PROSPECTUS
HEMISPHERX BIOPHARMA, INC.
1,000,000 shares of common stock
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Value Management and Research may sell up to 1,000,000 shares of
Hemispherx common stock.
Hemispherx will not receive any proceeds from this offering.
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Please see the risk factors beginning on page 7 to read about certain
factors you should consider before buying shares of common stock.
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Hemispherx's common stock and class A warrants are listed on the American
Stock Exchange under the symbols HEB and HEB/WS, respectively. The reported last
sale price on the American Stock Exchange on April 9, 1999 was $5.75 and $2.50,
respectively.
The mailing address of our principal executive offices is 1617 JFK
Boulevard, Philadelphia, Pennsylvania 19103, and the telephone number is (215)
988-0080.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is April 12, 1999
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Hemispherx
Hemispherx is a pharmaceutical company that is using genetic technologies
to develop therapeutic products for the treatment of viral diseases and certain
cancers. Ampligen, our lead compound, is in advanced human clinical development
for various therapeutic indications. We have clinically evaluated Ampligen in
over 350 patients for different therapeutic indications. These clinical studies
show that the drug acts as an antiviral agent against a large number of
different viruses, including myalgic encephalomyelitis, also known as chronic
fatigue syndrome, HIV infection and hepatitis B, as well as a treatment for
certain cancers. Clinical trials conducted in the early 1990's indicate that
Ampligen may have potential in the treatment of metastatic renal cell cancer and
malignant melanoma. Ampligen appears to stimulate the immune system and is
generally well tolerated. We are currently conducting Phase III human clinical
trials for the therapeutic treatment of chronic fatigue syndrome. Phase III
trials are the final drug testing phase for approval by the U.S. Food and Drug
Administration.
We will continue our research and clinical efforts for the next several
years. We expect significant benefits as a result of certain revenues expected
from various cost recovery treatment programs, notably in Canada, Belgium and
the United States. Cost recovery treatment programs allow us to charge patients
for the cost of Ampligen even though the drug has yet to be approved by the Food
and Drug Administration. We are also pursuing similar programs in other
countries, especially within the European Union where our resources have been
substantially increased in order to pursue regulatory approvals. Over the years,
we have secured more than 25 issued U.S. patents and over 300 derivative
international filings. Nine additional U.S. patent filings are pending along
with their international counterparts.
We require substantial resources to conduct the time-consuming research,
preclinical development, and clinical trials necessary to bring pharmaceutical
products to market and establish commercial production and marketing
capabilities. Accordingly, we may need to raise additional funds through
additional equity or debt financing, collaborative arrangements with corporate
partners, off balance sheet financing or from other sources in order to complete
the necessary clinical trials and the regulatory approval processes and begin
commercializing our products.
Manufacturing
In 1994, we entered into an agreement with Bioclones, Ltd., a subsidiary
of South African Breweries, Ltd., to co-develop various genetic drugs, including
Ampligen. The Bioclones agreement provided for the formation of Ribotech, Ltd.
Ribotech was formed in 1994 to produce the raw materials for manufacturing
Ampligen. Hemispherx and Bioclones jointly own Ribotech. Ribotech1 presently has
the capacity to produce the materials required to treat approximately 2,000
patients per year. We are planning to develop a new production plant. This
facility will have the capacity to produce the materials needed to treat up to
50,000 patients.
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In the third quarter of 1998, we informed the Food and Drug Administration
of our intention to switch certain patients from the labor intensive
freeze-dried dosage form of Ampligen to the more convenient ready-to-infuse
liquid formulation for the treatment of patients in clinical trials. We
manufacture the liquid product more efficiently and the process allows greater
production volumes, although we will continue to produce the freeze-dried
product for further clinical development. We have initiated efforts to identify
and locate additional liquid formulation capacity in the U.S. and Europe, since
we anticipate that additional production capacity will be needed in the future.
Product Development
In the second quarter of 1998, we commenced a Phase III clinical study of
Ampligen for the treatment of chronic fatigue syndrome. We plan to enroll up to
230 patients with severely debilitating chronic fatigue syndrome. Chronic
fatigue syndrome patients who are not eligible for the Phase III trial in the
United States may seek treatment under the chronic fatigue syndrome cost
recovery treatment program now authorized by the Food and Drug Administration.
