UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 1)
Under the Securities Exchange Act of 1934
LIDAK Pharmaceuticals
(Name of Issuer)
Class A Common Stock and Class B Common Stock
(Title of Class of Securities)
531707107
---------------------------------------------
(CUSIP Number)
-----------
Dennis J. Doucette, Esq.
Steven J. Davis, Esq.
Luce, Forward, Hamilton & Scripps LLP
600 West Broadway, Ste. 2600
San Diego, California 92101
(619) 236-1414
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
March 27, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. __
Check the following box if a fee is being paid with the statement __. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
CUSIP No. 531707107
- --------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
David H. Katz, M.D.
SS# ###-##-####
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) __
(b) x
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00 HealthMed, Inc. is obligated to pay $1,528,234.98 to Dr. Katz as
evidenced by the promissory note which was given as consideration
for the shares sold by Dr. Katz and obligated to pay $263,004.00
to Medical Biology Institute ("MBI") as evidenced by the
promissory note which was given as consideration for the shares
sold by MBI.
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) __
Not applicable.
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
7 SOLE VOTING POWER
-0-
NUMBER OF
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON Class A Common Stock: 3,344,696
WITH Class B Common Stock: 385,000
10 SHARED DISPOSITIVE POWER
-0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Class A Common Stock: 3,344,696
Class B Common Stock: 385,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* __
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Class A Common Stock: 8.1%
Class B Common Stock: 88.7%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
FOR
DAVID H. KATZ, M.D.
This Amendment No. 1 amends and supplements the statement on Schedule
13D dated January 16, 1998, filed on behalf of David H. Katz, M.D., and
Amendment No. 1 of the Schedule 13D dated March 16, 1998 filed on behalf of
HealthMed, Inc. ("HealthMed"), Mitchell J. Stein, David H. Katz, M.D., Wallace
O. Reubenheimer and George Rutland, relating to the Class A Common Stock and
Class B Common Stock issued by Lidak Pharmaceuticals ("LIDAK"), a California
corporation.
Item 1. Security and Issuer.
Securities: Class A common stock, no par value ("Class A Common Stock")
Class B common stock, no par value ("Class B Common Stock")
Issuer: LIDAK Pharmaceuticals
11077 N. Torrey Pines Road
La Jolla, California 92037
Item 2. Identity and Background. This Schedule 13D is filed on behalf of
David H. Katz, M.D.
a. Name: David H. Katz, M.D.
b. Business Address: c/o Medical Biology Institute ("MBI"), 11077 N.
Torrey Pines Road, La Jolla, California 92037.
c. Dr. Katz is President/Chief Executive Officer and a director of MBI
and a director of LIDAK.
d. During the last five years, Dr. Katz has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
e. During the last five years, Dr. Katz has not been a party to a civil
proceeding of a judicial or administrative body which resulted in a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
f. Citizenship: Dr. Katz is a citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration.
On January 12, 1998, Dr. Katz sold to HealthMed 308,100 shares of Class
A Common Stock and 70,200 shares of Class B Common Stock for a total purchase
price of $1,528,234.98 pursuant to the terms of the Stock Purchase Agreement
(the "Katz Stock Purchase Agreement") dated January 12, 1998 by and between Dr.
Katz and HealthMed, Inc., a Nevada corporation ("HealthMed"). The purchase price
was paid by HealthMed in the form of a Promissory Note dated January 12, 1998
(the "Katz Promissory Note") in the principal amount of $1,528,234.98. The
maturity date of the Katz Promissory Note is January 12, 2000.
On January 12, 1998, Medical Biology Institute, a California nonprofit
public benefit corporation ("MBI"), sold to HealthMed 65,100 shares of Class A
Common Stock for a total purchase price of $263,004.00 pursuant to the terms of
the Stock Purchase Agreement ("MBI Stock Purchase Agreement") dated January 12,
1998 by and between MBI and HealthMed. The purchase price was paid by HealthMed
in the form of a Promissory Note (the "MBI Promissory Note") dated January 12,
1998 in the principal amount of $263,004.00. The maturity date of the MBI
Promissory Note is January 12, 2000. Dr. Katz is the President, Chief Executive
Officer and a director of MBI and may be deemed to beneficially own any and all
shares of LIDAK over which MBI has the power to vote or dispose.
Item 4. Purpose of Transaction.
Dr. Katz and MBI completed the transactions described herein to induce
HealthMed to make a significant investment in LIDAK.
