Item 1.01 Entry into a Material Definitive Agreement.
On August 30, 2016, Hemispherx, Biopharma, Inc.
(the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain investors
(the “Investors”) for the sale by the Company of 3,333,334 shares (the “Common Shares”) of the Company’s
common stock, par value $0.001 per share (the “Common Stock”), at a purchase price of $1.50 per share. Concurrently
with the sale of the Common Shares, pursuant to the Purchase Agreement the Company also sold warrants to purchase 2,500,000 shares
of Common Stock (the “Warrants”) for aggregate gross proceeds of $5,000,000. Subject to certain ownership limitations,
the Warrants will be initially exercisable six-month after issuance at an exercise price equal to $2.00 per share of Common Stock,
subject to adjustments as provided under the terms of the Warrants. The Warrants are exercisable for five years from the initial
exercise date. The closing of the sales of these securities under the Purchase Agreement is expected to take place on or about
September 6, 2016, subject to the satisfaction of customary closing conditions.
The Company estimates that the net proceeds
from the transactions will be approximately $4,650,000 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 preparation for
technology transfer opportunities, expenses related to Ampligen® manufacturing, 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 filed
a prospectus supplement with the SEC on September 1, 2016 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.
The representations, warranties and
covenants contained in the Purchase Agreement were made solely for the benefit of the parties to the Purchase Agreement. The
placement agent is a third party beneficiary of the representations and warranties in the Purchase Agreement. In addition,
such representations, warranties and covenants (i) are intended as a way of allocating the risk between the parties to
the Purchase Agreement 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
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 Agreement, 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 Rodman & Renshaw, a unit of H.C. Wainwright & Co., LLC (“Wainwright”),
pursuant to which Wainwright agreed to serve as exclusive placement agent for the issuance and sale of the Common Shares and Warrants.
The Company has agreed to pay Wainwright 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 grant to Wainwright or its
designees warrants to purchase up to 5% of the aggregate number of shares sold in the transactions (the “Wainwright Warrants”).
The Wainwright Warrants have substantially the same terms as the Warrants, except that the Wainwright Warrants will expire on September
1, 2021 and have an exercise price equal to $1.875 per share of Common Stock. The Wainwright Warrants and the shares issuable upon
exercise of the Wainwright Warrants will be issued in reliance on the exemption from registration provided by Section 4(a)(2) of
the Securities Act as transactions not involving a public offering and in reliance on similar exemptions under applicable state
laws. The Company will also pay Wainwright a non-accountable expense allowance of $70,000 plus a management fee equal to 1.0% of
the gross proceeds raised in the Offering.
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.