Hemispherx Biopharma, Inc. (AMEX symbol: HEB) (Price: $7.375) reported 24,692,340 outstanding shares as of September 30, 1998 in its Form 10-Q filed with the United States Securities and Exchange Commission on November 11, 1998. This number is 2,983,589 more than the 21,708,751 outstanding shares reported as of June 30, 1998 in its Form 10-Q filed on August 14, 1998. There were 64 trading days between June 30th and September 30th. This means that Hemispherx increased its outstanding shares by an average of 46,618 shares per trading day during the 1998 third quarter. Hemispherx did not report the number of shares it had outstanding at the time it filed its Form 10-Q. Such disclosure is customary.
Hemispherx’s Form 10-Qs’ filed for the 1998 second and third quarters show a $9,863,725 increase in stockholder’s equity, before loss, deferred compensation and other accumulated comprehensive gain. This means that Hemispherx realized an approximate average price of $3.31 per share for the 2,983,589 shares it sold during the period. Hemispherx’s average daily high and low trade price per share for the third quarter are $8.05 and $7.34, respectively. Assuming that the newly created shares were sold at the average high or low trade prices, Hemispherx’s insiders realized between $14,132,888 and $12,026,311 in profit in the third quarter from Hemispherx’s fraudulent stock promotion.
Hemispherx began its Ampligen-CFS based stock promotion after over 15 years of trials had failed to result in obtaining FDA treatment approval for at least five diseases. We believe that the fact that Ampligen is a 25-year-old, off-patent never approved drug and that CFS is an uncommon, psychosomatic condition, makes Hemispherx’s stock promotion perhaps the most blatant fraud that exists in U.S. securities market today.
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