<PAGE> 1
UNITED STATES
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: June 27, 1997
(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)
<PAGE> 2
Item 5. OTHER EVENTS
On June 27, 1997 and July 1, 1997, the Company issued 312,541 and
245,100 shares of its Class A Common Stock, respectively, in connection with two
conversions of $900,000 in total principal amount of Convertible Notes and
$20,923.29 of total accrued interest. A $6.0 million Convertible Note (the
"Note") was originally issued as part of a private placement to an institutional
investor on February 26, 1997. After these conversions, the principal amount of
Note outstanding is $5,100,000. The Company also issued Class G Stock Purchase
Warrants to purchase a total of 278,820 shares of its Class A Common Stock in
connection with the above conversions.
The Note accrues interest at an annual rate of 7%, beginning August 26,
1997 and is due and payable on February 26, 2000 if and to the extent the Note
is not previously converted pursuant to its terms. The Note is convertible
(subject to certain maximum share limitations discussed below) at the option of
the holder into shares of Class A Common Stock at a price equal to 85% of the
Market Price per share on the date of conversion, if the conversion. Pursuant to
the terms of the Note, the holder is entitled to receive (i) a Class G Stock
Purchase Warrant for each two shares of Class A Common Stock issued to the
holder upon conversion of the Note, and (ii) a certain number of Class G Stock
Purchase Warrants in the event that the Company prepays the Note. Each Class G
Stock Purchase Warrant is exercisable beginning August 26, 1997, or the first
date after February 26, 1997 when the trading price of the Class A Common Stock
is $6.00 or more, for a period of five years from the date of issue into one
share of Class A Common Stock at an exercise price of $2.97 per share.
The $6.0 million original principal amount of the Note is convertible
into an aggregate maximum of 7,257,465 shares of Class A Common Stock. There
have been no issuances other than the issuances reported herein in connection
with the conversion of the Note. In the event that the shares of Class A Common
Stock underlying the outstanding balance of the Note cannot be issued upon
request for conversion due to the above referenced maximum share limitations,
the Company is immediately obligated to repay the principal of that portion of
the Note which is presented for conversion and cannot be converted, together
with (i) a premium equal to 17.64% of such principal plus any accrued and unpaid
interest on the Note, and (ii) that number of Class G Stock Purchase Warrants
equal to 50% of the principal plus interest divided by the conversion price on
the date of 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: July 9, 1997 By: /s/ David H. Katz
------------------------ ---------------------------------
President and Chief Executive Officer
