-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HYhfPHNPPCxtPw3l9hzYBQvEC4c88TGsydzo8x52X8BDei/zZbRg8V+r23hZskpC jZpWB1fP2Jb91NaGewJs3A== 0000946644-04-000005.txt : 20040326 0000946644-04-000005.hdr.sgml : 20040326 20040326150949 ACCESSION NUMBER: 0000946644-04-000005 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20040326 ITEM INFORMATION: Acquisition or disposition of assets FILED AS OF DATE: 20040326 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEMISPHERX BIOPHARMA INC CENTRAL INDEX KEY: 0000946644 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 520845822 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-13441 FILM NUMBER: 04692728 BUSINESS ADDRESS: STREET 1: 1617 JFK BLVD #660 STREET 2: ONE PENN CENTER CITY: PHILADELPHIA STATE: PA ZIP: 19104 BUSINESS PHONE: 2159880080 MAIL ADDRESS: STREET 1: 1617 JFK BLVD STREET 2: ONE PENN CENTER CITY: PHILADELPHIA STATE: PA ZIP: 19103 8-K/A 1 r8ka2.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------------------------- FORM 8-K/A Amendment No. 2 CURRENT REPORT Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 Date of Report - March 12, 2003 (March 11, 2003) (Date of earliest event reported) Hemispherx Biopharma, Inc. (Exact name of registrant as specified in its charter) Delaware 0-27072 52-0845822 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification Number) 1617 JFK Boulevard 19103 (Address of principal executive offices) (Zip Code) Area Code (215) 988-0080 (Registrant's telephone number) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. As noted in the previous Current Report on Form 8-K filed On March 13, 2003, Hemispherx Biopharma, Inc. (the "Company") executed two agreements with Interferon Sciences, Inc. ("ISI") to purchase certain assets of ISI (the two asset purchase transactions are hereinafter referred to as the "First Asset Purchase" and the "Second Asset Purchase") and consummated the First Asset Purchase. In the second agreement with ISI (the "Second Asset Purchase Agreement"), ISI agreed to sell to the Company all of its rights to ALFERON N Injection(R), a pharmaceutical product used for the treatment of certain types of genital warts in adults (the "Product") and other assets related to the Product including, but not limited to, real estate and machinery. For these assets, the Company agreed to: (i) issue 424,528 shares of its Common Stock which has a Market Value (as defined in the Second Asset Purchase Agreement) of $675,000 and a guaranteed value of $675,000; (ii) issue an additional 62,500 shares of Common Stock without a guaranteed value; (iii) continue to pay ISI 6 % of the net sales of the Product; and (iv) satisfy certain obligations of ISI. On March 17, 2004, the Company consummated the Second Asset Purchase. Item 7. Financial Statements and Exhibits. (a) Financial Statements. None. (b) Unaudited Pro forma Financial Information. The required Pro Forma Financial Information related to the Registrant's acquisition of certain assets of Interferon Sciences, Inc. on March 17, 2004 are attached hereto as Exhibit 99.1. (c) Exhibits. None. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Hemispherx Biopharma, Inc. By: /s/ William A. Carter ------------------------ March 26, 2004 William A. Carter, M.D., President Exhibit 99.1 Unaudited Pro Forma Consolidated Financial Statements On March 11, 2003 the Company executed two agreements with Interferon Sciences, Inc. ("ISI") to purchase certain of its assets. In the first agreement with ISI, the Company effectively acquired the operations of ISI including its inventory of Alferon N Injection(R), and a limited license for the production, manufacture use, marketing and sale of this product. This transaction was completed on March 11, 2003. For these assets, the Company: i) Issued 487,028 shares of its common stock, and ii) Agreed to pay ISI 6% of the net sales of the Product The Company also is required to pay ISI a service fee and pay certain of ISI's obligation related to the product. In the second agreement with ISI, effectively an asset acquisition, ISI agreed to sell to the Company all of ISI's rights to the product and other assets related to the product including, but not limited to, real estate and machinery. This transaction was completed on March 17, 2004. For these assets, the Company: i) Issued on March 17, 2004 an additional 487,028 shares of its common stock; and will ii) Continue to pay ISI 6% of the net sales of the product Pro Forma Condensed Consolidated Statement of Operations (Unaudited) of the Company The following unaudited pro forma consolidated statement of operations of the Company for the year ended December 31, 2003 presents the results of the Company assuming the above-mentioned two agreements between the Company and ISI had occurred on January 1, 2003. The unaudited pro forma consolidated statement of operations should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2003, including the notes thereto, included in the Company's Annual Report on Form 10-K/A. The pro forma data is for informational purposes only and may not necessarily reflect the Company's results of operations for the year ended December 31, 2003 had the Company consummated the two agreements on January 1, 2003.
