<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
September 28, 1995
(Earliest event reported - July 19, 1995)
Commission File Number 0-8092
OXIS INTERNATIONAL, INC.
A Delaware corporation
I.R.S. Employer Identification No. 94-1620407
6040 N. Cutter Circle, Suite 317
Portland, OR 97217
Telephone: (503) 283-3911
FAX: (503) 283-4058
<PAGE>
Item 7. Financial Statements and Exhibits
- ------------------------------------------
(a) and (b) Financial Statements and Pro Forma Financial Information
--------------------------------------------------------
On August 3, 1995, the Company filed a Report on Form 8-K reporting the
acquisition of Therox Pharmaceuticals, Inc. ("Therox"). The Report on Form
8-K indicated that additional financial information would be filed under
cover of a Form 8-K/A report. The additional financial information is
provided herewith, as follows.
. Audited financial statements of Therox as of, and for the two years
ended, December 31, 1994.
. Unaudited financial statements of Therox as of, and for the three months
ended March 31, 1995.
. Pro forma balance sheets for the two companies combined as of December
31, 1994 and March 31, 1995.
. Pro forma statements of operations for the two companies for the year
ended December 31, 1994 and for the three months ended March 31, 1995.
(c) Exhibits
--------
Exhibit 99(1) Audited financial statements of Therox as of, and for the two
years ended, December 31, 1994.
Exhibit 99(2) Unaudited financial statements of Therox as of, and for the
three months ended March 31, 1995.
Exhibit 99(3) Unaudited pro forma financial information including:
. A pro forma balance sheet for the two companies combined as of December
31, 1994.
. A pro forma statement of operations for the two companies combined for
the year ended December 31, 1994.
. A pro forma balance sheet for the two companies combined as of March 31,
1995.
. A pro forma statement of operations for the two companies combined for
the three months ended March 31, 1995.
2
<PAGE>
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 hereunto duly authorized.
September 28, 1995 OXIS International, Inc.
s/ Jon S. Pitcher
-----------------------
Jon S. Pitcher
Chief Financial Officer
3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page
Exhibit Number
- ------- ------
<S> <C> <C>
99(1) Audited financial statement of
Therox as of, and for the two
years ended, December 31, 1994. 5
99(2) Unaudited financial statements
of Therox as of, and for the three
months ended March 31, 1995. 14
99(3) Unaudited pro forma financial
information including: 19
. A pro forma balance sheet for
the two companies combined as
of December 31, 1994.
. A pro forma statement of operations
for the two companies combined for
the year ended December 31, 1994.
. A pro forma balance sheet for the
two companies combined as of
March 31, 1995.
. A pro forma statement of operations
for the two companies combined for
the three months ended March 31, 1995.
</TABLE>
4
<PAGE>
EXHIBIT 99(1)
Audited Financial Statements
Therox Pharmaceuticals, Inc.
December 31, 1994 and 1993
5
<PAGE>
[LETTERHEAD OF BARNA, KOWALL & COMPANY APPEARS HERE]
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Shareholders
Therox Pharmaceuticals, Inc.
We have audited the accompanying balance sheets of Therox Pharmaceuticals, Inc.
(a development stage enterprise) as of December 31, 1994 and 1993, and the
related statement of operations, and shareholders' equity and cash flows for the
year ended December 31, 1994 and the period from July 1, 1993 (date of
inception) to December 31, 1993. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material aspects, the financial position of Therox Pharmaceuticals, Inc. at
December 31, 1994 and 1993 and the results of its operation and its cash flows
for the year ended December 31, 1994 and for the period from July 1, 1993 (date
of inception) to December 31, 1993, in conformity with generally accepted
accounting principles.
/s/ Barna, Kowall & Company
June 22, 1995
6
<PAGE>
THEROX PHARMACEUTICALS, INC.
