JOHNSTON LAW FIRM Jim D. Johnston, Attorney
11808 Northup Way
Suite W-190
Bellevue, WA 98005
May 3, 2005
VIA FACSIMILE AND EMAIL
Christina Chalk
Special Counsel
U.S. Securities and Exchange Commission
Division of Corporate Finance
450 Fifth Street, N.W.
Washington, D.C. 20549-0303
RE: HELIX BIOMEDIX, INC.
SCHEDULE TO-I/A FILED MARCH 30, 2005
SCHEDULE TO-I/A FILED APRIL 28, 2005
SUPPLEMENTAL MATERIALS SENT ON APRIL 26, 2005
SEC FILE NO. 5-80581
Dear Ms. Chalk:
Thank you for your letter dated April 28, 2005 regarding the above referenced
matter. This letter sets forth Helix BioMedix's response to the four points
addressed in your letter.
1. SEC COMMENT:
Note that Rule 14e-1(d) requires that when you extend the offer, you must state
how many securities have been tendered to date. Please do so if you extend the
offer again.
HELIX RESPONSE:
Thank you for pointing out the requirement. Any future extensions will be made
in compliance with this disclosure requirement.
2. SEC COMMENT:
Please advise what exemption Helix BioMedix is relying on to avoid the
application of Rule 13e-3 in connection with this transaction. If you are
seeking to rely on the exemption provided in Rule 13e-3(g)(2), please address in
a supplemental letter how you believe the company can satisfy each element of
the exemption. In particular, we note that the common shares to be issued in
exchange for tendered warrants are not registered, so we would expect you to
address the company's filing status going forward. If the company is eligible to
terminate its reporting obligations as a result of the purchase of all warrants,
this must be fully disclosed in the offering materials.
- - Page 2 May 2, 2005
HELIX RESPONSE:
The company believes that Rule 13e-3 does not apply to the exchange offer
because (i) the requisite effects that trigger the rule are not met, and (ii)
the exemption set forth in Rule 13e-3(g)(2) applies to the exchange offer.
The Requisite Effects.
Rule 13e-3 applies to transactions that have either a reasonable likelihood or a
purpose of producing, either directly or indirectly either of the following
effects(1):
- causing any class of equity securities of the issuer which is subject to
section 12(g) or section 15(d) of the Securities Exchange Act of 1934, as
amended (the "Act") to be held of record by less than 300 persons; or
- causing any class of equity securities of the issuer which is either
listed on a national securities exchange or authorized to be quoted in an
inter-dealer quotation system of a registered national securities association to
be neither listed on any national securities exchange nor authorized to be
quoted on an inter-dealer quotation system of any registered national securities
association.
The company believes that its exchange offer does not have a reasonable
likelihood or a purpose of producing either of those two requisite effects for
the following two reasons.
First, there are presently a total of 271 holders of the company's warrants to
purchase shares of common stock and approximately 2,100 holders of the company's
shares of common stock. Therefore it is not mathematically possible for the
exchange offer to cause there to be less than 300 holders of a class of equity
securities as required under the first prong of the rule.
Second, the company has no securities which are presently listed on a national
securities exchange and its shares of common stock are its only securities which
are presently authorized to be quoted on an inter-dealer quotation system (which
in this case is the Over-the-counter Bulletin Board). The company's
authorization to have its shares of common stock quoted on the Over-the-counter
Bulletin Board will not be changed as a result of the exchange offer. In
addition, the company's warrants to purchase common stock that would be
cancelled in the exchange offer are not listed on a national securities exchange
or authorized to be quoted in an inter-dealer quotation system of any registered
national securities association. Lastly, the company has no intent to impact its
authorization to have its shares of common stock quoted on the Over-the-counter
bulletin board. Thus the company believes that there is neither a reasonable
likelihood nor a purpose of producing, either directly or indirectly the
requisite effects set forth in the second prong of Rule 13e-3(ii).
The 13e-3(g)(2) Exemption.
Notwithstanding the lack of the Requisite Effects discussed immediately above,
the company also believes that its proposed exchange offer is exempt from the
application of Rule 13e-3 by virtue of the exemption set forth in Rule
13e-3(g)(2). That exemption provides that Rule 13e-3 does not apply to a
transaction in which the security holders are offered or receive only an equity
security; provided that:
- such equity security has substantially the same rights as the equity
security which is the subject of the Rule 13e-3 transaction including, but not
limited to, voting, dividends, redemption and liquidation rights except that
this requirement shall be deemed to be satisfied if unaffiliated security
holders are offered common stock;
- such equity security is registered pursuant to section 12 of the Act or
reports are required to be filed by the issuer thereof pursuant to section 15(d)
of the Act; and
- ----------------------------------
(1) Rule 13e-3(a)(3).
- - Page 3 May 2, 2005
- if the security which is the subject of the Rule 13e-3 transaction was
either listed on a national securities exchange or authorized to be quoted in an
inter-dealer quotation system of a registered national securities association,
such equity security is either listed on a national securities exchange or
authorized to be quoted in an inter-dealer quotation system of a registered
national securities association.
In the company's exchange offer, they would be issuing only shares of common
stock in exchange for warrants to purchase shares of the same common stock. The
rights, including voting, dividend, redemption and liquidation, afforded to the
common stock underlying the warrants and the common stock to be issued in the
exchange for the warrants to purchase common stock are identical. In addition,
unaffiliated warrant holders are being offered shares of common stock. Thus the
company believes that first prong of the exemption is met.