Hemispherx Biopharma, Inc. and Subsidiaries Unaudited Pro Forma Consolidated Statement of Operations Year Ended December 31, 2003 (in thousands, except per share data) (4) Pro Forma (3) Pro Forma As Further Pro Forma Pro Forma Further Adjusted (1) (2) Adjustments as Adjusted Adjustment For Hemispherx Interferon For First For First For Second Second Biopharma, Inc. Sciences, Inc. Asset Asset Asset And Asset Subsidiaries And Subsidiary Acquisition Acquisition Acquisition Acquisition ------------ -------------- ----------- ----------- ----------- ------------ 2003 2003 ------ ------ Revenues: Sales of product $509 $ 242 $ $ 751 $ $ 751 Clinical treatment programs 148 - - 148 - 148 -------------- --------------- --------------- ----------- ------- --------------- Total Revenues 657 242 899 899 -------------- --------------- --------------- ----------- ------- --------------- Costs and expenses: Production costs/Cost of Goods Sold 502 267 47 (a) 816 60 (d) 876 Research and development 3,150 176 (7) (a) 3,319 8 (d) 3,327 General and administrative 4,257 963 (675) (a) 4,545 8 (d) 4,553 Royalty Expense 45 (b) 45 45 -------------- --------------- --------------- ----------- ------- --------------- Total cost and expenses 7,909 1,406 (590) 8,725 76 8,801 -------------- --------------- --------------- ----------- ------- --------------- Interest and other income 80 13 (13) (a) 80 80 Interest Expense and Financing Costs (68) (c) (7,598) (274) 274 (a) (7,666) (7,666) Metacine Settlement 1,550 (1,550) (a) Service fee income 451 (451) (a) Other income 14 (14) (a) Bulk sale of Alferon inventory 1,149 (1,149) (a) -------------- --------------- --------------- ----------- ------- --------------- Net loss $ (14,770) $ 1,739 $ (2,381) $ (15,412) $ (76) $ (15,488) -------------- --------------- --------------- ----------- ------- --------------- Basic and diluted loss per share $ (.42) $ (.43) $ (.43) -------------- ----------- --------------- Basic and diluted weighted Average common shares outstanding 35,235 35,327 36,056 -------------- ----------- ------- ---------------
See accompanying notes to consolidated statement of operations. NOTES TO UNAUDITED PROFORMA CONSOLIDATED STATEMENT OF OPERATIONS The following notes describe the column headings in the unaudited pro forma consolidated statement of operations and the pro forma adjustments that have been made to this statement: (1) Reflects the unaudited consolidated historical statement of operations of Hemispherx Biopharma, Inc. and subsidiaries for the year ended December 31, 2003. (2) Reflects the unaudited consolidated historical statement of operations for ISI for the period ended September 30, 2003, which date represents its most recent available financial statements. (3) Reflects pro forma adjustments relating to the first acquisition on March 11, 2003 of certain assets of ISI and the related funding as follows: (a) Adjustments to reflect the following: Production cost related to sales of product by ISI are based on the Company's cost of inventory purchased from ISI in the First Asset Acquisition. A portion of the Company's total cost of the net assets was allocated to inventory in accordance with FASB 141. ISI debt was not assumed by the Company, interest on the debt has been eliminated. The ISI building was acquired in the Second Asset Acquisition. Depreciation expense related to the building has been included for the First Asset Acquisition adjustments. The depreciation of the building, based on the cost of the Second Asset Acquisition, is recorded in entry 4(e) below. Service fee income paid to ISI by the Company, the gain on the bulk sale of the Alferon inventory to the Company and the Metacine settlement have been eliminated. General and administrative expenses beyond March 11, 2003 have been eliminated because ISI's general and administrative expenses subsequent to that date are not related to the Alferon business. All expenses related to the Alferon business subsequent to March 11, 2003 have been included in the Company's historical results for the period from March 11, 2003 through December 31, 2003.
Production Cost / Cost of Sold Goods R&D G&A Other Total ---------------------------- ------------------- ------- --------- ------------ -------------- Inventory $(109) $(109) ---------------------------- ------------------- ------- --------- ------------ -------------- ---------------------------- ------------------- ------- --------- ------------ -------------- Interest expense $274 274 ---------------------------- ------------------- ------- --------- ------------ -------------- ---------------------------- ------------------- ------- --------- ------------ -------------- Interest income (13) (13) ---------------------------- ------------------- ------- --------- ------------ -------------- ---------------------------- ------------------- ------- --------- ------------ -------------- Depreciation 62 $7 $7 76 ---------------------------- ------------------- ------- --------- ------------ -------------- ---------------------------- ------------------- ------- --------- ------------ -------------- Service fee income (451) (451) ---------------------------- ------------------- ------- --------- ------------ -------------- ---------------------------- ------------------- ------- --------- ------------ -------------- Other income (14) (14) ---------------------------- ------------------- ------- --------- ------------ -------------- ---------------------------- ------------------- ------- --------- ------------ -------------- Bulk sale of Alferon inventory (1,149) (1,149) ---------------------------- ------------------- ------- --------- ------------ -------------- ---------------------------- ------------------- ------- --------- ------------ -------------- G&A after March 11, 2003 668 668 ---------------------------- ------------------- ------- --------- ------------ -------------- ---------------------------- ------------------- ------- --------- ------------ -------------- Metacine Settlement - - - (1,550) (1,550) ---------------------------- ------------------- ------- --------- ------------ -------------- ---------------------------- ------------------- ------- --------- ------------ -------------- Totals $(47) $7 $675 $(2,903) $(2,268) ---------------------------- ------------------- ------- --------- ------------ --------------
(b) Increase in general and administrative costs resulting from the recognition of 6% royalty charges on the net sales of the acquired ALFERON N injection product. (c) Increase in interest for period from January 1, 2003 through March 11, 2003 for issuance of 6% Senior Convertible Debentures on March 12, 2003. (4) Reflects pro forma adjustments relating to the second acquisition of certain assets of ISI as follows: (d) Adjustments reflect depreciation expense relating to the acquired building as result of the second acquisition of certain assets of ISI. Pro Forma Condensed Consolidated Balance Sheet (Unaudited) of the Company The following unaudited pro forma condensed consolidated balance sheet of the Company as of December 31, 2003 presents the financial position of the Company assuming the asset sale had occurred on December 31, 2003. The unaudited pro forma condensed consolidated balance sheet should be read in conjunction with the consolidated financial statements of the Company, including the notes thereto for the year ended December 31, 2003, included in the Company's Annual Report on Form 10-K/A. The pro forma data is for informational purposes only and may not necessarily reflect the Company's financial position or what the Company's financial position would have been had the Company consummated the asset sale on December 31, 2003.