<PAGE>
a. Not applicable.
b. Not applicable.
c. Not applicable.
d. At the request of HealthMed and to induce HealthMed to make a $130
million investment in LIDAK, on January 12, 1998, Dr. Katz sold a significant
portion of his holding of LIDAK shares to HealthMed and placed his remaining
LIDAK shares in a voting trust with HealthMed. For the same purpose, on January
12, 1998, MBI, of which Dr. Katz is a founder, director and the President and
Chief Executive Officer, also sold a significant portion of its holding of LIDAK
shares to HealthMed and placed their remaining LIDAK shares in a voting trust
with HealthMed. Neither Dr. Katz nor MBI received cash for the sale or transfer
of their LIDAK shares. Instead, Dr. Katz and MBI received promissory notes which
are not payable for two years. The sole purpose for Dr. Katz and MBI to enter
into the transactions with HealthMed was to maximize LIDAK shareholder value by
ensuring LIDAK secured the financing necessary to bring its anti-herpes drug,
LIDAKOL, to market.
As a result of the sale and transfer of shares by Dr. Katz and MBI, on
January 13, 1998, HealthMed provided a non-binding letter proposal (the
"Proposal") to LIDAK for a non-dilutive investment of up to $130 million in
LIDAK to bring LIDAKOL to market. On March 3, 1998, HealthMed withdrew the
Proposal. On March 4, 1998, LIDAK terminated Dr. Katz as President and Chief
Executive Officer of LIDAK. In so doing, LIDAK arguably lost its most valuable
asset, its principal scientist who was a key player in developing most of the
technologies which LIDAK hopes to bring to market.
On March 16, 1998, HealthMed, Mitchell J. Stein ("Stein"), Wallace O.
Raubenheimer ("Raubenheimer"), George Rutland ("Rutland") and Dr. Katz filed a
joint Schedule 13D to report the existence of a group (the "Group") formed to
achieve, among other objectives, voting control over a majority of LIDAK's
outstanding securities and seek the election of three new members to the LIDAK
Board at the LIDAK 1998 Annual Meeting of Shareholders (the "Annual Meeting").
On March 16, 1998, Raubenheimer filed a preliminary Proxy Statement (the "Proxy
Statement") on behalf of a shareholders committee (the "Shareholders Committee")
comprised of Raubenheimer and HealthMed which sought the election of Edward L.
Hennessey, Jr. ("Hennessey"), Raubenheimer and Rutland to the LIDAK Board at the
Annual Meeting.
In a press release dated March 25, 1998, LIDAK reported that LIDAK,
HealthMed, Stein, Raubenheimer, Rutland and Hennessey entered into a Settlement
Agreement (the "Settlement Agreement") which provides for the withdrawal of the
Proxy Statement, a change in the present Board, and by-law amendments to change
the number of directors and to stagger the terms of the directors. Dr. Katz has
not been provided an executed copy of the Settlement Agreement. The Settlement
Agreement was entered into over the objections of Dr. Katz and without his
endorsement. Dr. Katz objected because the Group failed to achieve its primary
objective of removing enough existing directors to gain control of the Board and
redirecting LIDAK toward maximizing shareholder value.
Dr. Katz is no longer a part of the Group. Dr. Katz disclaims the
existence of any group to which he or MBI is a party relative to the ownership
of any securities of LIDAK.
e. Pursuant to the terms of the Proposal, HealthMed proposed to make a
non-dilutive investment of up to $130 million into LIDAK. On March 3, 1998,
Healthmed withdrew the Proposal.
f. Not applicable.
g. Not applicable.
h. Not applicable.
i. Not applicable.
j. Not applicable.
<PAGE>
Item 5. Interest in Securities of the Issuer.
a. Dr. Katz is the beneficial owner of 3,344,696 shares of Class A
Common Stock and 385,000 shares of Class B Common Stock. Dr. Katz may therefore
by deemed to beneficially own 8.1% of the Class A Common Stock outstanding and
88.7% of the Class B Common Stock outstanding. Pursuant to the Articles of
Incorporation of LIDAK, each share of Class A Common Stock entitles the holder
to one vote and each share of Class B Common Stock entitles the holder to five
votes upon any and all matters submitted to the shareholders of LIDAK for a
vote.
The calculation of the percentage of shares beneficially owned as of
the date hereof is based on LIDAK's From 10-K for the Fiscal Year Ended
September 30, 1997 in which LIDAK reported there were 38,742,511 shares of Class
A Common Stock outstanding and 283,000 shares of Class B Common Stock
outstanding as of December 29, 1997. The calculation gives effect to the
automatic conversion of 163,800 shares of Class B Common Stock transferred by
Dr. Katz into the voting trust (see Item 5b. below) into 163,800 shares of Class
A Common Stock and 70,200 shares of Class B Common Stock sold by Dr. Katz into
70,200 shares of Class A Common Stock as required by the Articles of
Incorporation of LIDAK. The calculation also gives effect to (i) Dr. Katz's
exercise of his stock options (the "Options") which grant to him the right to
purchase 1,877,000 shares of Class A Common Stock and 375,000 shares of Class B
Common Stock, (ii) Dr. Katz's exercise of his Class D Warrants to purchase
386,190 shares of Class A Common Stock, (iii) Dr. Katz's wife's exercise of
options to purchase 10,000 shares of Class B Common Stock, and (iv) Dr. Katz's
wife's exercise of options to purchase 46,903 shares of Class A Common Stock and
results, for purposes of calculating the percent of class beneficially owned by
Dr. Katz in there being 41,286,604 shares of Class A Common Stock issued and
outstanding and 434,000 shares of Class B Common Stock issued and outstanding.