Treatment with cost recovery has been ongoing since mid-1997 under the auspices
of the Food and Drug Administration. Under this protocol, the enrolled patients
pay for the Ampligen administered, which totals about $7,000 for a 24 week
treatment course. Patients are also treated for chronic fatigue syndrome in
Belgium, Austria and Canada under similar chronic fatigue cost recovery
treatment programs.
Distribution/Marketing
In February 1998, we entered into an agreement with Kimberly Home Health
Care, Inc. which operates under the name Olsten Health Services. Olsten Health
Services will serve as a distributor of our products to U.S. patients enrolled
in the chronic fatigue syndrome cost recovery program and will maintain an
Ampligen inventory for use in treating these patients. In addition, Olsten
Health Services will initially provide up to $500,000 of support for other
clinical program efforts including identification of the potential medical and
economic benefits to patients receiving Ampligen. Olsten Health Services is able
to deliver treatment and services to chronic disease patients including infusion
services, home nursing and other medical services through a national network of
more than 500 locations.
We are exploring distribution and marketing relationships for the Western
European market. Arrangements are being discussed with a French multinational
pharmaceutical firm with respect to a distribution and/or marketing
relationship.
We formed a wholly owned subsidiary in Europe, Hemispherx Biopharma Europe
NV/SA. This subsidiary is presently based in Antwerp and is pursuing chronic
fatigue clinical tests, related clinical treatments and new drug marketing
approval in Belgium and other
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European countries. In December 1998, we filed final drug marketing
approval documents for the European Union, consisting of 15 countries, for
Ampligen's use for treatment of patients with chronic fatigue syndrome. In
January 1999, we were notified that the filing was complete and the review
process had started.
Recent Developments
Subsidiary Spin-Off
We are considering distributing to our shareholders at least 80% of the
issued and outstanding shares of common stock of Core Biotech Corp. We would
distribute the Core Biotech shares to each of the holders of our common stock as
of a record date set by us. The timetable for this potential spin-off has not
been determined.
After the proposed spin-off, Core Biotech would use genetic technologies,
including Ampligen and other products, to develop therapeutic products for the
treatment of viral hepatitis diseases. We would license or sublicense to Core
Biotech the technology for the products that will be used by Core Biotech.
In connection with the proposed spin-off, we would enter into several
agreements with Core Biotech, including, but not limited to,
(a) separation and distribution agreement which will separate our
hepatitis technology from us, including some assets and liabilities,
and distribute Core Biotech common stock to our shareholders;
(b) tax allocation agreement allocating tax liabilities that relate to
the planned spin-off and to periods prior to the spin-off date;
(c) services agreement providing for allocation of responsibilities with
respect to various services to be provided by us to Core Biotech;
(d) an employee benefits agreement;
(e) a technology license agreement; and
(f) a research and development agreement.
These agreements are in the early stages of development and no final
determination as to structure has been made. Accordingly, we have not determined
Core Biotech's capitalization, pro forma financial information, management or
inter-company transactions. We believe that, except for the initial
capitalization of Core Biotech, the transfer of any other assets and liabilities
would have no significant affect on our financial position. The initial
capitalization could be up to $5,000,000 and could negatively effect the amount
of cash we have at the time of the spin-off. The results of operations for Core
Biotech were not significant for the year ended December 31, 1998.
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Litigation
On September 14, 1998, VMW, Inc. filed a complaint against us in the
United States District Court, Southern District of New York. The complaint
alleges that we failed to fulfill our financial obligations to VMW, Inc. with
respect to a certain letter agreement pertaining to marketing services rendered.
VMW, Inc. claims damages of less than $100,000. We counterclaimed alleging
breach of contract by VMW and have demanded damages of approximately $25,000.
This case is currently in the discovery phase. We have discussed a potential
settlement of the claim with VMW. The settlement terms are currently being
negotiated. We do not believe that this claim will have a material effect on our
results of operations or our financial position.
