SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of
1934
Date of Report: December 11, 1996
(Date of earliest event reported)
LIDAK PHARMACEUTICALS
(Exact name of registrant as specified in its charter)
CALIFORNIA
(State or other jurisdiction of incorporation)
0-18734 33-0314804
(Commission File Number) (IRS Employer
Identification No.)
11077 North Torrey Pines Road, La Jolla, California 92037
(Address of principal executive offices) (Zip code)
(619) 558-0364
(Registrants telephone number, including area code)
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Item 5. OTHER EVENTS
A total of $13.5 million of Convertible Notes ("Notes")
were originally issued by the Company as part of a private
placement to institutional investors in November 1995,
December 1995 and January 1996. The $13.5 million original
principal amount of the Notes was convertible into an
aggregate maximum of 5,513,018 shares of the Company's Class A
Common Stock at the option of the holders, with each individual
note limited to a pro-rata amount of such number of shares.
On December 11, 1996 and December 16, 1996, the
Company issued 624,220 and 79,951 shares, respectively, of its
Class A Common Stock in connection with the conversions of
$700,000 and $100,794, respectively, in principal amounts
of Convertible Notes ("Notes") resulting in an aggregate
issuance of 5,511,680 shares of stock to date pursuant to the Notes.
As a result of the December 16, 1996 transaction, two of the
noteholders reached their pro-rata portion of the maximum
share limitation as described above. On December 19, 1996,
the Company repaid $1,728,393 representing $1,375,539 of
original principal, and $352,854 of premium and accrued
interest to such noteholders pursuant to the terms of the
Notes thus retiring the entire balance of the principal and
interest on these Notes.
As a result of the above events, there is one
note remaining in the principal amount of $1.3 million
("Note"). This Note was issued in January 1996 with an
original principal amount of $3.0 million. The Note is
convertible at the option of the holder (subject to the
maximum share limitations set forth above) into Class A Common
Stock at a price equal to 80% of the average closing bid price
for the Class A Common Stock on the NASDAQ for the seven
trading days prior to the date of conversion. The outstanding
principal amount of Note accrues interest at an annual rate of 7%,
beginning six months from the dates of issue, with the principal
due and payable two years from the date of issue if and to the extent
that the Note is not previously converted.
In the event the noteholder requests conversion of
the remaining principal amount, the Company is immediately
obligated to repay the principal of that portion of the
Note which is presented for conversion which cannot be
converted plus a premium equal to 25% of such principal
plus any accrued and unpaid interest. As of the date of
this filing, the Company would be required to pay the
note holder approximately $1.6 million as repayment of the
remaining principal plus premium and any accrued and unpaid
interest. At its option, the noteholder can require the
Company to seek shareholder approval to issue shares of Class
A Common Stock at the then fair market value in exchange
for the above-referenced principal and premium payment.
SIGNATURES
Pursuant to the requirements of the Securities
and Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned
hereunto duly authorized.
LIDAK PHARMACEUTICALS
Date: December 24, 1996 By:/s/David H. Katz
-----------------------------
President and Chief
Executive Officer
