SEC Company Response from HELIX BIOMEDIX INC (CIK 0000831749) — May 3, 2005
HELIX BIOMEDIX INC (CIK 0000831749)
Date: May 3, 2005 · CIK: 0000831749 · Accession: 0000950124-05-002918
AI Filing Summary & Sentiment
Referenced dates: April 28, 2005
Letter
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.
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- 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>
- 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>
- 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
Show Raw Text
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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>
- 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>
- 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>
- 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
<PAGE>
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:
<TABLE>
<CAPTION>
Existing Warrants To be provided by you To be issued by us
----------------- --------------------- ------------------
<S> <C> <C>
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
</TABLE>
CASH TRANSACTION:
<TABLE>
<CAPTION>
Existing Warrants To be provided by you To be issued by us
------------------ --------------------- ------------------
<S> <C> <C>
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
</TABLE>
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
<PAGE>
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
<PAGE>
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:
<TABLE>
<CAPTION>
Existing Warrants To be provided by you To be issued by us
------------------ --------------------- ------------------
<S> <C> <C>
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
</TABLE>
CASH TRANSACTION:
<TABLE>
<CAPTION>
Existing Warrants To be provided by you To be issued by us
---------------------------------------------------------------
<S> <