(A Development Stage Enterprise)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
1994 1993
----------- -----------
<S> <C> <C>
ASSETS
Current Assets
Cash $ 470,740 $ 894,358
Prepaid expenses 5,000
----------- -----------
Total Current Assets 475,740 894,358
Property and Equipment
Equipment used in research 21,473 4,208
Less allowance for depreciation ( 2,989) ( 421)
----------- -----------
18,484 3,787
Other assets, net of accumulated amortization
of $2,250 and $750 in 1994 and 1993
respectively. 12,750 14,250
----------- -----------
TOTAL ASSETS $ 506,974 $ 912,395
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 122,918 $ 9,176
Payroll taxes payable 1,784
----------- -----------
Total Current Liabilities 124,702 9,176
SHAREHOLDERS' EQUITY
Series A,Preferred stock, $.001 par value:
Authorized shares- 1,000,000 shares
Issued and outstanding- 1,000,000 shares 1,000 1,000
Additional paid-in-capital 979,000 979,000
Common stock, $.001 par value:
Authorized shares- 2,000,000 shares
(1,000,000 shares at December 31, 1993)
Issued and outstanding- 283,000 shares 283 283
Deficit accumulated during development stage ( 598,011) ( 77,064)
----------- -----------
382,272 903,219
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 506,974 $ 912,395
=========== ===========
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
THEROX PHARMACEUTICALS, INC.
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS
Year Ended December 31, 1994 and for the
Period from July 1, 1993 (Date of Inception)
to December 31, 1993
<TABLE>
<CAPTION>
Cumulative
December 31, from
1994 1993 July 1,1993
----------- ----------- -----------
<S> <C> <C> <C>
Research and development expenses $ 526,039 $ 66,046 $ 592,085
General and administrative expenses 10,530 14,353 24,883
----------- ----------- -----------
Total expenses 536,569 80,399 616,968
Other income (expense):
Interest income 15,622 3,335 18,957
----------- ----------- -----------
Net loss $ 520,947 $ 77,064 $ 598,011
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
THEROX PHARMACEUTICALS, INC.
(A Development Stage Enterprise)
STATEMENT OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Series A
Preferred Stock Common Stock Deficit
---------------------- ---------------------- Accumulated
Number Number during Additional
of of Development Paid-In
Shares Amount Shares Amount Stage Capital Total
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance July 1, 1993 --- $ --- --- $ --- $ --- $ --- $ ---
Issuance of Series A preferred stock,
net of expense 1,000,000 1,000 979,000 980,000
Issuance of common stock 283,000 283 283
Net loss ( 77,064) ( 77,064)
---------- ---------- ---------- ---------- ----------- ---------- -----------
Balance December 31, 1993 1,000,000 1,000 283,000 283 ( 77,064) 979,000 903,219
Net loss ( 520,947) (520,947)
---------- ---------- ---------- ---------- ----------- ---------- -----------
Balance December 31, 1994 1,000,000 $ 1,000 283,000 $ 283 $ (598,011) $ 979,000 $ 382,272
========== ========== ========== ========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
THEROX PHARMACEUTICALS, INC.
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
Year Ended December 31, 1994 and for the
Period from July 1, 1993 (Date of Inception)
to December 31, 1993
<TABLE>
<CAPTION>
Cumulative
December 31, from
1994 1993 July 1,1993
----------- ----------- -----------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss $ ( 520,947)$ ( 77,064)$ ( 598,011)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Depreciation 2,568 421 2,989
Amortization 1,500 750 2,250
(Increase) decrease in:
Prepaid expenses ( 5,000) ( 5,000)
Increase (decrease) in:
Accounts payable 113,742 9,176 122,918
Payroll taxes payable 1,784 1,784
----------- ----------- -----------
NET CASH USED BY
OPERATING ACTIVITIES ( 406,353) ( 66,717) ( 473,070)
INVESTING ACTIVITIES
Purchase of equipment
used in research ( 17,265) ( 4,208) ( 21,473)
Purchase of intangibles ( 15,000) ( 15,000)
----------- ----------- -----------
NET CASH (USED) BY
INVESTING ACTIVITIES ( 17,265) ( 19,208) ( 36,473)
FINANCING ACTIVITIES
Proceeds from issuance of
stock, net of expense 0 980,283 980,283
----------- ----------- -----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 0 980,283 980,283
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH ( 423,618) 894,358 470,740
Cash at beginning of year 894,358 0 0
----------- ----------- -----------
CASH AT END OF YEAR $ 470,740 $ 894,358 $ 470,740
=========== =========== ===========
Cash paid for interest $ 0 $ 0 $ 0
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
THEROX PHARMACEUTICALS, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
December 31, 1994 and 1993
NOTE A--SIGNIFICANT ACCOUNTING POLICIES
Background
Therox Pharmaceutical, Inc. (formerly Anti-Ox, Inc.), (the Company), is a
development stage enterprise formed in July 1993 for the purpose of conducting
research and development of new pharmaceutical technology. Upon the discovery of
any new technology, the Company will develop and market the related products.
