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Biotech / Medical : Lidak Pharm. [LDAKA]
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To: Roland Chen who wrote (876)1/22/1998 12:03:00 PM
From: Henry Volquardsen  Read Replies (1) of 1115
 
The 13D makes very interesting reading and I would highly recommend spending the time.

Some highlights.

Dr Katz is selling his shares for $4.04. He is not receiving cash but a promissory note that matures Jan 12 2000. He will earn 10% on this note but HealthMed can prepay at any time.

HealthMed also has the irrevocable right to purchase 31.5% of any shares or net proceeds Dr Katz recieves from the exercise of his stock options.

The voting trust for the balance of his shares is very interesting. The term of the trust is 10 years. Any new shares Dr Katz purchases or receives must go into this trust. During the agreement Dr Katz can not sell more than 20% of his shares in any 30 day period and must give written notice to HealthMed at least 24 hours in advance. He must also sell publicly so he can't sell privately to some other company. So Dr Katz continues to own the shares but is restricted in his ability to sell.

Re HealthMed, they are affiliated with severla large healthcare companies but the only one named is National Century Financial Enterprises. NCFE is one of the largest health care financers in the century (obvious typo) with assets well in excess of $1 billion. The prsident of HealthMed is Mitchell J Stein. There are several interesting comments regarding future plans:

-"it appears to us imperative that Lidak consummate plans to saturate the (billion-dollar-plus herpes) market immediately upon FDA approval. Indeed, this is the best way to assure methodical development of Lidak's other revolutionary technologies"

-Stage 1 will be $13 to $30 million and will be advanced within three to four weeks of plan approval. "This money will be earmarked to provide Lidak with resources to facilitate and revitalize research and development on ongoin and various othe Lidak technologies which may have been temporarily scaled back to conserve precious and limited available capital." "Concurrent with the R&D emphasis...Stage 1 monies will also be used to provide the necessary funds to properly assess, strategize and otherwise prepare Lidak and its staff (and potential partners) for manufacturing, marketing and distributing Lidakol...."

all italics are my emphasis.

Henry

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