Next, the company is required to comply with the periodic reporting rules of
Section 13 of the Act pursuant to Section 15(d) of the Act as a result of a
registration statement filed in July 1988. The company presently has
approximately 2,100 holders of its common stock. The exchange offer will not
impact this reporting requirement because each warrant holder is also a holder
of common stock and, thus the number of holders of common stock will not be
decreased by virtue of the exchange offer and, in any event, will be far greater
than the 300 holders referenced in Section 15(d). Thus the company believes that
second prong of the exemption is met.
Lastly, the company's shares of common stock are presently authorized to be
quoted (and are in fact quoted) on the Over-the-counter Bulletin Board. The
company is not aware of any aspect of the exchange offer that would effect the
quotation of the shares of common stock. Thus the company believes that the
third and final prong of the exemption is met.
3. SEC COMMENT:
Revise your offering circular to address how fractional shares that would be
issued in exchange for tendered warrants will be treated. Your current
disclosure simply states that fractional shares will not be issued, without
telling shareholders what (if anything) they will receive for those fractional
shares.
HELIX RESPONSE:
In the event that the exchange formula for any warrant exchange would result in
a fraction, the company will round all fractions up to the next whole share.
Pages 1 and 17 of the offering circular have been amended accordingly. On page 1
under the section entitled "Terms of the exchange offer" the last sentence now
reads: "No fractional Shares will be issued as we will round all fractions up to
the next whole share". On page 17 under the section entitled "Terms of the
Exchange Offer; Period for Tendering Existing Warrant Shares" the next to last
sentence now reads: "No fractional Shares will be issued in the exchange offer
as we will round all fractions up to the nearest whole share".
4. SEC COMMENT:
We note your response to comment 8 in our March 14, 2005 letter, as
supplemented by numerous telephone conversations with the staff. Please be
advised that we are not taking a position on the availability of the Rule 506
exemption from the registration requirement of the Securities Act of 1933. In
particular we express no view on whether you have satisfied the conditions
entitling you to rely on the Rule 506 exemption.
HELIX RESPONSE:
Helix BioMedix acknowledges that you are not taking a position with respect to
the availability of the Rule 506 exemption.
- - Page 4 May 2, 2005
We trust that the above comments are fully responsive to the questions that you
raised and look forward to discussing this matter with you.
Respectfully Submitted
Jim D. Johnston, Attorney
cc: David Kirske, CFO
HELIX BIOMEDIX, INC.
OFFER TO EXCHANGE
WARRANTS TO PURCHASE SHARES OF COMMON STOCK
ISSUED IN 2001, 2002, 2003 AND 2004
THE EXPIRATION TIME OF THIS EXCHANGE OFFER IS 9:00 A.M., NEW YORK TIME, ON MAY
31, 2005, UNLESS EXTENDED
WE ARE OFFERING TO REDEEM AND CANCEL EXISTING WARRANT SHARES HELD BY WARRANT
HOLDERS AND, IN EXCHANGE, TO ISSUE SHARES OF OUR $0.001 PAR VALUE COMMON STOCK
("SHARES") IN EITHER (I) A NON-CASH TRANSACTION OR (II) A CASH TRANSACTION,
SUMMARIZED AS FOLLOWS:
NON-CASH TRANSACTION:
Existing Warrants To be provided by you To be issued by us
- ----------------- --------------------- ------------------
2001/2002 Warrants 1 Warrant Share 0.82 Share
2002/2003 Warrants 1 Warrant Share 0.84 Share
2003 Warrants 1 Warrant Share 0.37 Share
2004 Warrants 1 Warrant Share 0.60 Share
CASH TRANSACTION:
Existing Warrants To be provided by you To be issued by us
- ------------------ --------------------- ------------------
2001/2002 Warrants 1 Warrant Share & $0.25 1.0 Share
2002/2003 Warrants 1 Warrant Share & $0.25 1.0 Share
2003 Warrants 1 Warrant Share & $0.56 1.0 Share
2004 Warrants 1 Warrant Share & $0.50 1.0 Share
YOU MAY TENDER ALL, SOME OR NONE OF YOUR EXISTING WARRANT SHARES.
SEE "RISK FACTORS" BEGINNING ON PAGE 9 TO READ ABOUT FACTORS YOU SHOULD CONSIDER
BEFORE TENDERING YOUR EXISTING WARRANT SHARES FOR EXCHANGE. NONE OF THE MEMBERS
OF OUR BOARD OF DIRECTORS, OUR OFFICERS, OUR FINANCIAL ADVISOR, THE EXCHANGE
AGENT, THE INFORMATION AGENT OR ANY OTHER PERSON IS MAKING ANY RECOMMENDATION AS
TO WHETHER YOU SHOULD CHOOSE TO EXCHANGE YOUR EXISTING WARRANT SHARES FOR
SHARES. THIS OFFERING CIRCULAR IS BEING USED IN CONNECTION WITH THE PRIVATE
PLACEMENT OF SECURITIES OF HELIX BIOMEDIX, INC. PURSUANT TO AN EXEMPTION FROM
REGISTRATION CONTAINED IN SECTION 4(2) OF THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT").