Ell and Co., and the Northern Trust Company, as Trustee of the AT&T Master
Pension Trust filed a complaint against us in the Court of Chancery of the State
of Delaware in and for New Castle County on September 23, 1998. This complaint
alleges that we breached our contractual obligations as set forth in our
Certificate of Powers, Designations, Preferences and Rights of the Series E
Convertible Stock. The plaintiff seeks to enforce its rights to convert 1,500
shares of Series E Preferred Stock into 750,000 shares of freely traded common
stock and to recover damages for its inability to convert the preferred stock
when it requested to do so. We do not believe that the complaint will have a
material effect on our results of operations or our financial position.
Although we maintain that the 1,500 shares of Series E Preferred Stock had
been properly redeemed and, therefore, the plaintiff was not contractually able
to effect a proper conversion into common shares, we agreed, in December 1998,
to convert the plaintiff's preferred stock into common stock. Currently, the
claim is still in litigation.
We filed a complaint against Manual P. Asensio, Asensio and Company, Inc.
and others in the United States District Court for the Eastern District of
Pennsylvania on September 30, 1998. We allege the unlawful manipulation and
short selling by defendants of our common stock on the American Stock Exchange
on or about September 15, 1998 through the present. We allege, among other
things, that the defendants distributed materially false information concerning
us to the public, thereby damaging us and our shareholder equity.
Certain of the defendants have entered motions to dismiss all or part of
the case. On March 12, 1999, the Court issued a memorandum decision dismissing
four of the six counts. Currently, the case is in the discovery phase.
Use of Proceeds
We will not receive proceeds from the resale of Value Management and
Research's common stock. We will receive $1,600,000 from the exercise of the
warrants, assuming all of
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the warrants are exercised. We intend to use these proceeds for general
corporate purposes. Pending use of the proceeds, they will be invested in short
term, interest bearing securities or money market funds.
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Risk Factors
You should carefully consider the following factors and other
information in this prospectus before deciding to invest in shares of common
stock. This prospectus contains forward-looking statements which can be
identified by the use of words such as "intend," "anticipate," "believe,"
"estimate," "project," or "expect" or other similar statements. These statements
discuss future expectations, contain projections of results of operations or of
financial condition, or state other "forward-looking" information. When
considering these statements, you should keep in mind the risk factors described
below and other cautionary statements in this prospectus. The risk factors
described below and other factors noted throughout this prospectus, including
certain risks and uncertainties, could cause our actual results to differ
materially from those contained in any forward-looking statement.
1. We may continue to incur substantial losses and our future profitability
is uncertain.
We began operations in 1966 and last reported net profit from 1985 through
1987. Since 1987, we have incurred substantial operating losses and as of
December 31, 1998 our accumulated deficit was approximately $61,716,000. We have
not yet generated significant revenues from our products and may incur
substantial and increased losses in the future. We cannot assure you that we
will ever achieve significant revenues from product sales or become profitable.
We require and will continue to require the commitment of substantial resources
to develop our products. In addition, substantial funding may be required to
spin-off Core Biotech Corp. We cannot assure you that our product development
efforts will be successfully completed or that required regulatory approvals
will be obtained or that any products will be manufactured and marketed
successfully, or profitability.
2. We do not expect to be profitable unless we receive final regulatory
approval for Ampligen and it is successfully commercialized.
Our principal development efforts are currently focused on Ampligen which
has not been approved for commercial use in the U.S. or elsewhere. We do not
expect to be profitable unless we receive final regulatory approval and can
successfully commercialize Ampligen or one of our other products. Our products,
including Ampligen, are subject to extensive regulation by numerous governmental
authorities in the U.S. and other countries, including, but not limited to, the
Food and Drug Administration in the U.S., the Health Protection Branch of
Canada's Department of Health and Welfare, a federal regulatory agency in
Canada, and the European Medical Evaluation Agency in Europe. Obtaining
regulatory approvals is a rigorous and lengthy process and requires the
expenditure of substantial resources. In order to obtain final regulatory
approval of a new drug, we must demonstrate to the satisfaction of the
regulatory agency that the product is safe and effective for its intended uses
and that we are capable of manufacturing the product to the applicable
regulatory standards. We require regulatory approvals in order to market our
products and receive product revenues or royalties. No regulatory agency has
approved the full commercial sale of any of our products. We
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cannot assure you that the drug will ultimately be demonstrated to be safe or
efficacious. In addition, while Ampligen is authorized for use in clinical
trials in the United States and other countries, we cannot assure you that
additional clinical trials approvals will be authorized in the United States or
in other countries, in a timely fashion or at all, or that we will complete
these clinical trials. Further, we cannot assure you that Ampligen will be
commercially successful in any country that may approve its use. If Ampligen or
one of our other products does not receive regulatory approval in the U.S. or
elsewhere, our operations will be significantly affected.
