Hemispherx cited in three criminal indictments.

On June 20, 2000, the U.S. District Attorneys for the Southern and the Eastern Districts of New York jointly announced the indictment of Steven Madden charging him with participating in schemes to manipulate certain initial public offerings (“IPOs”). Mr. Madden was charged with selling approximately 241,700 IPO units issued by Hemispherx Biopharma, Inc. (AMEX Symbol: HEB, $7 1/4 per share) in connection with the manipulation. Mr. Madden allegedly acted as a nominee for both Bryan Herman and Alan Lipsky in connection with several IPOs including Hemispherx. Messrs. Herman and Lipsky were principals of Monroe Parker Securities, Inc. Monroe Parker was an underwriter of Hemispherx’s IPO.

On June 22, 2000, the U.S. District Attorney for the Southern District of New York announced the indictment of Stephen Drescher. Mr. Drescher was the Director of Corporate Finance at Monroe Parker from May 1, 1995 through December 31, 1997. Mr. Drescher also served as a Director of Hemispherx. The indictment disclosed that Hemispherx paid Mr. Drescher, through Mr. Drescher’s consulting company Millennium International Communications Ltd., $65,000 in cash and 20,000 shares of Hemispherx common stock. These payments were made 3 months after Hemispherx’s IPO. According to the indictment, notwithstanding those payments, Millennium never provided any meaningful public relations or consulting services to Hemispherx. Before its IPO, Hemispherx sold Mr. Drescher 50,000 shares of common stock at $0.50 per share in October 1994.

On September 23, 1999, the U.S. District Attorney for the Eastern District of New York announced that Jordan Belfort and Daniel Porush, the former principals of Hemispherx’s lead underwriter, pled guilty to manipulating the prices of a group of public companies that included Hemispherx. According to the indictment, Messrs. Belfort and Porush obtained control of substantial equity positions in the manipulated stocks, which included Hemispherx, by agreeing to finance the companies only if those companies agreed to register large blocks of stock in the names of nominees. Before its IPO, Hemispherx sold the Belfort Family Trust 80,000 shares of common stock at $0.50 per share in October 1994.

Short selling involves a risk not associated with the purchase of stock including, but not only limited to, unlimited loss and stock borrowing risks. Additional information is available upon request.