Quorum quandary

It happened again. For the second time in less than five weeks, HemispherxBiopharma Inc. was forced Friday to adjourn its annual shareholder meeting because a quorum of shares was not represented.

What to do? Change the rules.

Dianne Will, who handles investor relations for Hemispherx, told me yesterday that she had been contacting shareholders in Europe to urge them to vote their proxies.

The firm needed 50 percent, plus one, of its approximately 74 million shares represented for the annual meeting, first scheduled for Sept. 17. It didn't happen then, and only 48.5 percent were accounted for by Friday's second meeting attempt.

About half the company shares are owned by European investors, particularly in Belgium, Will said. She credits past coverage of Hemispherx by a German analyst and reports in a Belgian newsletter for the ownership there. The firm established a subsidiary in Belgium in 1998, though that entity "has little or no activity," according to the company's second-quarter financial filing this summer.

In the same filing, Hemispherx, which is developing treatments for flu and genital warts, reported just $15,000 in revenue and a loss of $2.8 million for the three months that ended June 30. The company will report third-quarter earnings in November.

Will said some of the Belgian investors just weren't used to this level of participation in public companies. In addition, some banks and other institutions that receive proxy statements from U.S. companies on behalf of investors don't automatically forward the paperwork to the share owners, she said.

With shares selling at 35 cents, as of yesterday's close, Hemispherx might not be high on those investors' radar, either.

Just in case, the board of directors last week amended the bylaws on a onetime basis, Hemispherx said in a statement. The quorum for the meeting, now set for Nov. 11 at the Crown Plaza in Center City, is 44 percent of shares.

Problem solved.


Mike Armstrong is away. Contact Reid Kanaley at 215-854-51140 or rkanaley@phillynews.com.