3. We may not be profitable unless we can protect our patents and/or receive
approval for additional pending patents.
We need to acquire enforceable patents covering the use of Ampligen for a
particular disease in order to obtain exclusive rights for the commercial sale
of Ampligen. Our success depends, in large part, on our ability to obtain patent
protection for our products and to obtain and preserve our trade secrets and
knowhow. We have been issued certain patents on the use of Ampligen alone and
Ampligen in combination with certain other drugs for the treatment of HIV. We
have also been issued patents on the use of Ampligen alone and in combination
with certain other drugs for the treatment of chronic hepatitis B virus, chronic
hepatitis C virus, and a patent which affords protection on the use of Ampligen
in patients with chronic fatigue syndrome. To date, we have not been issued any
patents in the U.S. for the use of Ampligen as a sole treatment for any of the
cancers which we have sought to target. Our applications for U.S. patents for
the use of Ampligen in the treatment of renal cell carcinoma and lung cancer are
currently pending. We cannot assure you that any of these applications will be
approved or that our competitors will not seek and obtain patents regarding the
use of Ampligen in combination with various other agents, including AZT, for a
particular target indication prior to us. If we cannot protect our patents
covering the use of Ampligen for a particular disease, or obtain additional
pending patents, we may not be able to successfully market Ampligen.
4. We may not be profitable unless we can produce Ampligen in commercial
quantities at costs acceptable to us.
We have never produced Ampligen or any other products in large commercial
quantities. Ampligen is currently produced only for use in clinical trials. We
must manufacture our products in compliance with regulatory requirements at
commercial quantities and at acceptable costs in order for us to be profitable.
We intend to utilize third-party manufacturers and/or facilities if and when the
need arises or, if we are unable to do so, to build or acquire commercial-scale
manufacturing facilities. We have entered into an agreement with Bioclones,
Ltd., a biopharmaceutical company which is associated with South African
Breweries, Ltd. The Bioclones agreement provides for the construction of a new
commercial manufacturing facility by Ribotech, Ltd., a company of which we own
24.9%. We have not commenced constructing this facility. A pilot facility in
South Africa is being expanded to provide an increased supply of Ampligen raw
material. The construction of the commercial
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facility is dependent upon the regulatory status of Ampligen, or other products
covered by our patents in various global markets, and we cannot give assurances
with respect to when, and if, construction will be initiated or completed. If we
cannot manufacture commercial quantities of Ampligen or enter into third party
agreements for its manufacture at costs acceptable to us, our operations will be
significantly affected.
5. If our distributors do not market our product successfully, we may not
generate significant revenues or become profitable.
We have limited marketing and sales capability. We need to enter into
marketing agreements and third party distribution agreements for our products in
order to generate significant revenues and become profitable. To the extent that
we enter into co-marketing or other licensing arrangements, any revenues
received by us will be dependent on the efforts of third parties, and there is
no assurance that these efforts will be successful. Our agreement with Olsten
Health Services offers the potential to provide significant marketing and
distribution capacity in the United States while Bioclones, Ltd. will be
responsible for fielding an adequate sales force in South America, Africa,
United Kingdom, Australia and New Zealand. Olsten Health Services is able to
deliver treatment and services to chronic disease patients including infusion
services, home nursing and other medical services through a national network of
more than 500 locations. Nevertheless, we cannot assure you that Olsten Health
Services or Bioclones will be able to successfully distribute our products, or
that we will be able to establish future marketing or third party distribution
agreements on terms acceptable to us, or that the cost of establishing these
arrangements will not exceed any product revenues. If we cannot enter into
future marketing and distribution agreements at terms acceptable to us, or if
these distributors cannot effectively market and distribute our products, our
operations will be negatively affected.
6. We may be subject to product liability claims from the use of Ampligen or
other of our products which could negatively affect our future
operations.
