities under
the Colthurst Agreement.
On November 15, 1999, we received from Mr. Prendergast and Colthurst a letter
purporting to be a notice of termination of the Colthurst Agreement, claiming
that we have not complied with certain terms of the Colthurst Agreement. On
November 16, 1999, we amended our prior arbitration demand to add a request for
declaratory relief that the Colthurst Agreement has not been terminated and
remains in full force and effect. Although we strongly deny any grounds for
termination of the Colthurst Agreement, we cannot guarantee that the arbitrator
will rule in our favor.
Termination of the Colthurst Agreement would cause us to lose our rights to
HE2000. If we lost our licensed rights to HE2000 or if our rights were
materially limited, we would not be able to continue our development program for
HE2000 or commercialize HE2000 and it would make it difficult for us to generate
significant revenues in the near future.
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 $49 million. We believe these
financial resources will fund our opportunities at least into 2001. 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
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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.
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.
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.
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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 21/st/ century dates from 20/th/ 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. In addition, we upgraded all of our computer operating systems. We
recently completed the
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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 contacted our material suppliers and third party service providers to
identify their Year 2000 problems and determine solutions to prevent the
disruption of our business activities. We have completed our review of their
compliance efforts.
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 have assessed worst case scenarios and have developed a contingency plan that
may be necessary, such as securing alternative vendors.
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 $8.63 to $25.50 from September 30, 1998 to November
30, 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 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.
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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 21% 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.
We have distributed a dividend of one right for each outstanding share of common
stock pursuant to the terms of our stockholder rights plan. These rights will
cause substantial dilution to the ownership of a person or group that attempts
to acquire us on terms not approved by our board of directors and may have the
effect of deterring hostile takeover attempts.
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.
We incorporate by reference the documents listed below, except as modified by
this registration statement, and any future filings we will make with the SEC
under Section 13 (a), 13(c), 14 or 15 (d) of the Securities Exchange Act of
1934:
. Annual Report on Form 10-K for the year ended December 31, 1998;
. Quarterly Reports on Form 10-Q for the quarter ended March 31, 1999, June 30,
1999 and September 30, 1999;
. Notice of Annual Meeting and Proxy Statement for the 1999 Annual Meeting of
Stockholders:
. Current Reports on form 8-K filed February 2, 1999, November 24, 1999 and
November 30, 1999; 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 200
San Diego, CA 92121
Attn: Vice President-Controller
(858) 587-9333
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 December 6,
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 own 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 (1)
<S> <C>
Jacmar/Viking L.L.C. (2)................................................ 500,000
Gary J. Shemano......................................................... 30,000
Mitchell S. Levine & Kristen M. Levine, TTEE - The Levine
Revocable Trust........................................................ 20,000
William Corbett & Mary Corbett.......................................... 20,000
Ivan Lieberburg Ph.D. & Janice Kirsch................................... 20,000
-------
Total 590,000
=======
</TABLE>
______________________________________________
(1) Issuable upon the exercise of certain warrants with exercise prices
ranging from $18.25 to $20.50 per warrant.
(2) William H. Tilley, a director of Hollis-Eden, has an interest in this
entity.
Except as set forth above, 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 $ 8,320. 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 their 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 December
__, 1999. You should not assume that this prospectus is accurate as of any other
date.
590,000 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...................... $3,320
Legal fees and expenses................... $2,000
Accounting fees and expenses.............. $3,000
------
Total.......................... $8,320
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
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<PAGE>
for improper distributions to stockholders and loans to directors and officers.
This provision does not affect a director's 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;
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<PAGE>
(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
(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 registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Diego, State of California, on December 1, 1999.
Hollis-Eden Pharmaceuticals, Inc.
By /s/ Richard B. Hollis
- -----------------------------
Richard B. Hollis
Chairman of the Board and
Chief Executive Officer
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<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Richard B. Hollis, Daniel D. Burgess and
Robert W. Weber, and each of them, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or any of them, or his substitutes or substitute, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
<TABLE>
<S> <C> <C>
/s/ Richard B. Hollis Chairman of the Board, Chief
- ---------------------
Richard B. Hollis Executive Officer and Director
(Principal Executive Officer) December 1, 1999
/s/ Daniel D. Burgess Chief Operating Officer/
- ---------------------
Daniel D. Burgess Chief Financial Officer
(Principal Financial Officer) December 2, 1999
/s/ Robert W. Weber Vice President-Controller/
- ---------------------
Robert W. Weber Chief Accounting Officer
(Principal Accounting Officer December 1, 1999
Director December __, 1999
_____________________
J. Paul Bagley III
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
/s/ Leonard Makowka Director December 3, 1999
- -------------------
Leonard Makowka
Director December , 1999
- -------------------------
Brendan R. McDonnell
/s/ Thomas Charles Merigan, Jr Chairman of the Scientific
- ------------------------------
Thomas Charles Merigan, Jr. Advisory Board and Director November 30, 1999
/s/ William H. Tilley Director December 1, 1999
- ---------------------
William H. Tilley
/s/ Salvatore J. Zizza Director November 30, 1999
- ----------------------------
Salvatore J. Zizza
</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.
__________________
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF COOLEY GODWARD LLP]
December 6, 1999
Hollis-Eden Pharmaceuticals, Inc.
9333 Genesee Avenue, Suite 110
San Diego, CA 92121
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by Hollis-Eden Pharmaceuticals, Inc. (the "Company") of a Form
S-3 Registration Statement (the "Registration Statement"), including a related
prospectus filed with the Registration Statement (the "Prospectus"), covering
the registration of an aggregate of 590,000 shares of the Company's Common
Stock, $.01 par value, issuable upon exercise of certain warrants held by such
selling stockholders (the "Warrants") that may be sold by certain selling
stockholders (the "Shares").
In connection with this opinion, we have examined the Registration Statement and
related Prospectus, your Certificate of Incorporation and Bylaws, as amended,
and such other documents, records, certificates, memoranda and other instruments
as we deem necessary as a basis for this opinion. We have assumed the
genuineness and authenticity of all documents submitted to us as originals, the
conformity to originals of all documents submitted to us as copies thereof and
the due execution and delivery of all documents where due execution and delivery
are a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares to be sold by the selling stockholders, when issued and paid for
upon exercise of the Warrants, will be validly issued, fully paid and
nonassessable.
We consent to the reference to our firm under the caption "Legal Matters" in the
Prospectus included in the Registration Statement and to the filing of this
opinion as an exhibit to the Registration Statement.
Very truly yours,
Cooley Godward LLP
Thomas A. Coll
<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
December 1, 1999