The Company conducts its research primarily through consultants in conjunction
with several universities under research agreements that permit the Company to
either retain ownership or licensing rights for any discoveries. Accounts
payable include $118,540 of amounts owed under these agreements for research
performed prior to December 31, 1994. The Company is obligated to fund up to an
additional $147,500 under terms of certain research agreements that expire
August 31, 1995. Amounts are subject to completion of the agreed upon research
by the respective university.
The Company has operated as a development stage enterprise since its inception
and has not recognized any operating revenues.
Property and Equipment
Property and equipment are stated at cost. Depreciation is computed using
straight line methods over the estimated useful lives of the assets (five
years).
Other Assets
Other assets consist of amounts paid for a licensing agreement for patented
items. Amortization is computed using the straight line method over the
remaining lives of the patents, (approximately ten to seventeen years).
Employee Benefit Plan
The Company does not sponsor any qualified employee benefit plans or post
employment benefit plans.
NOTE B--CAPITALIZATION
In December 1993 the Company issued 1,000,000 shares of Series A preferred stock
for net consideration of $980,000. Series A preferred stock are convertible to
common, have voting rights and liquidation preferences over common stock, and
has a dividend rate of $.08. Dividends are cumulative, begin to accrue in
December of 1995 and are payable in preferred stock.
In December 1993 the Company issued 283,000 shares of common stock for a
consideration of $283. The Company has reserved 525,000 shares of common stock
for issuance under stock options and 1,000,000 shares for conversion of
preferred stock.
11
<PAGE>
THEROX PHARMACEUTICALS, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
December 31, 1994 and 1993
NOTE C--STOCK OPTION PLAN AND STOCK OPTION AGREEMENT
In 1994, the Company reserved 500,000 shares of common stock for issuance
pursuant to its stock option plan. The Company has granted options to purchase
common stock to certain employees, directors and consultants. As of December 31,
1994 options were granted to purchase 100,000 shares of common stock at $.10 per
share (no options were granted in 1993). No options were exercised in 1994 or
1993.
In February 1994, the Company granted options to purchase 25,000 shares of
common stock to a preferred shareholder, Brantley Venture Partners II, L.P., at
$.01 per share. No options were exercised as of December 31, 1994 under this
agreement.
NOTE D--INCOME TAXES
At December 31, 1994, the Company had net operating loss carryforwards available
to offset future taxable income of approximately $598,011, which expire in the
years 2008 and 2009.
Net operating loss carryforwards for financial reporting purposes and
alternative minimum tax reporting purposes are approximately the same as those
under the regular tax method. Net operating losses may be subject to certain tax
law restrictions in the event of a change in ownership, as defined. The amount
of this restriction, if any, has not been determined.
Deferred income taxes reflect the temporary differences between the carrying
values of assets and liabilities for financial reporting purposes and the
amounts for income tax purposes. The significant components of the Company's
deferred tax assets and liabilities as of December 31, 1994 and 1993 are as
follows:
<TABLE>
<CAPTION>
1994 1993
----------- -----------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards $ 203,000 $ 22,000
Valuation allowance ( 203,000) ( 22,000)
----------- -----------
$ --- $ ---
=========== ===========
</TABLE>
No income taxes were paid in 1994 and 1993.
NOTE E--RELATED PARTY TRANSACTIONS
The president of the Company is also a general partner in Brantley Venture
Partners II, L.P., a principal investor in Series A convertible preferred stock.
The president received no compensation in 1994 and 1993.
12
<PAGE>
THEROX PHARMACEUTICALS, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
December 31, 1994 and 1993
NOTE F--LEASES
The Company incurred lease expense of $1,565 in 1994 and had no lease expense in
1993. The Company has future minimum lease commitments of $2,292 in 1996 and
1997, and $1,337 in 1998.
NOTE G--SUBSEQUENT EVENTS
The Company has signed a letter of intent with OXIS International, Inc. (OXIS),
whereby OXIS would acquire all of the issued and outstanding stock of the
Company in exchange for 1,440,736 shares of OXIS common stock and other
considerations.
The Company's option holders are permitted to either convert their options to
Company common stock and then exchange the stock for OXIS stock, or exchange the
options for OXIS options.
