Delaware
|
52-0845822
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
incorporation
or organization)
|
Identification
No.)
|
December
31,
2007
|
March
31,
2008
|
||||||
(Unaudited)
|
|||||||
ASSETS
|
|||||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
11,471
|
$
|
9,644
|
|||
Short
term investments (Notes 4)
|
3,944
|
2,989
|
|||||
Inventories
|
511
|
783
|
|||||
Accounts
and other receivables
|
77
|
51
|
|||||
Prepaid
expenses and other current assets
|
146
|
174
|
|||||
Assets
held for sale (Note 6)
|
450
|
450
|
|||||
Total
current assets
|
16,599
|
14,091
|
|||||
Property
and equipment, net
|
4,821
|
5,063
|
|||||
Patent
and trademark rights, net
|
958
|
926
|
|||||
Investment
|
35
|
35
|
|||||
Royalty
interest, net
|
243
|
233
|
|||||
Construction
in progress
|
469
|
-
|
|||||
Other
assets
|
17
|
17
|
|||||
Total
assets
|
$
|
23,142
|
$
|
20,365
|
|||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable
|
$
|
1,118
|
$
|
952
|
|||
Accrued
expenses
|
1,069
|
1,253
|
|||||
Total
current liabilities
|
2,187
|
2,205
|
|||||
Commitments
and contingencies
|
|||||||
Stockholders’
equity (Note 5):
|
|||||||
Preferred
stock, par value $0.01 per share, authorized 5,000,000; issued and
outstanding; none
|
-
|
-
|
|||||
Common
stock, par value $0.001 per share, authorized 200,000,000 shares;
issued
and outstanding 73,760,446 and 73,900,945, respectively
|
74
|
74
|
|||||
Additional
paid-in capital
|
206,078
|
206,424
|
|||||
Accumulated
other comprehensive income (loss)
|
(7
|
)
|
17
|
||||
Accumulated
deficit
|
(185,190
|
)
|
(188,355
|
)
|
|||
Total
stockholders’ equity
|
20,955
|
18,160
|
|||||
Total
liabilities and stockholders’ equity
|
$
|
23,142
|
$
|
20,365
|
Three
months ended March 31,
|
|||||||
2007
|
2008
|
||||||
Revenues:
|
|||||||
Sales
of product net
|
$
|
220
|
$
|
173
|
|||
Clinical
treatment programs
|
35
|
35
|
|||||
Total
revenues
|
255
|
208
|
|||||
Costs
and expenses:
|
|||||||
Production/cost
of goods sold
|
236
|
249
|
|||||
Research
and development
|
3,716
|
1,307
|
|||||
General
and administrative
|
1,783
|
1,897
|
|||||
Total
costs and expenses
|
5,195
|
3,453
|
|||||
Operating
loss
|
(4,940
|
)
|
(3,245
|
)
|
|||
Interest
and other income and expense
|
49
|
80
|
|||||
Interest
expense
|
(71
|
)
|
-
|
||||
Financing
costs
|
(138
|
)
|
-
|
||||
Net
loss
|
$
|
(5,100
|
)
|
$
|
(3,165
|
)
|
|
Basic
and diluted loss per share (Note 2)
|
$
|
(.07
|
)
|
$
|
(.04
|
)
|
|
Weighted
average shares outstanding, basic and diluted
|
68,825,344
|
73,865,138
|
Common
stock
shares
|
Common
Stock
$.001
Par
Value
|
Additional
paid-in
capital
|
Accumulated
other
comprehensive
income
|
Accumulated
deficit
|
Total
stockholders’
equity
|
||||||||||||||
Balance
at December 31, 2007
|
73,760,446
|
$
|
74
|
$
|
206,078
|
$
|
(7
|
)
|
$
|
(185,190
|
)
|
$
|
20,955
|
||||||
Stock
issued for settlement of accounts payable
|
140,499
|
-
|
111
|
-
|
-
|
111
|
|||||||||||||
Equity
based compensation
|
-
|
-
|
235
|
-
|
-
|
235
|
|||||||||||||
Net
comprehensive income (loss)
|
-
|
-
|
-
|
24
|
(3,165
|
)
|
(3,141
|
)
|
|||||||||||
Balance
