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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) DECEMBER 3, 1998
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SHAMAN PHARMACEUTICALS, INC.
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(Exact name of registrant as specified in charter)
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DELAWARE 0-21022 94-3095806
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
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213 EAST GRAND AVE., SOUTH SAN FRANCISCO, CALIFORNIA 94080
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(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code (650) 952-7070
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NOT APPLICABLE
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(Former name or former address, if changed since last report.)
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Item 5. Other Events.
On December 3, 1998 Shaman Pharmaceuticals, Inc. (the "Company") filed with
the Delaware Secretary of State a Certificate of Correction Filed to Correct a
Certain Error in the Shaman Pharmaceuticals, Inc. Amended Certificate of
Designation of Preferences of Series C Convertible Preferred Stock Filed in the
Office of the Secretary of the State of Delaware on July 31, 1998 (the
"Certificate of Correction"). The Certificate of Correction was necessary to
correct an error in the description of the voting rights of the Company's Series
C Convertible Preferred Stock (the "Series C Preferred Stock"). The holders of
the Series C Preferred Stock are entitled (i) during the first year after the
issuance thereof to six votes for every one share of Series C Preferred Stock
held; and (ii) thereafter, to one vote for each share of Common Stock into which
such share of Series C Preferred Stock is convertible on the record date for the
matter to be voted on. The Certificate of Correction is attached hereto as
Exhibit 3.2 and is also incorporated herein by reference in its entirety.
In addition, on October 26, 1998, The Nasdaq Stock Market, Inc. ("Nasdaq")
informed the Company that it would continue to list the Company's Common Stock
on The Nasdaq National Market, provided it complied with, among other things,
the following public disclosure requirements:
(1) On or before December 15, 1998, the Company must make a public filing
with each of the Securities and Exchange Commission and Nasdaq showing
an October 31, 1998 balance sheet with (a) pro forma adjustments for
any significant transactions or events occurring on or before the
filing date and (b) evidencing a minimum of $8.0 million in net
tangible assets; and
(2) On or before February 1, 1999, the Company must make a public filing
with the each of the Securities and Exchange Commission and Nasdaq
showing a November 30, 1998 balance sheet with (a) pro forma
adjustments for any significant transactions or events occurring on or
before the filing date and (b) evidencing a minimum of $14.0 million
in net tangible assets.
As of October 31, 1998, the Company's balance sheet showed a net deficiency
of ($5,165,233). Since October 31, 1998, the following events have occurred:
(1) On November 3, 1998, certain investors converted an aggregate
principal amount of $536,881 of the Company's Senior Subordinated
Convertible Notes due August 29, 2000 (the "Notes") into an aggregate
of 545,550 shares of the Company's Common Stock (the "November
Conversion").
(2) On November 7, 1998, the Company issued 747,206 shares of Common Stock
to certain consultants as compensation for services rendered.
(3) On December 2, 1998, the Company renegotiated the terms of an existing
agreement with Lipha s.a. ("Lipha"). Under the new terms, the Company
accepted a one-time up front payment of an aggregate of $2.0 million
from Lipha in lieu of $6.0 million in aggregate payments due over the
remaining term of the original agreement.
(4) On December 4, 1998, the Company completed a private placement (the
"Private Placement") of an aggregate of 4,812,071 shares of its Common
Stock for aggregate proceeds of $7,218,106.50.
(5) On December 10, 1998, the Company and certain institutional investors
exchanged an aggregate of $4,786,225.41 (including accrued interest)
of the Notes for an aggregate of 4,784 shares of the Company's Series
D Convertible Preferred Stock (the "Exchange").
As a result of the November Conversion, the renegotiation with Lipha, the
Private Placement and the Exchange, pro forma net tangible assets of the Company
at October 31, 1998 were $8,227,873. Accordingly, the first criteria imposed by
Nasdaq for the continued listing of the Company's Common Stock on The Nasdaq
National Market has been satisfied.
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Item 7. Financial Statements and Exhibits.
The unaudited pro forma balance sheet as of October 31, 1998 presented
below is presented as if the Company had completed the November Conversion, the
renegotiation with Lipha, the Private Placement and the Exchange. This pro
forma balance sheet should be read in conjunction with the Company's financial
statements and the related notes thereto. The pro forma financial information is
not necessarily indicative of the results that would have been reported had such
events actually occurred on the dates specified, nor is it indicative of the
Company's future results.