The Options are exercisable within 60 days. The 1,877,000 shares of Class A
Common Stock and 375,000 shares of Class B Common Stock underlying the Options
are therefore beneficially owned by Dr. Katz.
b. On January 12, 1998, Dr. Katz transferred 718,903 shares of Class A
Common Stock and 163,800 shares of Class B Common Stock into a voting trust
controlled by HealthMed pursuant to the terms of the Voting Trust Agreement (the
"Katz Voting Trust Agreement") dated January 12, 1998 by and between Dr. Katz
and HealthMed. Upon this transfer, the 163,800 shares of Class B Common Stock
automatically converted to 163,800 shares of Class A Common Stock. HealthMed is
the sole trustee of the voting trust and has the sole power to vote the shares
of Class A Common Stock and Class B Common Stock. The term of the Katz Voting
Trust Agreement is ten (10) years. During the term of the Katz Voting Trust
Agreement, Dr. Katz must place in trust all shares of Class A Common Stock and
Class B Common Stock purchased or received by him from any source. Under the
terms of the Katz Voting Trust Agreement, Dr. Katz may dispose of all of the
Class A Common Stock and Class B Common Stock held in trust; provided, however,
Dr. Katz may not dispose of more than twenty percent (20%) of the shares held in
trust within any thirty (30) day period. Dr. Katz is the beneficial owner of
these 882,703 shares of Class A Common Stock.
As part of the same transaction, Dr. Katz and HealthMed entered into a
Purchase Rights Agreement (the "Katz Purchase Rights Agreement") dated January
12, 1998 pursuant to which Dr. Katz granted HealthMed the irrevocable right to
receive 31.5% of the net proceeds (as defined in the Katz Purchase Rights
Agreement) received by Dr. Katz upon the exercise of the Options and, in the
event of the death or incapacitation of Dr. Katz, 31.5% of the shares received
by Dr. Katz upon the exercise of the Options. The term of the Katz Purchase
Rights Agreement expires on June 21, 2007.
<PAGE>
On January 12, 1998, MBI transferred 151,900 shares of Class A Common
Stock into a voting trust controlled by HealthMed pursuant to the terms of the
Voting Trust Agreement (the "MBI Voting Trust Agreement") dated January 12, 1998
by and between MBI and HealthMed. HealthMed is the sole trustee of the voting
trust and has the sole power to vote the shares of Class A Common Stock and
Class B Common Stock. The term of the MBI Voting Trust Agreement is ten (10)
years. During the term of the MBI Voting Trust Agreement, MBI must place in
trust all shares of Class A Common Stock and Class B Common Stock purchased or
received by it from any source. Under the terms of the MBI Voting Trust
Agreement, MBI may dispose of all of the Class A Common Stock and Class B Common
Stock held in trust; provided, however, MBI may not dispose of more than twenty
percent (20%) of the shares held in trust within any thirty (30) day period. Dr.
Katz is deemed to beneficially own these 151,900 shares of Class A Common Stock.
c. Dr. Katz has not entered into any agreements relating to the
securities of LIDAK since January 12, 1998 which were reported in his Schedule
13D filed on January 16, 1998.
d. Not applicable.
e. Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationship with Respect
to Securities of the Issuer.
The discussion herein regarding the (i) Katz Stock Purchase Agreement,
(ii) Katz Purchase Rights Agreement, (iii) Katz Voting Trust Agreement, (iv)
Katz Promissory Note, (v) MBI Stock Purchase Agreement, (vi) MBI Voting Trust
Agreement, (vii) MBI Promissory Note is hereby incorporated into this Item 6.
Item 7. Material to be Filed as Exhibits.
The following are incorporated by reference from the Schedule 13D filed
on behalf of Dr. Katz on January 16, 1998:
Exhibit 4.1: Katz Stock Purchase Agreement
Exhibit 4.2: Katz Purchase Rights Agreement
Exhibit 9.1: Katz Voting Trust Agreement
Exhibit 10.1: Katz Promissory Note
<PAGE>
Exhibit 4.3: MBI Stock Purchase Agreement
Exhibit 9.2: MBI Voting Trust Agreement
Exhibit 10.2: MBI Promissory Note
Exhibit 99.1: Proposal
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: March 30, 1998
/s/ David H. Katz
-----------------------------------
David H. Katz, M.D.