Subsequent to December 31, 1994, the Company agreed to grant options to purchase
an additional 33,000 shares of common stock at $.10 per share. The Company also
agreed to issue 53,000 shares of common stock as compensation under consulting
and license agreements.
On May 15, 1995 the Company entered into a three year lease agreement (with an
option for an additional year) for laboratory and office space. Rent under the
agreement is $90,000 in the first year, $114,000 in the second year, and
$138,000 in the third year. Concurrent with the lease agreement, the Company
entered into an agreement for services with the landlord for various telephone,
computer, laboratory and waste disposal services. Costs for these services is
calculated on a usage and number of employee basis.
The Company has made arrangements for a $50,000 loan from a principal investor
in Series A convertible preferred stock, S.R. One, Limited, that will be
convertible into approximately 16,250 shares of newly issued Series B
convertible preferred stock at $2.95 per share.
13
<PAGE>
EXHIBIT 99(2)
THEROX PHARMACEUTICALS, INC.
(A Development Stage Enterprise)
Balance Sheet (Unaudited)
March 31, 1995
<TABLE>
<S> <C>
ASSETS
Current assets
Cash $343,806
Prepaid expenses --
--------
Total current assets 343,806
Property and equipment
Equipment used in research 21,473
Less allowance for depreciation (4,063)
--------
17,410
Other assets, net of accumulated amortization of $2,625 12,375
--------
Total assets $373,591
========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 166,985
Accrued payroll and payroll taxes 3,940
---------
Total current liabilities 170,925
Shareholders' equity
Series A, Preferred stock, $.001 par value:
Authorized shares - 1,000,000 shares
Issues and outstanding - 1,000,000 shares 1,000
Additional paid-in-capital 979,000
Common stock, $.001 par value:
Authorized shares - 2,000,000 shares
Issued and outstanding - 283,000 shares 283
Deficit accumulated during development stage (777,617)
---------
202,666
---------
Total liabilities and shareholders' equity $ 373,591
=========
</TABLE>
14
<PAGE>
THEROX PHARMACEUTICALS, INC.
(A Development Stage Enterprise)
Statement of Operations (Unaudited)
Period Ended March 31, 1995 and for the Period from
July 1, 1993 (date of inception) to March 31, 1995
<TABLE>
<CAPTION>
Cumulative
March 31, from
1995 July 1, 1993
--------- ------------
<S> <C> <C>
Research and development expenses $176,722 $768,807
General and administrative expense 5,468 30,351
-------- --------
Total expenses 182,190 799,158
Other income (expense)
Interest income 2,584 21,541
-------- --------
Net loss $179,606 $777,617
======== ========
</TABLE>
15
<PAGE>
THEROX PHARMACEUTICALS, INC.
(A Development Stage Enterprise)
Statement of Shareholders' Equity (Unaudited)
<TABLE>
<CAPTION>
Deficit
Accumulated
Series A During Additional
Preferred Common Development Paid-In
Stock Stock Stage Capital Total
--------- ------ ----------- ---------- -----
<S> <C> <C> <C> <C> <C>
Balance July 1, 1993 $ -- $ -- $ -- $ -- $ --
Issuance of 1,000,000 shares
Series A Preferred Stock,
net of expense 1,000 -- 979,000 980,000
Issuance of 283,000 shares 283 283
Net loss (77,064) (77,064)
------ ---- --------- -------- ---------
Balance December 31, 1993 1,000 283 (77,064) 979,000 903,219
Net loss (520,947) (520,947)
------ ---- --------- -------- ---------
Balance December 31, 1994 1,000 283 (598,011) 979,000 382,272
Net loss (179,606) (179,606)
------ ---- --------- -------- ---------
Balance March 31, 1995 $1,000 $283 $(777,617) $979,000 $ 202,666
====== ==== ========= ======== =========
</TABLE>
16
<PAGE>
THEROX PHARMACEUTICALS, INC.
