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La Jolla revises terms of its series C-11, series C-21 preferred stock
Company gets waiver of preferred dividend payments through Oct. 31
By Devika Patel
Knoxville, Tenn., Aug. 25 - La Jolla Pharmaceutical Co. amended its series C-11 convertible preferred stock and series C-21 convertible preferred stock in order to raise more working capital, according to an 8-K filed Thursday with the Securities and Exchange Commission.
The amendment, which was negotiated with holders on Aug. 24, will take effect on Sept. 1 and continue through Oct. 31.
Under the amendment, holders agreed to waive the preferred dividends and also agreed to provide the company with additional working capital, in an amount to be determined, if the required holders determine by Sept. 2 and again by Sept. 26 that the company is continuing to pursue a strategic transaction.
Additionally, the investors have agreed to extend the time period for which they will purchase the company's outstanding series C preferred stock and warrants held by current and former company insiders.
In order to induce the preferred holders to agree to these changes, the company's two executive officers agreed to extend the temporary reduction of their salaries through Oct. 31. Chief executive officer Deirdre Gillespie will reduce her salary by $36,660 and chief financial officer Gail Sloan will reduce her salary by $7,178, resulting in a 50% reduction of work hours for Gillespie and a 20% reduction of work hours for Sloan.
The working capital raised from these amendments will be used to evaluate product acquisition or in-licensing opportunities that are being investigated.
La Jolla Pharmaceutical is a San Diego-based biotechnology company.
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