THIS OFFERING IS SUBJECT TO THE ISSUER TENDER OFFER REQUIREMENTS OF RULE 13E-4
OF THE SECURITIES EXCHANGE ACT, AS AMENDED (THE "EXCHANGE ACT"), AND WE HAVE
FILED A SCHEDULE TO WITH THE SECURITIES AND EXCHANGE COMMISSION ("SEC"). YOU MAY
OBTAIN A COPY OF SCHEDULE TO AND OTHER DOCUMENTS FILED BY US AT NO CHARGE AT THE
SEC WEBSITE, HTTP://WWW.SEC.GOV.
Neither the SEC nor any state securities commission has approved or disapproved
of these securities or determined if this offering circular is truthful or
complete. Any representation to the contrary is a criminal offense.
The date of this offering circular is May 3, 2005.
i
ADVISE SUCH PARTY WITH RESPECT THERETO OF UNAUTHORIZED, AND ANY REPRODUCTION OF
THIS OFFERING CIRCULAR OR RELATED DOCUMENTS, IN WHOLE OR IN PART, IS PROHIBITED.
EACH HOLDER OF EXISTING WARRANTS, BY ACCEPTING DELIVERY OF THIS OFFERING
CIRCULAR, AGREES TO RETURN IT AND ALL OTHER DOCUMENTS RECEIVED IN CONNECTION
WITH THIS OFFERING TO US IF SUCH HOLDERS OF EXISTING WARRANTS DOES NOT PURCHASE
ANY OF THE SECURITIES OR IF THE TENDER OFFER IS TERMINATED.
THIS OFFERING CIRCULAR REFERENCES IMPORTANT BUSINESS AND FINANCIAL INFORMATION
ABOUT HELIX BIOMEDIX, INC. THAT IS NOT INCLUDED IN OR DELIVERED WITH THIS
DOCUMENT. THIS INFORMATION IS AVAILABLE WITHOUT CHARGE TO HOLDERS OF EXISTING
WARRANTS UPON WRITTEN OR ORAL REQUEST TO, CAMERON ASSOCIATES, 1370 AVENUE OF THE
AMERICAS, SUITE 902, NEW YORK, NY, 10019, (212)245-8800. IN ORDER TO OBTAIN
TIMELY DELIVERY OF THE DOCUMENTS, HOLDER OF EXISTING WARRANTS MUST REQUEST THE
INFORMATION NO LATER THAN May 18, 2005.
[INTENTIONALLY BLANK]
iii
SUMMARY
The following information should be read together with the information contained
or incorporated in this offering circular. When used in this document, the terms
"Helix", "Company", "we", "our", and "us" refer to Helix BioMedix, Inc. This
summary may not contain all of the information that may be important to you. You
should read this entire offering circular, including the financial data and
related notes and the documents to which we have referred you, before making an
investment decision. You should pay special attention to the "Risk Factors"
beginning on page 9 of this offering circular to determine whether participation
in the exchange offer and an investment in our Shares is appropriate for you.
THE EXCHANGE OFFER
We have summarized the terms of the exchange offer in this section. Before you
decide to tender your Existing Warrant Shares in this exchange offer, you should
read the detailed description of the offer under "The Exchange Offer" included
in this offering circular for further information.
TERMS OF THE We are offering to redeem and cancel Existing Warrant
EXCHANGE OFFER Shares and, in exchange to issue shares of our $0.001 par
value common stock ("Shares") in either (i) a non-cash
transaction, or (ii) a cash transaction, both of which are
described as follows:
NON-CASH TRANSACTION:
Existing Warrants To be provided by you To be issued by us
- ------------------ --------------------- ------------------
2001/2002 Warrants 1 Warrant Share 0.82 Share
2002/2003 Warrants 1 Warrant Share 0.84 Share
2003 Warrants 1 Warrant Share 0.37 Share
2004 Warrants 1 Warrant Share 0.60 Share
CASH TRANSACTION:
Existing Warrants To be provided by you To be issued by us
- ---------------------------------------------------------------
2001/2002 Warrants 1 Warrant Share & $0.25 1.0 Share
2002/2003 Warrants 1 Warrant Share & $0.25 1.0 Share
2003 Warrants 1 Warrant Share & $0.56 1.0 Share
2004 Warrants 1 Warrant Share & $0.50 1.0 Share
You may tender all, some or none of you Existing Warrant
Shares. No fractional Shares will be issued as we will
round all fractions up to the next whole share.
PURPOSE OF THE We have been advised by several investment bankers that
EXCHANGE OFFER our current capital structure may hinder our ability to
effectively complete an institutional financing
transaction. We believe that a significant reduction in
our outstanding Existing Warrant Shares will broaden our
appeal to institutional investors by allowing us to (i)
simplify our capital structure, (ii) reduce the potential
future dilutive impact on our earnings per share that
could be impacted by the Existing Warrant Shares; and
(iii) diminish any overhang on our shares of common stock
that the Existing Warrant Shares would cause.
DECIDING WHETHER TO Neither we nor our officers or directors, our financial
PARTICIPATE IN THE advisor, the exchange agent, the information agent or any
EXCHANGE OFFER other person makes any recommendations as to whether you
should tender or refrain from tendering all or any of your
Existing Warrant Shares in the exchange offer. Further, we
have not authorized anyone to make any such
recommendation. You must make your own decision whether to
tender your Existing Warrant Shares in the exchange offer
and, if so, the aggregate number of Existing Warrant
Shares to tender. You should read this entire offering
circular, and we encourage you to consult with your
advisors, if any, to make that decision based on your own
financial position and requirements.