at March 31, 2008
|
73,900,945
|
$
|
74
|
$
|
206,424
|
$
|
17
|
$
|
(188,355
|
)
|
$
|
18,160
|
2007
|
2008
|
||||||
Cash
flows from operating activities:
|
|||||||
Net
loss
|
$
|
(5,100
|
)
|
$
|
(3,165
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|||||||
Depreciation
of property and equipment
|
61
|
84
|
|||||
Amortization
of patent and trademark
rights, and royalty interest
|
44
|
42
|
|||||
Financing
cost related to debt discounts
|
138
|
-
|
|||||
Equity
based compensation
|
145
|
235
|
|||||
Common
stock issued in payment of interest expense
|
73
|
-
|
|||||
Increase
(decrease) in assets and liabilities:
|
|||||||
Inventories
|
114
|
(272
|
)
|
||||
Accounts
and other receivables
|
(466
|
)
|
26
|
||||
Prepaid
expenses and other current assets
|
(27
|
)
|
(28
|
)
|
|||
Accounts
payable
|
109
|
15
|
|||||
Accrued
expenses
|
69
|
257
|
|||||
Net
cash used in operating activities
|
$
|
(4,840
|
)
|
$
|
(2,806
|
)
|
|
Cash
flows from investing activities:
|
|||||||
Purchase
of property plant and equipment
|
$
|
(19
|
)
|
$
|
-
|
||
Additions
to patent and trademark rights
|
(51
|
)
|
-
|
||||
Maturity
of short term investments
|
18,329
|
1,979
|
|||||
Purchase
of short term investments
|
(20,156
|
)
|
(1,000
|
)
|
|||
Net
cash (used in) provided by investing activities
|
$
|
(1,897
|
)
|
$
|
979
|
2007
|
2008
|
||||||
Cash
flows from financing activities:
|
|||||||
Proceeds
from sale of stock, net of issuance costs
|
$
|
7,270
|
$
|
-
|
|||
Net
cash provided by financing activities
|
$
|
7,270
|
$
|
-
|
|||
Net
increase(decrease) in cash and cash equivalents
|
533
|
(1,827
|
)
|
||||
|
|||||||
Cash
and cash equivalents at beginning of period
|
3,646
|
11,471
|
|||||
Cash
and cash equivalents at end of period
|
$
|
4,179
|
$
|
9,644
|
|||
Supplemental
disclosures of non-cash investing and financing cash flow
information:
|
|||||||
Issuance
of common stock for accounts
payable and accrued expenses
|
$
|
63
|
$
|
111
|
|||
Issuance
of common stock for patents and royalty interest
|
$
|
770
|
$
|
-
|
|||
Unrealized
gains on investments
|
$
|
219
|
$
|
17
|
|||
Supplemental
disclosure of cash flow information:
|
|||||||
Cash
paid during the year for interest
|
$
|
-
|
$
|
-
|
Three Months Ended March 31,
|
|||||||
2007
|
2008
|
||||||
Risk-free
interest rate
|
4.46%
- 4.77%
|
|
2.86
- 3.74%
|
|
|||
Expected
dividend yield
|
-
|
-
|
|||||
Expected
lives
|
5
yrs
|
2.5
- 5.0 yrs
|
|||||
Expected
volatility
|
77.06
- 77.57%
|
|
75.69
- 79.18%
|
|
|||
Weighted
average grant date fair value of options and warrants issued
|
$136,000
|
$177,000
|
Number
of
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
||||||||||
Outstanding
December 31, 2006
|
2,001,969
|
$
|
2.51
|
8.01
|
|||||||||
Options
granted
|
2,624,120
|
2.77
|
9.05
|
||||||||||
Options
forfeited
|
-
|
-
|
-
|
-
|
|||||||||
Outstanding
December 31, 2007
|
4,626,089
|
2.66
|
8.25
|
-
|
|||||||||
Options
granted
|
-
|
-
|
-
|
||||||||||
Options
forfeited
|
-
|
-
|
-
|
|
|||||||||
Outstanding
March 31, 2008
|
4,626,089
|
2.66
|
8.00
|
-
|
|||||||||
Exercisable
March 31, 2008
|
4,459,326
|
$
|
