Item
1.01 Entry into a Material Definitive Agreement.
On April 20, 2018, Hemispherx,
Biopharma, Inc. (the “Company”) entered into Securities Purchase Agreements (the “Purchase Agreements”)
with certain investors (the “Investors”) for the sale by the Company of an aggregate of 6,600,000 shares (the
“Common Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”),
at a purchase price of $0.39 per share. Concurrently with the sale of the Common Shares, pursuant to the Purchase Agreements
the Company also sold 6,600,000 warrants, 50% of which are Class A Warrants and 50% of which are Class B Warrants (collectively,
the “Warrants”). We will receive gross proceeds from the concurrent private placement transaction solely to the
extent such Warrants are exercised for cash. Both classes of Warrants will not be exercisable until six months after
issuance and will have an exercise price of $0.39 per share, subject to adjustments as provided under the terms of the Warrants.
The Class A Warrants and Class B Warrants will expire, respectively, two and five years after the date on which they are
first exercisable. The closing of the sales of these securities under the Purchase Agreements is expected to take place on or
about April 24, 2018, subject to the satisfaction of customary closing conditions.
The Company estimates that the net
proceeds from the transactions will be approximately $2,393,820 after deducting certain fees due to the placement agent and the
Company’s estimated transaction expenses. The net proceeds received by the Company from the transactions will be used for
the production of Ampligen, to improve operations, and for working capital and general corporate purposes.
The
Common Shares were offered and sold by the Company pursuant to an effective shelf registration statement on Form S-3, which was
initially filed with the Securities and Exchange Commission (the “SEC”) on June 25, 2015 and subsequently declared
effective on August 4, 2015 (File No. 333-205228) (the “Registration Statement”), and the base prospectus dated as
of August 4, 2015 contained therein. The Company will file a prospectus supplement with the SEC on April 20, 2018 in connection
with the sale of the Common Shares.
The
Warrants and the shares issuable upon exercise of the Warrants were sold without registration under the Securities Act of 1933
(the “Securities Act”) in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act as transactions
not involving a public offering and Rule 506 promulgated under the Securities Act as sales to accredited investors, and in reliance
on similar exemptions under applicable state laws.
Pursuant to the Purchase Agreements,
the Company has generally agreed that it will not issue or enter into any agreement to issue shares of Common Stock or Common
Stock Equivalents for a period of 60 days after April 24, 2018. The representations, warranties and covenants contained in
the Purchase Agreements were made solely for the benefit of the parties to the Purchase Agreements. The placement agent is a third
party beneficiary of the representations and warranties in the Purchase Agreements. In addition, such representations, warranties
and covenants (i) are intended as a way of allocating the risk between the parties to the Purchase Agreements and not as
statements of fact, and (ii) may apply standards of materiality in a way that is different from what may be viewed as material
by stockholders of, or other investors in, the Company. Accordingly, the form of Purchase Agreement is included with this filing
only to provide investors with information regarding the terms of transaction, and not to provide investors with any other factual
information regarding the Company. Stockholders should not rely on the representations, warranties and covenants or any descriptions
thereof as characterizations of the actual state of facts or condition of the Company or any of its subsidiaries or affiliates.
Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Purchase
Agreements, which subsequent information may or may not be fully reflected in public disclosures.
The
Company also entered into an engagement letter (the “Engagement Letter”) with Maxim Group LLC (“Maxim”),
pursuant to which Maxim agreed to serve as exclusive placement agent for the issuance and sale of the Common Shares and Warrants.
The Company has agreed to pay Maxim an aggregate fee equal to 7% of the gross proceeds received by the Company from the sale of
the securities in the transactions. Pursuant to the Engagement Letter, the Company also agreed to reimburse Maxim its legal fees
and other expenses in the amount not to exceed $50,000.
The
forms of the Purchase Agreement, the Warrant and the Engagement Letter are filed as Exhibits 10.1, 4.1 and 1.1, respectively,
to this Current Report on Form 8-K. The foregoing summaries of the terms of these documents are subject to, and qualified in their
entirety by, such documents, which are incorporated herein by reference.