1
EXPIRATION DATE; The exchange offer and withdrawal rights will expire at
EXTENSION; 9:00 a.m., New York time, on May 31, 2005, or any
TERMINATION subsequent time or date to which the exchange offer is
extended. We may extend the expiration date or amend any
of the terms or conditions of the exchange offer for any
reason. In the case of an extension, we will issue a press
release or other public announcement no later than 9:00
a.m., New York time, on the next business day after the
previously scheduled expiration date. If we extend the
expiration date, you must tender your Existing Warrant
Shares prior to the date identified in the press release
or public announcement if you wish to participate in the
exchange offer.
In the case of amendment, we will issue a press release or
other public announcement. We have the right to:
- extend the expiration date of the exchange offer
and retain all tendered Existing Warrant Shares,
subject to your right to withdraw your tendered
Existing Warrant Shares; and
- waive any condition or otherwise amend any of the
terms or conditions of the exchange offer in any
respect.
Any Existing Warrants that cover Existing Warrant Shares
not accepted for exchange for any reason will be promptly
returned, without expense, to the tendering holder after
the expiration or termination of the exchange offer.
WITHDRAWAL RIGHTS You may withdraw a tender of your Existing Warrant Shares
at any time before the exchange offer expires by
delivering a written notice of withdrawal in the form
attached to this offering circular as Appendix A to U.S.
Stock Transfer Corporation, the exchange agent, before the
expiration date. If you change your mind, you may
re-tender your Existing Warrant Shares by again following
the exchange offer procedures before the exchange offer
expires. See "The Exchange Offer-Withdrawal Rights".
TRANSFER OF SHARES The Shares have not been registered under the Securities
Act and are subject to certain restrictions on transfer.
USE OF PROCEEDS We intend to use any net proceeds to us from this exchange
offer to continue efforts to out-license our proprietary
peptides in non-pharmaceutical fields of use, continue
research and development efforts, protect our intellectual
property and for general corporate purposes. Pending such
use, the estimated net proceeds of this offering will be
invested in short-term, investment-grade, interest-bearing
securities.
PROCEDURES FOR Existing Warrant Shares may be tendered by providing the
TENDERING exchange agent with (i) your original Existing Warrant
OUTSTANDING EXISTING instrument(s) that cover the tendered Existing Warrant
WARRANT SHARES Shares; (ii) a completed letter of transmittal package in
the form set forth at Appendix B to this offering circular
and, (iii) if applicable, a check payable to Helix
BioMedix, Inc. in the amount due for the exchange as
determined on the Warrant Exchange Schedule which is
included as part of the Letter of Transmittal package
(collectively the "Tender Documents").
If you hold Existing Warrant Shares through a broker,
dealer, commercial bank, trust company or other nominee,
you should contact that person promptly if you wish to
tender your Existing Warrant Shares, as well as submit the
Tender Documents to the exchange agent. We will determine
in our sole discretion whether and if Existing Warrant
Shares have been validly tendered.
Please do not send any of the Tender Documents to us. You
should send the Tender Documents to U.S. Stock Transfer
Corporation, the exchange agent, at its offices as
indicated under "The Exchange Offer-Exchange Agent". The
exchange agent can answer your questions regarding how to
tender your Existing Warrant Shares.
2
ACCEPTANCE OF If all conditions to the exchange offer are satisfied or
EXISTING WARRANT waived prior to the expiration date, we will accept all
SHARES Existing Warrant Shares properly tendered and not
withdrawn prior to the expiration of the exchange offer
and will issue the Shares promptly after the expiration
date. We will issue Shares in exchange for Existing
Warrant Shares that are accepted for exchange only after
receipt by the exchange agent of the Tender Documents.
TRADING Our common stock is traded over-the-counter under the
symbol "HXBM.OB".
INFORMATION AGENT Cameron Associates is the information agent for this
exchange offer. Its address and telephone numbers are
located in the section entitled "The Exchange
Offer-Information Agent" and on the back cover of this
offering circular.
EXCHANGE AGENT U.S. Stock Transfer Corporation is the exchange agent for
the exchange offer. Its address and telephone numbers are
located in the section entitled "The Exchange
Offer-Exchange Agent" and on the back cover of this
offering circular.
FINANCIAL ADVISOR G.C. Andersen Partners, LLC is acting as our financial
advisor for this exchange offer.
RISK FACTORS You should carefully consider the matters described under
"Risk Factors", as well as all other information set forth
in this offering circular.
CONSEQUENCES OF NOT Existing Warrant Shares not exchanged in the exchange
EXCHANGING EXISTING offer shall continue in effect in accordance with the
WARRANT SHARES terms and conditions set forth in the respective Existing
Warrant instrument(s).
TAX CONSEQUENCES See "Material U.S. Federal Income Tax Considerations" for
a summary of certain U.S. Federal income tax consequences
or potential consequences from the exchange of Existing
Warrant Shares for Shares.
[INTENTIONALLY BLANK]
3
HELIX BIOMEDIX, INC.
We were incorporated in Colorado on February 2, 1988, and, on November 1, 2000
we merged into a newly formed Delaware corporation. We are a development stage
company and have never generated any material revenue. Our mission is to become
an industry leader in developing and commercializing small proteins known as
bioactive peptides.