We face an inherent business risk of exposure to product liability claims
in the event that the use of Ampligen or other of our products results in
adverse effects. This liability might result from claims made directly by
patients, hospitals, clinics or other consumers, or by pharmaceutical companies
or others manufacturing these products on our behalf. Our future operations may
be negatively effected from the litigation costs, settlement expenses and lost
product sales inherent to these claims. While we will continue to attempt to
take appropriate precautions, we cannot assure you that we will avoid
significant product liability exposure. Although we currently maintain worldwide
product liability insurance coverage in the amount of $1,000,000, there can be
no assurance that this insurance will provide adequate coverage against product
liability claims. While no product liability claims are pending or threatened
against us to date, a successful product liability claim against us in excess of
our insurance coverage could have a negative effect on our business and
financial condition.
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7. Members of our Scientific Advisory Board have conflicting interests and
may disclose data and technical knowhow to our competitors.
All of our Scientific Advisory Board members are employed by other
entities, which may include our competitors. Although we require each of our
Scientific Advisory Board members to sign a non-disclosure and non-competition
agreement with respect to the data and information that he or she receives from
us, we cannot assure you that members will abide by them. If a member were to
reveal this information to outside sources, accidentally or otherwise, our
operations could be negatively effected. Since our business depends in large
part on our ability to keep our knowhow confidential, any revelation of this
information to a competitor or other source could have an adverse effect on our
operations.
8. The loss of Dr. William Carter's services could hurt our chances for
success.
Our success is dependent on the continued efforts of Dr. William A.
Carter. The loss of Dr. Carter's services could have a material adverse effect
on our operations. While we have an employment agreement with Dr. William A.
Carter, and have secured key man life insurance in the amount of $2 million on
the life of Dr. Carter, the loss of Dr. Carter or other key personnel, such as
Dr. David Strayer or Dr. Carol Smith, or the failure to recruit additional
personnel as needed could have a materially adverse effect on our ability to
achieve our objectives.
9. Restricted shares eligible for sale may depress the market price of our
common stock.
A significant number of our outstanding shares of common stock are
"restricted," as that term is defined under Rule 144 of the Securities Act. In
addition, we have issued warrants to purchase 2,080,000 shares of common stock
in reliance upon the provisions of Rule 701 of the Securities Act. All of these
Rule 701 shares are currently eligible for sale, although the holder of
1,400,000 of these rule 701 shares has agreed to not sell any of these shares in
1999. Under Rule 144, in general, a person may sell stock if the stock has been
owned for at least one year. Rule 144 sales must be made under certain
conditions, including, limitations as to the amount of shares that may be sold
in any three-month period. Rule 144 also permits a sale, without any quantity
limitation, by a person who is not an affiliate of the issuer and who has
satisfied a two-year holding period. We cannot predict the effect that sales
made under Rule 144 or Rule 701, sales made in reliance on other 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.
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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 learned that the computer
systems used for clinical and manufacturing purposes are not Y2K compliant. In
order to make these systems compliant, we elected to replace the computer
systems. We expect to have all computers and systems Y2K compliant by May 15,
1999 at a cost estimated between $150,000 and $200,000.
Our contingency plans are not complete at this time. We are confident that
our new computers and software will be online by May 15, 1999. Some thought is
being given to outsourcing the computer tasks as a contingency plan. We are
looking into suppliers that could provide this service. This approach, if
necessary, would be expensive.
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.
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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 http://www.hemispherx.com or at the SEC's web site
http://www.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 for its fiscal year ended December 31, 1998
(File No. 1-13441);
(b) 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. Value Management and Research
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.
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Resales by Selling Securityholders
This prospectus relates to the proposed resale by Value Management and
Research of 1,000,000 shares of common stock. The following table sets forth as
of April 9, 1999 certain information with respect to Value Management and
Research. Value Management and Research has no material relationship with us and
has not held any position or office with us during the past three years. We will
not receive any of the proceeds from the sale of the common stock. We believe,
based on information supplied by Value Management and Research, that Value
Management and Research has sole voting and investment power with respect to the
shares of common stock. Of the 1,000,000 shares of common stock owned by Value
Management and Research, 250,000 represent shares of common stock underlying
warrants. 200,000 of these warrants are exercisable, based on various vesting
criteria, during the five year period commencing April 30, 1998, at exercise
prices ranging from $4.00 to $10.00 per share and 50,000 are exercisable during
the five year period commencing July 10, 1998 at an exercise price of $4.00.