2.70
|
8.04
|
-
|
Number
of
Options
|
Weighted
Average
Exercise
Price
|
Average
Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
||||||||||
Outstanding
December 31, 2006
|
113,986
|
$
|
2.26
|
9.05
|
|||||||||
Options
granted
|
130,000
|
1.34
|
10.00
|
||||||||||
Options
vested
|
(77,223
|
)
|
(6.86
|
)
|
8.29
|
-
|
|||||||
Outstanding
December 31, 2007
|
166,763
|
1.59
|
7.18
|
-
|
|||||||||
Options
granted
|
-
|
-
|
-
|
||||||||||
Options
vested
|
-
|
-
|
-
|
-
|
|||||||||
Outstanding
March 31, 2008
|
166,763
|
$
|
1.59
|
6.93
|
-
|
Number of
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
||||||||||
Outstanding
December 31, 2006
|
1,326,732
|
$
|
2.63
|
8.18
|
|||||||||
Options
granted
|
608,750
|
1.99
|
9.94
|
||||||||||
Options
forfeited
|
-
|
-
|
-
|
||||||||||
Outstanding
December 31, 2007
|
1,935,482
|
2.43
|
8.05
|
-
|
|||||||||
Options
granted
|
560,000
|
2.84
|
8.66
|
||||||||||
Options
forfeited
|
-
|
-
|
-
|
-
|
|||||||||
Outstanding
March 31, 2008
|
2,495,482
|
$
|
2.52
|
8.00
|
-
|
||||||||
Exercisable
March 31, 2008
|
2,455,482
|
$
|
2.54
|
8.02
|
-
|
Number of
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
||||||||||
Outstanding
December 31, 2006
|
37,100
|
$
|
2.28
|
9.81
|
|
||||||||
Options
granted
|
25,100
|
1.30
|
10.00
|
|
|||||||||
Options
forfeited
|
(22,100
|
)
|
(2.30
|
)
|
8.23
|
-
|
|||||||
Outstanding
December 31, 2007
|
40,000
|
1.50
|
9.30
|
-
|
|||||||||
Options
granted
|
-
|
-
|
-
|
|
|||||||||
Options
forfeited
|
-
|
-
|
-
|
-
|
|||||||||
Outstanding
March 31, 2008
|
40,000
|
$
|
1.50
|
9.05
|
-
|
December 31, 2007
|
Unrealized
|
Maturity
|
|||||||||||
Name of security
|
Cost
|
Market value
|
loss
|
date
|
|||||||||
Marshall
& Isley
|
$
|
1,979,000
|
$
|
1,976,000
|
$
|
(3,000
|
)
|
March
2008
|
|||||
Intesa
Funding
|
1,972,000
|
1,968,000
|
(4,000
|
)
|
April
2008
|
||||||||
$
|
3,951,000
|
$
|
3,944,000
|
$
|
(7,000
|
)
|
March
31,2008
|
|||||||||||||
Name of Security
|
Cost
|
Market Value
|
Unrealized
Gain (Loss)
|
Maturity Date
|
|||||||||
Bank
of Scotland
|
$
|
1,000,000
|
$
|
999,000
|
$
|
(1,000
|
)
|
April
2008
|
|||||
Intesa
Funding
|
1,972,000
|
1,990,000
|
18,000
|
June
2008
|
|||||||||
$
|
2,972,000
|
$
|
2,989,000
|
$
|
17,000
|
December 31, 2007
|
||||||||||||||||||||||
Less than 12 months
|
12 months or longer
|
Total
|
||||||||||||||||||||
Name of
security
|
Number of
Securities
|
Fair value
|
Unrealized
loss
|
Fair
value
|
Unrealized
loss
|
Fair value
|
Unrealized
loss
|
|||||||||||||||
Marshall
& Isley
|
1
|
$
|
1,976,000
|
$
|
(3,000
|
)
|
$
|
-
|
$
|
-
|
$
|
1,976,000
|
$
|
(3,000
|
)
|
|||||||
Intesa
Funding
|
1
|
1,968,000
|
(4,000
|
)
|
-
|
-
|
1,968,000
|
(4,000
|
)
|
|||||||||||||
Total
temporary impairment securities
|
2
|
$
|
3,944,000
|
$
|
(7,000
|
)
|
$
|
-
|
$
|
-
|
$
|
3,944,000
|
$
|
(7,000
|
)
|
March 31,2008
|
||||||||||||||||||||||
Less than 12 months
|
12 months or longer
|
Total
|
||||||||||||||||||||
Name of
Security
|
Number of
Securities
|
Fair value
|
Unrealized
Loss
|
Fair
value
|
Unrealized
Loss
|
Fair value
|
Unrealized
Loss
|
|||||||||||||||
Bank
of Scotland