We have developed a proprietary library containing a broad and diverse array of
synthetic bioactive peptides. Our primary commercial objective is to out-license
certain rights to our proprietary peptides in distinct fields of use. As of the
date of this offering circular we employ 8 full-time individuals. We have
recently announced the issuance of U.S. Patent No. 6,875,744, entitled "Short
Bioactive Peptides." The patent covers a vast family of bioactive peptides
designed for low cost synthesis and improved bioactivity. Specifically, this
patent covers the composition of matter and use for peptides of 5 to 20 amino
acids in length that consist, in large part, of four specific amino acids. This
patent significantly expands our technology platform of proprietary peptides for
therapeutic and consumer product applications.
Our principal executive offices are located at 22122 20th Ave. S.E., Suite 148,
Bothell, WA 98021 and our telephone number is (425) 402-8400. Our website is
www.helixbiomedix.com. Information contained on our website is not part of, and
is not incorporated into this offering circular. Our filings with the SEC are
available without charge on our website as soon as reasonably practicable after
filing.
[INTENTIONALLY BLANK]
6
SUMMARY FINANCIAL INFORMATION
The following summary financial information should be read in conjunction with
our Annual Report on Form 10-KSB for the year ended December 31, 2004, set forth
as Appendix G, and our definitive 2005 Proxy Statement, set forth as Appendix H.
The summary statement of operations information for the fiscal years ended
December 31, 2004 and December 31, 2003, and the summary balance sheet
information as of December 31, 2004 and December 31, 2003, are derived from our
audited financial statements included in our annual report on Form 10-KSB for
the fiscal year ended December 31, 2004
COMPARISON OF 2004-2003 OPERATIONS
FOR THE YEARS ENDED
----------------------------
STATEMENT OF OPERATIONS DATA: 2004 2003
----------------------------- ------------ ------------
Revenue $ 93,661 $ 88,465
Research and development 915,157 844,450
Depreciation and amortization 160,578 205,126
Accounting. legal, and professional 312,561 257,169
Consulting fees 128,006 189,126
General and administrative 1,715,196 1,804,554
Other (income) expense (28,563) (16,457)
------------ ------------
Net loss $ (3,109,274) $ (3,195,503)
============ ============
Basic and diluted net loss per share $ (0.23) $ (0.28)
Weighted average shares outstanding 13,290,408 11,231,277
Balance Sheet Data:
Cash and Cash Equivalents $ 1,908,028 $ 2,070,906
Working Capital 1,821,253 1,922,953
Accumulated deficit (17,027,344) (13,918,070)
Total stockholders' equity 2,679,034 2,934,195
Book value per common share 0.20 0.24
7
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2004
NON-CASH CASH
TRANSACTION TRANSACTION
------------ ------------
PROFORMA STATEMENT OF OPERATIONS DATA:
Revenue $ 93,661 $ 93,661
Research and development 915,157 915,157
Depreciation and amortization 160,578 160,578
Accounting, legal and professional 312,561 312,561
Consulting fees 128,006 128,006
General and administrative 1,715,196 1,715,196
Other (income) expense (28,563) (28,563)
------------ ------------
Net loss $ (3,109,274) $ (3,109,274)
============ ============
Basic and diluted net loss per share $ (0.18) $ (0.16)
Weighted average shares outstanding (1) 17,255,763 19,507,108
PROFORMA BALANCE SHEET DATA:
Cash and cash equivalents $ 1,908,028 $ 4,313,864
Working Capital 1,821,154 4,226,990
Accumulated deficit (17,027,344) (17,027,344)
Total stockholders' equity 2,679,034 5,084,870
Book value per common share 0.20 0.38
(1) Assumes warrant conversion to common stock as of January 1, 2004.
8
THE EXCHANGE OFFER
TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING EXISTING WARRANT SHARES
The exchange offer is being made to qualified investors who are the holders of:
- Warrants to purchase shares of our common stock issued as part of
the units described in our Private Placement Memorandum dated March
2002 ("2001/2002 Warrants");
- Warrants to purchase shares of our common stock issued as part of
the units described in our Private Placement Memorandum dated
September 2002, and amended December 2002 ("2002/2003 Warrants");
- Warrants to purchase shares of our common stock issued as part of
the units described in our Private Placement Memorandum dated
November 2003 ("2003 Warrants"); and
- Warrants to purchase shares of our common stock issued as part of
the units described in our Private Placement Memorandum dated March
2004 ("2004 Warrants").
The unique warrant numbers representing the 2001/2002 Warrants are set forth on
Appendix C-1 to this offering circular and the form of warrant instrument for
the 2001/2002 Warrants is set forth on Appendix C. The unique warrant numbers
representing the 2002/2003 Warrants are set forth on Appendix D-1 to this
offering circular and the form of warrant instrument for the 2002/2003 Warrants
is set forth on Appendix D. The unique warrant numbers representing the 2003
Warrants are set forth on Appendix E-1 to this offering circular and the form of
warrant instrument for the 2003 Warrants is set forth on Appendix E. The unique
warrant number representing the 2004 Warrants are set forth on Appendix F-1 to
this offering circular and the form of warrant instrument for the 2004 Warrants
is set forth on Appendix F.