SHAMAN PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS
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October 31, 1998
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Actual As adjusted
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ASSETS
Current assets:
Cash and cash equivalents $ 4,513,158 $ 13,583,158
Short-term investments 2,029,705 2,029,705
Amounts due from related parties 462,164 462,164
Prepaid expenses and other current assets 842,850 842,850
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Total current assets 7,847,877 16,917,877
Property and equipment, net 3,143,413 3,143,413
Other assets 584,224 584,224
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Total assets $ 11,575,514 $ 20,645,514
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LIABILITIES AND STOCKHOLDERS' EQUITY (NET
CAPITAL DEFICIENCY)
Current liabilities:
Accounts payable and other accrued expenses $ 1,460,153 $ 1,460,153
Accrued clinical trial costs 2,829,890 2,829,890
Accrued professional fees 734,230 734,230
Accrued compensation 428,158 428,158
Advances - contract research 218,750 1,218,750
Current installations of long-term obligations 2,595,620 2,566,549
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Total current liabilities 8,266,801 9,237,730
Long-term obligations, excluding current installments 3,179,911 3,179,911
Senior convertible notes 5,294,035 --
Stockholders' equity (net capital deficiency):
Preferred stock 515 520
Common stock 22,688 29,135
Additional paid-in capital 137,843,110 152,303,874
Deferred compensation and other adjustments (47,237) (47,237)
Accumulated deficit (142,984,309) (144,058,419)
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Total stockholders' equity (net capital deficiency) (5,165,233) 8,227,873
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Total liabilities and stockholders' equity (net
capital deficiency) $ 11,575,514 $ 20,645,514
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(c) Exhibits.
The following document is filed as an exhibit to this report:
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3.2 Certificate of Correction Filed to Correct a Certain Error in the
Shaman Pharmaceuticals, Inc. Amended Certificate of Designation of
Preferences of Series C Convertible Preferred Stock Filed in the
Office of the Secretary of the State of Delaware on July 31, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SHAMAN PHARMACEUTICALS, INC.
DATE: December 15, 1998 By: /s/ Lisa A. Conte,
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Lisa A. Conte,
President and Chief Executive Officer
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EXHIBIT INDEX
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EXHIBIT
NUMBER DOCUMENT DESCRIPTION
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3.2 Certificate of Correction Filed to Correct a Certain Error in the
Shaman Pharmaceuticals, Inc. Amended Certificate of Designation of
Preferences of Series C Convertible Preferred Stock Filed in the
Office of the Secretary of the State of Delaware on July 31, 1998.
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EXHIBIT 3.2
CERTIFICATE OF CORRECTION
FILED TO CORRECT A CERTAIN ERROR IN
THE SHAMAN PHARMACEUTICALS, INC.
AMENDED CERTIFICATE OF DESIGNATION OF PREFERENCES
OF SERIES C CONVERTIBLE PREFERRED STOCK
FILED IN THE OFFICE OF THE SECRETARY OF THE STATE OF DELAWARE ON
JULY 31, 1998
SHAMAN PHARMACEUTICALS, INC. a corporation organized and existing under the
laws of the State of Delaware, hereby certifies as follows:
1. The name of this corporation is Shaman Pharmaceuticals, Inc.
2. That an Amended Certificate of Designation of Preferences of Series C
Convertible Preferred Stock (the "Certificate of Designation") was filed by the
Secretary of State of Delaware on July 31, 1998 and that said Certificate of
Designation requires correction as permitted by Section 103 of the General
Corporation Law of the State of Delaware.
3. The inaccuracy or defect of said Certificate of Designation is as
follows: Section 8 of the Certificate of Designation inadvertently states that
each share of Series C Preferred Stock shall be entitled during the first year
after the issuance thereof to one vote for each six shares held. Section 8 of
the Certificate of Designation should state that each share of Series C
Preferred Stock shall be entitled during the first year after the issuance
thereof to six votes for each one share held.
4. Section 8 of the Certificate of Designation is hereby corrected to
read as follows:
SECTION 8. VOTING RIGHTS. Except as otherwise required by law or expressly
provided herein, each share of Series C Preferred Stock shall have voting
rights and powers equal to the voting rights and powers of the Common Stock
(except as otherwise expressly provided herein or as required by law,
voting together with the Common Stock as a single class) and shall be
entitled to notice of any stockholders' meeting in accordance with the
Bylaws of the Corporation. Fractional votes shall not, however, be
permitted and any fractional voting rights resulting from the above formula
(after aggregating all shares into which shares of Series C Preferred Stock
held by each holder could be converted) shall be rounded to the nearest
whole number (with one-half being rounded upward). Each share of Series C
Preferred Stock shall be entitled (i) during the first year after the
issuance thereof to six votes for each one share held and (ii) thereafter,
to one vote for each share of Common Stock into which such share of Series
C Preferred Stock is convertible on the record date for the matter to be
voted upon.
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IN WITNESS WHEREOF, this Certificate of Correction to the Amended
Certificate of Designation of Preferences of Series C Convertible Preferred
Stock has been signed by the President of the corporation thereunto duly
authorized as of this 3rd day of December, 1998.
SHAMAN PHARMACEUTICALS, INC.
By /s/ Lisa A. Conte
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Lisa A. Conte,
President and Chief Executive Officer
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