(A Development Stage Enterprise)
Statement of Cash Flows (Unaudited)
Period Ended March 31, 1995 and for the Period from
July 1, 1993 (date of inception) to March 31, 1995
<TABLE>
<CAPTION>
Cumulative
March 31, from
1995 July 1, 1993
---------- -------------
<S> <C> <C>
Operating activities
Net loss $(179,606) $(777,617)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation 1,074 4,063
Amortization 375 2,625
(Increase) decrease in prepaid expenses 5,000 --
Increase (decrease) in:
Accounts payable 44,067 166,985
Accrued payroll and taxes 2,156 3,940
--------- ---------
Net cash used by operating activities (126,934) (600,004)
Investing activities
Purchase of equipment used in research -- (21,473)
Purchase of intangibles -- (15,000)
--------- ---------
Net cash (used) by investing activities -- (36,473)
Financing activities
Proceeds from issuance of stock,
net of expense -- 980,283
--------- ---------
Net cash provided by financing activities -- 980,283
--------- ---------
Net increase (decrease) in cash (126,934) 343,806
Cash at beginning of period 470,740 --
--------- ---------
Cash at March 31, 1995 $ 343,806 $ 343,806
========= =========
Cash paid for interest -- --
========= =========
</TABLE>
17
<PAGE>
CONDENSED NOTE TO FINANCIAL STATEMENTS
The unaudited financial statements do not include all of the information and
notes required by generally accepted accounting principles for complete
financial statements. All adjustments considered necessary by management for a
fair presentation have been included. Operating results for interim periods are
not necessarily indicative of the results that may be expected for the full
year.
18
<PAGE>
EXHIBIT 99(3)
OXIS International, Inc. and Therox Pharmaceuticals, Inc.
Unaudited Pro Forma Financial Information
On July 19, 1995, OXIS International, Inc. ("OXIS") consummated the acquisition
of Therox pursuant to a transaction wherein Therox was merged with and into a
wholly-owned subsidiary of OXIS. The unaudited pro forma financial information
presented below combines the balance sheets of OXIS and Therox as of December
31, 1994 and March 31, 1995 and the statements of operations for the year ended
December 31, 1994, and the three months ended March 31, 1995 on a pro forma
basis. This pro forma combination gives effect to the following assumptions.
. That the acquisition of Therox by OXIS occurred as of the beginning of each of
the periods presented.
. That the Therox acquisition would be accounted for as a purchase.
. That the purchase price paid by OXIS to acquire Therox will be $3,353,313,
consisting of 1,440,736 shares of OXIS Common Stock valued at 2.3275 per
share. This valuation is based on the average of the closing price of OXIS
Common Stock from July 14, 1995 through July 20, 1995, the day after the
consummation of the acquisition, discounted 30% for certain trading
restrictions and the number of shares of OXIS Common Stock being issued in the
transaction, as compared to the average trading volume of OXIS Common Stock.
. That holders of Therox stock options would exercise their options, resulting
in additional equity for Therox of $68,850, prior to the acquisition.
. That, simultaneous to the acquisition, the two major Therox shareholders would
purchase 642,583 shares of OXIS Series B Preferred Stock for an aggregate
purchase price of $1,500,000.
. That the excess of the purchase price paid over the shareholders' equity of
Therox would be allocated entirely to technology for in-process products and
charged to expense in the first statement of operations for the combined
companies.
It should be noted that the unaudited pro forma financial information:
. does not give effect to any costs of combining the companies or to any
efficiencies in operations that could be achieved by combining the companies,
. does not purport to be indicative either of the results of operations that
would have occurred had the acquisition been consummated at the date
indicated, or of future combined results of operations of the companies.
19
<PAGE>
The unaudited pro forma financial information presented below should be read in
conjunction with the notes hereto and the separate financial statements of the
two companies. Unaudited financial statements of the Company as of June 30,
1995 are included in the Company's second quarter Form 10-Q report filed with
the Securities and Exchange Commission. Financial statements of Therox as of
December 31, 1994 and March 31, 1995 are included in this report on Form 8-K/A.
20
<PAGE>
Unaudited Pro Forma Balance Sheet of
OXIS International, Inc.
(OXIS International, Inc., and Therox Pharmaceuticals, Inc.)
Combined as of December 31, 1994
<TABLE>
<CAPTION>
Pro forma Pro forma
ASSETS OXIS Therox adjustments combined
---- ------ ----------- ---------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 936,000 $471,000 $ 69,000 (1) $ 2,976,000
1,500,000 (4)
Certificates of deposit 496,000 496,000
Accounts receivable 740,000 740,000
Inventories 673,000 673,000
Prepaid and other 228,000 5,000 233,000
----------- -------- ----------- -----------
Total current assets 3,073,000 476,000 1,569,000 5,118,000
Property and equipment, net 1,298,000 18,000 1,316,000
Assets under capital leases, net 1,340,000 1,340,000
Technology for in-process products 2,902,000 (2) 0
(2,902,000) (3)
Technology for developed products and
custom assays, net 5,215,000 5,215,000
Other assets 268,000 13,000 281,000
----------- -------- ----------- -----------
Total assets $11,194,000 $507,000 $ 1,569,000 $13,270,000
=========== ======== =========== ===========
</TABLE>
21
<PAGE>
Unaudited Pro Forma Balance Sheet of
OXIS International, Inc.