|
1
|
$
|
999,000
|
$
|
(1,000
|
)
|
$
|
-
|
$
|
-
|
$
|
999,000
|
$
|
(1,000
|
)
|
|||||||
Intesa
Funding
|
1
|
1,990,000
|
-
|
-
|
-
|
1,990,000
|
-
|
|||||||||||||||
$
|
2,989,000
|
$
|
(1,000
|
)
|
$
|
-
|
$
|
-
|
$
|
2,989,000
|
$
|
(1,000
|
)
|
Three months ended
March 31,
(in thousands)
|
|||||||
2007
|
2008
|
||||||
Unrealized
gains during the period
|
$
|
243
|
$
|
45
|
|||
Realized
gains during the period
|
(24
|
)
|
(21
|
)
|
|||
Other
comprehensive income
|
$
|
219
|
$
|
24
|
1)
|
Research
and Development costs in 2007 include significant expenses related
to the
preparation of the Ampligen NDA as well as expenses related to the
production of Ampligen for use in stability studies. Expenses related
to
the Ampligen NDA work in 2008 were down approximately $430,000 as
compared
to the same period in 2007; Ampligen manufacturing costs were down
approximately $1,380,000 in 2008 as well as there was no Ampligen
production during the current quarter;
and
|
2)
|
In
2007, we had financing costs and interest expense of $138,000 and
$71,000,
respectively, related to our convertible debentures. These convertible
debentures were paid off in June 2007. No financing costs or interest
charges were incurred during the current period related to these
debentures.
|
· |
announcements
of the results of clinical trials by us or our
competitors;
|
· |
adverse
reactions to products;
|
· |
governmental
approvals, delays in expected governmental approvals or withdrawals
of any
prior governmental approvals or public or regulatory agency concerns
regarding the safety or effectiveness of our
products;
|
· |
changes
in U.S. or foreign regulatory policy during the period of product
development;
|
· |
developments
in patent or other proprietary rights, including any third party
challenges of our intellectual property
rights;
|
· |
announcements
of technological innovations by us or our
competitors;
|
· |
announcements
of new products or new contracts by us or our
competitors;
|
· |
actual
or anticipated variations in our operating results due to the level
of
development expenses and other
factors;
|
· |
changes
in financial estimates by securities analysts and whether our earnings
meet or exceed the estimates;
|
· |
conditions
and trends in the pharmaceutical and other
industries;
|
· |
new
accounting standards; and
|
· |
the
occurrence of any of the risks described in these "Risk
Factors."
|
31.1 |
Certification
pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 from the Company's Chief
Executive Officer
|
31.2 |
Certification
pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 from the Company's Chief
Financial Officer
|
32.1 |
Certification
pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 from the Company's Chief
Executive Officer
|
32.2 |
Certification
pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 from the Company's Chief
Financial Officer
|
HEMISPHERx
BIOPHARMA, INC.
|
||
/S/
William A. Carter
|
||
William
A. Carter, M.D.
|
||
Chief
Executive Officer & President
|
||
/S/
Robert E. Peterson
|
||
Robert
E. Peterson
|
||
Chief
Financial Officer
|