The issued and outstanding 2001/2002 Warrants, 2002/2003 Warrants, 2003 Warrants
and 2004 Warrants are collectively referred to herein as the "Existing Warrants"
and the shares of our $0.001 par value common stock issuable upon exercise of
the Existing Warrants are referred to herein as the "Existing Warrant Shares".
We are offering to redeem and cancel Existing Warrant Shares and, in exchange to
issue shares of our $0.001 par value common stock ("Shares") in either (i) a
non-cash transaction or (ii) a cash transaction, as follows:
NON-CASH TRANSACTION:
Existing Warrants To be provided by you To be issued by us
- ------------------ --------------------- ------------------
2001/2002 Warrants 1 Warrant Share 0.82 Share
2002/2003 Warrants 1 Warrant Share 0.84 Share
2003 Warrants 1 Warrant Share 0.37 Share
2004 Warrants 1 Warrant Share 0.60 Share
CASH TRANSACTION:
Existing Warrants To be provided by you To be issued by us
- ----------------- --------------------- ------------------
2001/2002 Warrants 1 Warrant Share & $0.25 1.0 Share
2002/2003 Warrants 1 Warrant Share & $0.25 1.0 Share
2003 Warrants 1 Warrant Share & $0.56 1.0 Share
2004 Warrants 1 Warrant Share & $0.50 1.0 Share
You may tender all, some or none of your Existing Warrant Shares, subject to the
terms and conditions of the exchange offer. No fractional Shares will be issued
in the exchange offer as we will round all fractions up to the nearest whole
share. The exchange agent must be provided with all of the necessary documents
to validly tender Existing Warrant Shares prior to the expiration date. See
"Procedures for Tendering Existing Warrant Shares".
17
The exchange offer is not being made to, and we will not accept tenders for
exchange from holders of Existing Warrant Shares in any jurisdiction in which
the exchange offer or the acceptance of the offer would not be in compliance
with the securities or blue sky laws of that jurisdiction.
EXPIRATION DATE
The expiration for the exchange offer is 9:00 a.m., New York time, on May 31,
2005, unless we extend the offer. We may extend this expiration date for any
reason. The last date on which tenders will be accepted, whether on May 31, 2005
or any later date to which the exchange offer may be extended, is referred to as
the expiration date.
EXTENSIONS; AMENDMENTS
We expressly reserve the right, in our discretion, for any reason to:
- delay the acceptance of any Existing Warrant Shares tendered for
exchange for example, in order to allow for the rectification of any
irregularity or defect in the tender of Existing Warrant Shares;
- extend the time period during which the exchange offer is open, by
giving oral or written notice of extension to the holders of
Existing Warrant Shares in the manner described below; during any
extension, all Existing Warrant Shares previously tendered and not
withdrawn will remain subject to the exchange offer;
- waive any condition or amend any of the terms or conditions of the
exchange offer; and
- terminate the exchange offer, as described under "Conditions for
Completion of Exchange Offer" below;
provided that in any event we will promptly issue Shares or return tendered
Existing Warrant instrument(s) after expiration or withdrawal of the exchange
offer.
If we consider an amendment to the exchange offer to be a material condition of
the exchange offer, we will promptly disclose the amendment or waiver in an
offering circular supplement, and if required by law, we will extend the
exchange offer for a period of at least 20 business days.
We will promptly give oral or written notice of any (i) extension, (ii)
amendment, (iii) non-acceptance or (iv) termination of the offer to the holders
of the Existing Warrants. In the case of any extension, we will issue a press
release or other public announcement no later than 9:00 a.m. New York time, on
the next business day after the previously scheduled expiration date.
PROCEDURES FOR TENDERING EXISTING WARRANT SHARES
Existing Warrant Shares may be tendered by providing the exchange agent with (i)
your original Existing Warrant instrument(s); (ii) a completed letter of
transmittal package in the form set forth at Appendix B to this offering
circular and, (iii) if applicable a check payable to Helix BioMedix, Inc. in the
amount determined on the letter of transmittal (collectively the "Tender
Documents").
Please do not send the Tender Documents to us. You should send the Tender
Documents to U.S. Stock Transfer Corporation, the exchange agent, at its offices
as indicated under "The Exchange Offer-Exchange Agent". The exchange agent can
answer your questions regarding how to tender your Existing Warrant Shares.
Your tender to us of Existing Warrant Shares and our acceptance of your tender
will constitute a binding agreement between you and us upon the terms and
subject to the conditions set forth in this offering circular.
If you hold Existing Warrant Shares through a broker, dealer, commercial bank,
trust company or other nominee, you should contact that person promptly if you
wish to tender your Existing Warrant Shares, as well as submit a letter of
transmittal and other agreements and documents described in this document. We
will determine in our sole discretion whether and if Existing Warrant Shares
have been validly tendered.
BINDING INTERPRETATIONS
- We will determine in our sole discretion, all questions as to the
validity, form, eligibility and acceptance of Existing Warrant
Shares tendered for exchange. Our determination will be final and
binding. We reserve the absolute right to
18
NOTICE TO INVESTORS
An investment in the Shares offered hereby involves substantial risk and
possible loss by a prospective investor of his/her/its entire investment. The
Shares will be offered and sold only to a holder of Existing Warrants who
represents, among other things, that such holder is acquiring the Shares for its
own account, for investment only and not with a view toward the resale or
distribution thereof, that such holder understands and acknowledges that the
Shares have not been registered under the Securities Act or other applicable
securities laws and that such holder's transfer rights are restricted by the
Securities Act, applicable state securities laws, and the absence of a market
for the Shares.