(OXIS International, Inc., and Therox Pharmaceuticals, Inc.)
Combined as of December 31, 1994
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Pro forma Pro forma
OXIS Therox adjustments combined
---- ------ ----------- ---------
<S> <C> <C> <C> <C>
Current liabilities:
Note payable to bank $ 340,000 $ 340,000
Accounts payable 1,562,000 $ 123,000 1,685,000
Customer deposits 1,116,000 1,116,000
Accrued liabilities 628,000 2,000 $ 133,000 (5) 763,000
Current portion of capital lease obligations 473,000 473,000
----------- --------- ----------- ------------
Total current liabilities 4,119,000 125,000 133,000 4,377,000
Capital lease obligations 297,000 297,000
Other liabilities 79,000 79,000
Shareholders' equity:
Preferred stock:
OXIS 0 6,000 (4) 6,000
Therox 1,000 (1,000) (2) 0
Common stock:
OXIS 4,661,000 720,000 (2) 5,381,000
Therox 0
Additional paid-in capital:
OXIS 20,230,000 2,633,000 (2) 24,224,000
1,494,000 (4)
(133,000) (5)
Therox 979,000 69,000 (1) 0
(1,048,000) (2)
Accumulated deficit:
OXIS (18,139,000) (2,902,000) (3) (21,041,000)
Therox (598,000) 598,000 (2) 0
Accumulated translation adjustments (53,000) (53,000)
----------- --------- ----------- ------------
Total shareholders' equity 6,699,000 382,000 1,436,000 8,517,000
----------- --------- ----------- ------------
Total liabilities and shareholders'
equity $11,194,000 $ 507,000 $ 1,569,000 $ 13,270,000
=========== ========= =========== ============
</TABLE>
22
<PAGE>
Notes to Unaudited Pro Forma Balance Sheet
December 31, 1994
1. To reflect cash paid for exercise of Therox stock options prior to the
acquisition of Therox by OXIS.
2. To reflect the pro forma purchase price, $3,353,313, paid to acquire Therox,
consisting of 1,440,736 shares of OXIS Common Stock at $2.3275 per share.
This valuation is based on the average of the closing price of OXIS Common
Stock from July 14, 1995 through July 20, 1995, the day after the
consummation of the acquisition, discounted 30% for certain trading
restrictions and the number of shares of OXIS Common Stock being issued in
the transaction, as compared to the average trading volume of OXIS Common
Stock. The excess of the pro forma purchase price over the shareholders'
equity of Therox has been allocated entirely to technology for in-process
products.
Stock issued in connection with the acquisition has been recorded in
shareholders' equity as follows:
<TABLE>
<S> <C>
Common Stock, 1,440,736 shares at $.50 par $ 720,000
Additional paid-in capital 2,633,000
----------
Stock issued - 1,440,736 shares at $2.3275 per share $3,353,000
==========
</TABLE>
3. The amount allocated to technology on in-process products will be charged to
expense in the first statement of operations for the combined companies
inasmuch as these amounts relate to research and development for which there
is no alternative future use. Consequently, the unaudited pro forma balance
sheet has been prepared to present the total assets and shareholders' equity
immediately following this write off.
4. To reflect $1,500,000 cash paid by the two major Therox shareholders for
642,583 shares of OXIS Series B Preferred Stock. The Series B preferred
Stock is presented as:
<TABLE>
<S> <C>
642,583 shares at .01 par $ 6,000
Additional paid in capital 1,494,000
----------
Cash paid $1,500,000
==========
</TABLE>
5. To reflect a liability for costs directly attributable to issuance of stock.
6. In addition to the OXIS shares issued, the stockholders of Therox may receive
up to $2,000,000 based on the successful commercialization of the Therox
technologies. No effect has been given in the pro forma balance sheet for
this matter.
23
<PAGE>
Unaudited Pro Forma Statement of Operations
OXIS International, Inc.
(OXIS International, Inc., and Therox Pharmaceuticals, Inc.)
