[CFS-L] Ampligen Update: An outrageous, shameless act by Hemispherx's board of directors

[Dr. Marc-Alexander Fluks]

Source: The Street
Date: May 1, 2013
Author: Adam Feuerstein
URL: http://www.thestreet.com/story/11910992/1/an-outrageous-shameless-act-by-hemispherxs-board-of-directors.html


An outrageous, shameless act by Hemispherx's board of directors
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PHILADELPHIA (TheStreet) -- Hemispherx Biopharma's(HEB_) board of
directors committed the most egregious act of shareholder fleecing
I've ever come across. My mouth is agape, in bewilderment, as I type
this: Chief executive officer Bill Carter was awarded a five percent
bonus totaling $1.1 million based on the net proceeds resulting from
Hemispherx's sale of 30 million shares of company stock through an
At-The-Market (ATM) financing arrangement last fall.

Hemispherx's board concluded the sale of company stock on the open
market - something publicly traded companies do routinely - actually
represented a sale of 'company assets not in the ordinary course of
its business.' Under this definition, Carter was contractually
eligible to receive five percent of the proceeds. The sale of 30
million shares of Hemispherx stock during the fourth quarter 2012
netted $23 million for the company. Of that, Hemispherx's directors
wrote a check to Carter for $1.1 million. Thomas Equels, Hemispherx's
vice chairman and lawyer, also received the same $1.1 million 'ATM
bonus' under his employment contract. The bonuses and the reasons for
granting them were disclosed in Hemispherx's most recent 10-K filed
with the SEC.

So, 10 percent of the cash raised by Hemispherx late last year didn't
flow into the company's coffers, but ended up instead in the personal
bank accounts of two of its top executives. And this was all legal
because Hemispherx's board of directors voted for it. Hemispherx was
selling those 30 million shares under the subterfuge of its ATM
agreement which allows the company to disclose sales only when it
files quarterly reports to the SEC. And of course, at that same time,
Hemispherx shares were losing 80 percent of their value after the FDA
and an independent advisory panel sharply criticized the company for
the way it conducted clinical trials of the experimental chronic
fatigue syndrome drug Ampligen. The panel voted not to recommend
Ampligen for approval and the FDA rejected the drug - the second time
Hemispherx has been turned away by U.S. regulators. But despite
Ampligen's abject failure and Hemispherx's stock price in the gutter,
the company's sycophantic board deemed Carter and his crony Equels
deserving of $1.1 million bonus checks based on a highly dilutive and
undercover sale of stock.

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