In connection with an investment in the Shares, we will require that each holder
represent and warrant in writing as follows:
1. That you have such knowledge and experience in financial and business matters
that you are capable of evaluating the merits and risks of the prospective
investment.
2. That you (a) have received our offering circular dated May 3, 2005, together
with all the exhibits attached hereto; (b) are aware that we file annual reports
on Form 10-KSB, quarterly reports on Form 10-QSB, special reports on Form 8-K,
proxy statements, and other information with the SEC that you can access without
charge by visiting the SEC's website, which is found at www.sec.gov or at the
Company's web site found at www.HelixBioMedix.com (c) acknowledge that you have
been granted a reasonable period of time during which you have had the
opportunity to obtain such additional information as you have deemed necessary
to permit you to make an informed decision with respect to the exchange of the
Existing Warrants and the receipt of the Shares; and (d) that you represent and
warrant that you (i) have reviewed such information as you deem necessary to
make an informed investment decision; (ii) have had the opportunity to ask
questions of and receive answers from our management; and (iii) are fully aware
of the current business prospects, financial condition, and operating history as
set forth in our public filings and this Offering Circular.
3. Whether the holder: (a) is an individual who has a net worth or joint net
worth with his or her spouse in excess of $1,000,000; (b) is a natural person
who had an individual income in excess of $200,000 in the prior two years or
joint income with his or her spouse in excess of $300,000 in each of those years
and has a reasonable expectation of reaching the same income level in the
current year; (c) is a director or executive officer of the company; (d) is
either (i) a bank as defined in Section 3(a)(2) of the Securities Act or a
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary
capacity, (ii) a broker or dealer registered pursuant to Section 15 of the
Exchange Act, (iii) an insurance company as defined in Section 2(13) of the
Securities Act, (iv) an investment company registered under the Investment
Company Act of 1940 or a business development company as defined in Section
2(a)(48) of such Act, (v) a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958, (vi) a plan established and maintained by a
state, its political subdivisions, or any agency or instrumentality of a state
or its political subdivisions, for the benefit of its employees, which has total
assets in excess of $5,000,000 or (vii) an employee benefit plan within the
meaning of the Employee Retirement Income Security Act of 1974, as amended
(ERISA), if the decision to invest in the Shares is made by a plan fiduciary (as
defined in Section 3(21) of ERISA), which is a bank, savings and loan
association, insurance company or registered investment advisor, or if the
employee benefit plan has total assets in excess of $5,000,000, or, if a
self-directed plan, whose investment decisions are made solely by persons who
are accredited investors; (e) is a private business development company as
defined in Section 202(a)(22) of the Investment Advisers Act of 1940; (f) is an
organization described in Section 501(c)(3) of the Internal Revenue Code of
1986, as amended, a corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring either of the
Shares, with total assets in excess of $5,000,000; (g) is a trust, with total
assets in excess of $5,000,000, not formed for the specific purpose of acquiring
the Shares, whose purchase is directed by a sophisticated person who has such
knowledge and experience in financial and business matters that he or she is
capable of evaluating the merits and risks of the prospective investment; or (h)
is an entity in which each of the equity owners meets the requirements of one of
the above sections. As used in this Offering Circular, the term "net worth"
means the excess of total assets at fair market value (including the investor's
home, furnishings and automobiles) over total liabilities (including mortgages)
at the time of acquisition. In determining income, an investor should add to his
or her adjusted gross income any amount attributable to tax-exempt income
received, losses claimed as a limited partner in any limited partnership,
deductions claimed for depletion, contributions to an IRA or Keogh retirement
plan, and alimony payments has been reduced in arriving at adjusted gross
income.
4. That you acknowledge that we and others will rely upon the truth and accuracy
of the foregoing acknowledgments and representations and agree that, if any of
the acknowledgments or representations deemed to have been made by you by your
acquisition of the Shares are no longer accurate, you shall promptly notify us.
If you are acquiring any Shares as a fiduciary or agent for one or more investor
accounts, you represent that you have sole investment discretion with respect to
each such account and have full power to make the foregoing acknowledgments and
representations on behalf of each such account.
26
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference room at 450 Fifth Street, N.W., Washington D.C., 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. Our SEC filings are also available to the public from the SEC's
website at http://www.sec.gov including:
- our Schedule TO-1 and Schedules TO-1/A filed on March 1, 2005, March
2, 2005, March 30, 2005, April 1, 2005 and April 28, 2005,
respectively
You may also request a copy of these files, at no cost, by writing or
telephoning the information agent at the following address:
Cameron Associates
1370 Avenue of the Americas
Suite 902
New York, NY 10019
Telephone: (212) 245-8800
[INTENTIONALLY BLANK]
32
APPENDIX A
FORM OF WITHDRAWAL LETTER
HELIX BIOMEDIX, INC.
WITHDRAWAL OF
PREVIOUSLY TENDERED EXISTING WARRANT SHARES PURSUANT TO THE
OFFER TO EXCHANGE DATED MAY 3 2005
THE WITHDRAWAL RIGHTS EXPIRE AT
9:00 A.M., NEW YORK TIME,
ON MAY 31, 2005
UNLESS THE OFFER IS EXTENDED
To: U.S. Stock Transfer
1745 Gardena Avenue
Suite 200
Glendale, CA 91204
Telephone: (818) 502-1404
Facsimile: (818) 502-0674
Delivery of this Withdrawal Letter by regular mail to an address other than as
set forth above or transmission via facsimile number other than as set forth
above will not constitute a valid delivery.