Combined for the year ended December 31, 1994
<TABLE>
<CAPTION>
Pro forma Pro forma
OXIS Therox adjustments combined
---- ------ ----------- ---------
<S> <C> <C> <C> <C>
Revenues:
Sales $ 3,325,000 $ 3,325,000
Royalties 145,000 145,000
------------ ---------- ----------- ------------
Total revenues 3,470,000 0 3,470,000
Costs and expenses:
Cost of sales 2,074,000 2,074,000
Research and development 1,670,000 $ 526,000 2,196,000
Sales, general and administrative 1,652,000 11,000 1,663,000
Purchased in-process technology 3,675,000 3,675,000
------------ ---------- ----------- ------------
Total costs and expenses 9,071,000 537,000 0 9,608,000
------------ ---------- ----------- ------------
Operating loss (5,601,000) (537,000) 0 (6,138,000)
Interest income 82,000 16,000 98,000
Interest expense (48,000) (48,000)
------------ ---------- ----------- ------------
Net loss ($5,567,000) ($521,000) $0 ($6,088,000)
============ ========== =========== ============
Net loss per OXIS share ($0.88) ($0.50)
============ ============
</TABLE>
24
<PAGE>
Notes to Unaudited Pro Forma Statement of Operations
for the Year Ended December 31, 1994
1. The write off of the pro forma purchase price amount allocated to technology
on in-process products is not reflected in the unaudited pro forma statement
of operations. This amount relates to research and development in process
for which there is no alternative future use and is expected to approximate
$2,902,000. This amount will be written off in the initial period of
operations of the combined companies.
2. Net loss per OXIS share in the unaudited pro forma statement of operations
has been computed based upon 12,124,423 Common Shares outstanding upon
consummation of the acquisition.
25
<PAGE>
Unaudited Pro Forma Balance Sheet of
OXIS International, Inc.
(OXIS International, Inc., and Therox Pharmaceuticals, Inc.)
Combined as of March 31, 1995
<TABLE>
<CAPTION>
Pro forma Pro forma
ASSETS OXIS Therox adjustments combined
---- ------ ----------- ---------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 724,000 $344,000 $ 69,000 (1) $ 2,637,000
1,500,000 (4)
Certificates of deposit 198,000 198,000
Accounts receivable 1,002,000 1,002,000
Inventories 653,000 653,000
Prepaid and other 313,000 313,000
----------- -------- ----------- -----------
Total current assets 2,890,000 344,000 1,569,000 4,803,000
Property and equipment, net 1,286,000 18,000 1,304,000
Assets under capital leases, net 1,422,000 1,422,000
Technology for in-process products 3,081,000 (2) 0
(3,081,000) (3)
Technology for developed products and
custom assays, net 5,189,000 5,189,000
Other assets 300,000 12,000 312,000
----------- -------- ----------- -----------
Total assets $11,087,000 $374,000 $ 1,569,000 $13,030,000
=========== ======== =========== ===========
</TABLE>
26
<PAGE>
Unaudited Pro Forma Balance Sheet of
OXIS International, Inc.
(OXIS International, Inc., and Therox Pharmaceuticals, Inc.)
Combined as of March 31, 1995
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Pro forma Pro forma
OXIS Therox adjustments combined
---- ------ ----------- ---------
<S> <C> <C> <C> <C>
Current liabilities:
Note payable to bank $ 198,000 $ 198,000
Other notes payable 766,000 766,000
Accounts payable 2,066,000 $ 167,000 2,233,000
Customer deposits 250,000 250,000
Accrued liabilities 661,000 4,000 $ 133,000 (5) 798,000
Current portion of capital lease
obligations 431,000 431,000
------------ -------- ----------- ------------
Total current liabilities 4,372,000 171,000 133,000 4,676,000
Capital lease obligations 267,000 267,000
Other liabilities 76,000 76,000
Shareholders' equity:
Preferred stock:
OXIS 6,000 (4) 6,000
Therox 1,000 (1,000) (2) 0
Common stock:
OXIS 4,708,000 720,000 (2) 5,428,000
Therox 0
Additional paid-in capital:
OXIS 20,338,000 2,633,000 (2) 24,332,000
1,494,000 (4)
(133,000) (5)
Therox 979,000 69,000 (1) 0
(1,048,000) (2)
Accumulated deficit:
OXIS (18,896,000) (3,081,000) (3) (21,977,000)
Therox (777,000) 777,000 (2) 0
Accumulated translation adjustments 222,000 222,000
------------ -------- ----------- ------------
Total shareholders' equity 6,372,000 203,000 1,436,000 8,011,000
------------ -------- ----------- ------------
Total liabilities and
shareholders' equity $ 11,087,000 $374,000 $ 1,569,000 $ 13,030,000
============ ======== =========== ============
</TABLE>
27
<PAGE>
Notes to Unaudited Pro Forma Balance Sheet
March 31, 1995
1. To reflect cash paid for exercise of Therox stock options prior to the
acquisition of Therox by OXIS.