Securities Securities
Owned Prior Securities Owned
to Offering Offered After Offering
----------- ------- --------------
Name of Selling Common
Securityholder Stock Warrants Common Stock Amount %
- -------------- ----- -------- ------------ ------ -
Value Management and 750,000 250,000 1,000,000 0 0
Research AG
Plan of Distribution
Value Management and Research may sell the shares of common stock from
time to time in one or more transactions on the American Stock Exchange, in
special offerings, exchange distributions, secondary distributions, negotiated
transactions, or a combination of these transactions. It may sell at market
prices at the time of sale, at prices related to the market price or at
negotiated prices.
Sales of the common stock may also be made under Rule 144 of the
Securities Act of 1933, where applicable. Value Management and Research's shares
may also be offered in one or more underwritten offerings, on a firm commitment
or best efforts basis. We will not receive proceeds from the sale of Value
Management and Research's common stock
Under applicable rule and regulations under the Exchange Act, any
person engaged in the distribution of the common stock may not bid for or
purchase shares of common stock during a period which commences one business
day, or 5 business days if our public float is less than $25 million or our
average daily trading volume is less than $100,000, prior to the person's
participation in the distribution, subject to exceptions for certain passive
market
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making activities. In addition and without limiting the foregoing, Value
Management and Research will be subject to applicable provisions of the Exchange
Act and the rules and regulations thereunder, including, without limitation,
Regulation M which may limit the timing of purchases and sales of common stock
by Value Management and Research.
We are bearing all costs relating to the registration of the shares of
common stock, other than fees and expenses, if any, of counsel or other advisors
to Value Management and Research. Any commissions, discounts or other fees
payable to broker-dealers in connection with any sale of the shares of common
stock will be borne by Value Management and Research.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock and class A warrants
is Continental Stock Transfer and Trust Co., 2 Broadway, New York, New York
10004.
Legal Matters
The legality of the common stock offered in this prospectus has been
passed upon for us by Silverman, Collura, Chernis & Balzano, P.C., 381 Park
Avenue South, Suite 1601, New York, New York 10016.
Experts
The consolidated financial statements of Hemispherx as December 31, 1998
and 1997, and for each of the years in the three year period ended December 31,
1998, have been incorporated by reference in this prospectus and in the
registration statement in reliance upon the report of KPMG LLP, independent
certified public accountants, and upon the authority of KPMG LLP as experts in
accounting and auditing.
Disclosure of Commission Position on Indemnification
for Securities Act Liabilities
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers, and controlling persons, we
have been advised that in the opinion of the Commission this indemnification is
against public policy as expressed in the Securities Act and is, therefore
unenforceable. In the event that a claim for indemnification against these
liabilities, other than our payment of expense incurred or paid by one of our
directors, officers, or controlling persons in the successful defense of any
action, suit or proceeding, is asserted by that director, officer or controlling
person in connection with the securities being registered, we will, unless in
the opinion of our counsel the matter has been settled by a controlling
precedent, submit to a court of appropriate jurisdiction the question whether
this indemnification by us is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of these issues.
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No dealer, salesman or any other person is authorized to give any
information or to represent anything not contained 1,000,000 SHARES in this
prospectus. You must not rely on any unauthorized OF COMMON STOCK information or
representations. This prospectus is an offer to sell these securities and it is
not a solicitation of an offer to buy these securities in any state where the
offer or sale is not permitted. The information contained in this Prospectus is
current only as of this date
TABLE OF CONTENTS
Page
Hemispherx.....................................................................2
Use of Proceeds................................................................5
Risk Factors...................................................................7
Where you can find more
information about Hemispherx.................................................12
Resales by Selling Securityholders............................................13
Plan of Distribution..........................................................13
Transfer Agent................................................................14
Legal Matters.................................................................14
Experts.......................................................................14
Disclosure of Commission Position.............................................14
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1,000,000 SHARES
OF COMMON STOCK
HEMISPHERX BIOPHARMA, INC.
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PROSPECTUS
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April 12, 1999
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