Pursuant to the terms and subject to the conditions of the exchange offer
described in the offering circular dated May 3 2005, my Letter of Transmittal
Package and this Withdrawal Letter, I hereby withdraw the tender of my eligible
Existing Warrant Shares that were previously tendered pursuant to the exchange
offer and my Letter of Transmittal.
To: Helix BioMedix, Inc.
Upon the terms and subject to the conditions set forth in the offering circular
dated May 3, 2005 (the "Offer to Exchange") and my Letter of Transmittal
Package, dated _____________, 2005 (the "Acceptance Letter" which, with the
offering circular as they may be amended from time to time, constitute the
exchange offer "Offer"), I previously tendered to Helix BioMedix, Inc., a
Delaware corporation (the "Company"):
- ________ of my Existing Warrant Shares under my 2001/2002 Existing
Warrant;
- ________ of my Existing Warrant Shares under my 2002/2003 Existing
Warrant;
- ________ of my Existing Warrant Shares under my 2003 Existing Warrant;
and/or
- ________ of my Existing Warrant Shares under my 2004 Existing Warrant.
I understand that I may withdraw the tendered Existing Warrant Shares at any
time prior to May 31, 2005. Accordingly, under and subject to the conditions set
forth in the Offer and this Withdrawal Letter, I, the undersigned, hereby
withdraw the following portion all my tendered Existing Warrant Shares:
- ________ of my tendered Existing Warrant Shares under my 2001/2002
Existing Warrant;
- ________ of my tendered Existing Warrant Shares under my 2002/2003
Existing Warrant;
- ________ of my tendered Existing Warrant Shares under my 2003 Existing
Warrant; and/or
- ________ of my tendered Existing Warrant Shares under my 2004 Existing
Warrant.
A-1
APPENDIX B
HELIX BIOMEDIX, INC.
WARRANT EXCHANGE OFFER
LETTER OF TRANSMITTAL PACKAGE
B-1
HELIX BIOMEDIX, INC.
INSTRUCTIONS TO LETTER OF TRANSMITTAL PACKAGE
YOUR RIGHT TO PARTICIPATE IN THE TENDER OFFER WILL AUTOMATICALLY EXPIRE IF NOT
EXERCISED PRIOR TO THE EXPIRATION DATE. IN ORDER TO EXCHANGE EXISTING WARRANT
SHARES YOU MUST:
1. Please carefully read the entire contents of the Offering Circular, dated
May 3, 2005.
2. If you have any questions regarding the Company or the Exchange Offer
please contact Cameron Associates, Alison Ziegler or Ray Catroppa at (212)
245-8800.
3. Complete and sign the Warrant Exchange Schedule on pages B-3 and B-4.
4. Complete and sign the Investor Suitability Questionnaire on pages B-5,
B-6, B-7 and B-8.
5. Sign and date the Registered Holder signature page on B-9.
6. If applicable, complete the Special Mailing Instructions on page B-10.
7. Complete, date and sign the IRS form W-9 on page B-11.
8. If you have not already tendered your Existing Warrants, please attach to
the Letter of Transmittal Package.
9. Mail the fully completed and originally executed Letter of Transmittal
Package to U.S. Stock Transfer Corporation, 1745 Gardena Avenue, Suite
200, Glendale, CA 91204.
B-2
HELIX BIOMEDIX, INC.
WARRANT EXCHANGE SCHEDULE
THE UNDERSIGNED HEREBY SURRENDERS THE EXISTING WARRANT INSTRUMENT(S) SHOWN BELOW
IN EXCHANGE FOR A COMMON STOCK CERTIFICATE AT THE RATE SPECIFIED IN HELIX
BIOMEDIX'S OFFERING CIRCULAR DATED MAY 3, 2005.
[ ] CHECK THIS BOX IF YOU HAVE LOST YOUR WARRANT INSTRUMENT(S) AND
RETURN THIS COMPLETED AND SIGNED FORM TO U. S. STOCK TRANSFER
CORPORATION. AN AFFIDAVIT OF LOSS WILL BE SENT TO YOU FOR
COMPLETION.
U. S. STOCK TRANSFER CORPORATION
1745 GARDENA AVENUE, SUITE 200
GLENDALE, CA 91204
TEL. 818-502-1404
FAX 818-502-1737
Name of Holder: ______________________________________
Address: ______________________________________
City: ______________________________________
State: ______________________________________
Zip: ______________________________________
PLEASE COMPLETE THIS SECTION FOR CASH TENDER TRANSACTIONS.
Existing Warrants Being Surrendered
(Please type or print legibly)
(C) Per
(B) Number of Existing Share (D) Total
Warrant Shares Cash Cash Amount
(A) Existing Warrant Instrument Number Tendered Amount (1)
- -------------------------------------- ---------------------- ------- -----------
2001/2001 Warrant # $ 0.25 $
2002/2003 Warrant # $ 0.25 $
2003 Warrant # $ 0.56 $
2004 Warrant # $ 0.50 $
(1) Product obtained by multiplying column (B) by Column (C) TOTAL $
B-3