2. To reflect the pro forma purchase price, $3,353,313, paid to acquire Therox,
consisting of 1,440,736 shares of OXIS Common Stock at $2.3275 per share.
This valuation is based on the average of the closing price of OXIS Common
Stock from July 14, 1995 through July 20, 1995, the day after the
consummation of the acquisition, discounted 30% for certain trading
restrictions and the number of shares of OXIS Common Stock being issued in
the transaction, as compared to the average trading volume of OXIS Common
Stock. The excess of the pro forma purchase price over the shareholders'
equity of Therox has been allocated entirely to technology for in-process
products.
Stock issued in connection with the acquisition has been recorded in
shareholders' equity as follows:
<TABLE>
<S> <C>
Common Stock, 1,440,736 shares at $.50 par $ 720,000
Additional paid-in capital 2,633,000
----------
Stock issued - 1,440,736 shares at $2.3275 per share $3,353,000
==========
</TABLE>
3. The amount allocated to technology on in-process products will be charged to
expense in the first statement of operations for the combined companies
inasmuch as these amounts relate to research and development for which there
is no alternative future use. Consequently, the unaudited pro forma balance
sheet has been prepared to present the total assets and shareholders' equity
immediately following this write off.
4. To reflect $1,500,000 cash paid by the two major Therox shareholders for
642,583 shares of OXIS Series B Preferred Stock. The Series B preferred
Stock is presented as:
<TABLE>
<S> <C>
642,583 shares at .01 par $ 6,000
Additional paid in capital 1,494,000
----------
Cash paid $1,500,000
==========
</TABLE>
5. To reflect a liability for costs directly attributable to issuance of stock.
6. In addition to the OXIS shares issued, the stockholders of Therox may receive
up to $2,000,000 based on the successful commercialization of the Therox
technologies. No effect has been given in the pro forma balance sheet for
this matter.
28
<PAGE>
Unaudited Pro Forma Statement of Operations
OXIS International, Inc.
(OXIS International, Inc., and Therox Pharmaceuticals, Inc.)
Combined for the three months ended March 31, 1995
<TABLE>
<CAPTION>
Pro forma Pro forma
OXIS Therox adjustments combined
---- ------ ----------- ---------
<S> <C> <C> <C> <C>
Revenues:
Sales $2,075,000 $2,075,000
Royalties 51,000 51,000
---------- ---------- ----------- ----------
Total revenues 2,126,000 2,126,000
Costs and expenses:
Cost of sales 1,177,000 1,177,000
Research and development 1,029,000 $ 177,000 1,206,000
Sales, general and administrative 645,000 5,000 650,000
Purchased in-process technology 0
---------- ---------- ----------- ----------
Total costs and expenses 2,851,000 182,000 3,033,000
---------- ---------- ----------- ----------
Operating loss (725,000) (182,000) (907,000)
Interest income 6,000 2,000 8,000
Interest expense (38,000) (38,000)
---------- ---------- ----------- ----------
Net loss ($757,000) ($180,000) $0 ($937,000)
========== ========== =========== ==========
Net loss per OXIS share ($0.08) ($0.08)
========== ==========
</TABLE>
29
<PAGE>
Notes to Unaudited Pro Forma Statement of Operations
for the Three Months Ended March 31, 1995
1. The write off of the pro forma purchase price amount allocated to technology
on in-process products is not reflected in the unaudited pro forma statement
of operations. This amount relates to research and development in process
for which there is no alternative future use and is expected to approximate
$3,081,000. This amount will be written off in the initial period of
operations of the combined companies.
2. Net loss per OXIS share in the unaudited pro forma statement of operations
has been computed based upon 12,124,423 Common Shares outstanding upon
consummation of the acquisition.
30