Hemispherx Biopharma, Inc. and Subsidiaries Unaudited Pro Forma Consolidated Balance Sheet December 31, 2003 (in thousands) PRO FORMA (2) AS (1) PRO FORMA ADJUSTED HEMISPHERX ADJUSTMENTS FOR BIOPHARMA, FOR SECOND SECOND INC. AND ASSET ASSET SUBSIDIARIES ACQUISITION ACQUISITION ------------ ----------- ----------- ASSETS Current Assets: Cash and cash equivalents $ 3,764 $ $3,764 - Short term investments 1,495 - 1,495 Inventory 2,896 - 2,896 Accounts and other receivables 282 - 282 Prepaid and other current assets 170 - 170 -------------- --------------------- --------------------- Total current assets 8,607 8,607 -------------- --------------------- --------------------- Property, plant and equipment, 94 3,212(2) 3,306 net Patent and trademark rights, net 1,027 1,027 Investments in unconsolidated affiliates 408 408 Deferred financing costs 393 393 Deferred acquisition costs 1,546 (1,546)(2) Advance receivable 1,300 1,300 Other assets 29 29 -------------- --------------------- --------------------- Total assets $13,404 $1,666 $15,070 ============== ===================== ===================== LIABILITIES Current liabilities: Accounts payable $488 $ - $488 Accrued expenses 1,119 - 1,119 -------------- --------------------- --------------------- Total current liabilities 1,607 - 1,607 -------------- --------------------- --------------------- Long term debt-net of current portion 2,058 2,058 Redeemable common stock 491 1,452 (2) 1,943 Stockholders' equity : Common stock 39 39 214 (2) Additional paid-in capital 123,054 1,769 (3) 125,037 Accumulated deficit (113,843) (1,769)(3) (115,612) Treasury stock (2) (2) -------------- --------------------- --------------------- Total stockholders' equity 9,248 214 9,462 -------------- --------------------- --------------------- Total liabilities and $ 13,404 $ 1,666 $15,070 stockholders' equity ============== ===================== =====================
See accompanying notes to consolidated balance sheet NOTES TO UNAUDITED PROFORMA CONSOLIDATED BALANCE SHEET The following notes describe the column headings in the unaudited pro-forma consolidated balance sheet and the pro forma adjustments that have been made to this balance sheet: (1)Reflects the consolidated balance sheet of Hemispherx Biopharma Inc. and subsidiaries as of December 31, 2003. (2) Reflects pro forma adjustments for the second acquisition of certain assets of ISI totaling $3.1 million and the assumption of certain obligations, including those settled via the issuance of shares of the Company's common stock. The value of the common shares issued to ISI approximated $1.7 million, of which approximately $1.5 million is redeemable and reflected as such. As a result of the acquisition, the following table summarizes the estimated fair values of the property acquired. (AMOUNTS IN THOUSANDS) Second Acquisition Cost of Building and Equipment : Issued 487,028 shares to ISI $1,666 Issued 581,761 shares to ISI Creditors $907 Assumed Liability for Tax Lien 639 1,546 ---- --------- Total Cost of Property Acquired $3,212 ======== The shares issued to ISI were valued at $3.42 per share which was the closing price of the Company's shares on the American Stock Exchange as of March 17, 2004. The shares issued to ISI creditors were values at $1.56 per share which was the closing price of the Company's shares on the American Stock Exchange as of March 12, 2003. (3) Represents the estimated intrinsic value of 1,450,000 stock warrants granted to the Company's Chief Executive Officer during October 2003, that became vested upon the second acquisition of certain assets from ISI. -----END PRIVACY-ENHANCED MESSAGE-----