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As filed with the Securities and Exchange Commission on July 17, 1995.
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
OXIS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-1620407
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification Number)
---------------
6040 N. Cutter Circle, Suite 317
Portland, Oregon 97217-3935
(503) 283-3911
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
---------------
Ray R. Rogers
Chairman of the Board
OXIS International, Inc.
6040 N. Cutter Circle, Suite 317
Portland, Oregon 97217-3935
(503) 283-3911
(Name, address, including zip code and telephone number, including area code of
agent for service)
---------------
Copies to:
Richard Scudellari, Esq.
Jackson, Tufts, Cole & Black
60 South Market Street
San Jose, California 95113
(408) 998-1952
---------------
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans please check the following
box. [_]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [X]
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Amount of
to be Registered Registered Per Share (1) Offering Price (1) Registration Fee
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock $.50 par
value . . . . . . . 5,075,073 (2) $3.00 $15,225,219 $5,250
====================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457 based on the average of the bid and
asked prices for the Common Stock, as reported by prices on the Nasdaq
National Market on July 11, 1995.
(2) Includes 472,763 shares issuable upon the exercise of warrants and 128,918
shares issuable upon the exercise of stock options
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion, dated July 17, 1995
PROSPECTUS
OXIS INTERNATIONAL, INC.
5,075,073 Shares
Common Stock
----------------
This Prospectus relates to 5,075,073 shares of Common Stock, par value
$.50 (the "Common Stock"), of OXIS International, Inc. ("OXIS" or the "Company")
which are being offered and sold by certain stockholders of the Company (the
"Selling Stockholders"). The Selling Stockholders, directly or through agents,
broker-dealers or underwriters, may sell the Common Stock offered hereby from
time to time on terms to be determined at the time of sale, in transactions on
the Nasdaq National Market or in privately negotiated transactions. The Selling
Stockholders and any agents, broker-dealers or underwriters that participate in
the distribution of the Common Stock may be deemed to be "underwriters" within
the meaning of the Securities Act of 1933, as amended (the "Act"), and any
commission received by them and any profit on the resale of the Common Stock
purchased by them may be deemed to be underwriting discounts or commissions
under the Act. See "Selling Stockholders" and "Plan of Distribution." The
Company will not receive any proceeds from the sale of shares by the Selling
Stockholders.
The Common Stock of the Company is quoted on the Nasdaq National
Market under the symbol "OXIS." The last reported sales price of the Company's
Common Stock on the Nasdaq National Market on July 11, 1995 was $3.00 per share.
----------------
THE SHARES OF COMMON STOCK OFFERED HEREBY INVOLVE
A HIGH DEGREE OF RISK. SEE "RISK FACTORS."
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
No underwriting commissions or discounts will be paid by the Company
in connection with this offering. Estimated expenses payable by the Company in
connection with this offering are $52,000. See "Plan of Distribution." The
aggregate proceeds to the Selling Stockholders from the Common Stock will be
the purchase price of the Common Stock sold less the aggregate agents'
commissions and underwriters' discounts, if any.
The Company has agreed to indemnify the Selling Stockholders and
certain other persons against certain liabilities, including liabilities under
the Act.
The date of this Prospectus is July ___, 1995
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AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files annual and quarterly reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information may be inspected and copied at
the Commission's Regional Offices at 7 World Trade Center, 13th Floor, New York,
New York 10048; and 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such material can be obtained at prescribed rates from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Common Stock of the Company is quoted on the Nasdaq
National Market. Reports and other information concerning the Company may be
inspected at the National Association of Securities Dealers, Inc. at 1735 K
Street, N.W., Washington, D.C. 20006.
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus, and, if given or made, such other information or representations
must not be relied upon as having been authorized by the Company. This
Prospectus does not constitute an offer or solicitation by anyone in any state
in which such offer or solicitation is not authorized, or in which the person
making such offer or solicitation is not qualified to do so, or to any person
to whom it is unlawful to make such offer or solicitation. The delivery of this
Prospectus at any time does not imply that information herein is correct as of
any time subsequent to the date hereof.
ADDITIONAL INFORMATION
A registration statement on Form S-3 with respect to the Common Stock
offered hereby (the "Registration Statement") has been filed with the Commission
under the Act. This Prospectus does not contain all of the information contained
in such Registration Statement and the exhibits and schedules thereto, certain
portions of which have been omitted pursuant to the rules and regulations of
the Commission. For further information with respect to the Company and the
Common Stock offered hereby, reference is made to the Registration Statement and
the exhibits and schedules thereto. Statements contained in this Prospectus
regarding the contents of any contract or any other document are not necessarily
complete and, in each instance, reference is hereby made to the copy of such
contract or document filed as an exhibit to the Registration Statement. The
Registration Statement, including exhibits thereto, may be inspected without
charge at the Commission's principal office in Washington, D.C., and copies of
all or any part thereof may be obtained from the Public Reference Section,
Securities and Exchange Commission, Washington, D.C., 20549, upon payment of the
prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed or to be filed with the Commission
under the Exchange Act are hereby incorporated by reference into this
Prospectus:
(i) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994, including all material incorporated by
reference therein.
(ii) The Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1995.
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(iii) The Company's Report on Form 10-C filed on May 24, 1995.
(iv) The Company's Current Report on Form 8-K as filed on May 24,
1995.
(v) The description of the Registrant's Common Stock contained in
the Company's Prospectus dated June 18, 1969 (File No.
0361150) filed pursuant to Section 12 of the Exchange Act on
June 23, 1969.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14, or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing of such documents. Any
statement contained in this Prospectus or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently-filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the documents that have been
incorporated by reference herein (not including exhibits to such documents
unless such exhibits are specifically incorporated by reference herein or into
such documents). Such request may be directed to OXIS International, Inc., 6040
N. Cutter Circle, Suite 317, Portland, OR 97217-3935, telephone (503) 283-3911,
Attn: Jon S. Pitcher, Chief Financial Officer.
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<PAGE>
THE COMPANY
The Company was initially incorporated in 1965 as Diagnostic Data,
Inc., a California corporation. It was reincorporated in Delaware in 1974, and
adopted the name DDI Pharmaceuticals, Inc. in 1985. In September, 1994, the
Company acquired Bioxytech S.A., based in France ("Bioxytech"), and merged with
International BioClinical, Inc. ("IBC"), an Oregon corporation (the
"Combination"), and changed its name to OXIS International, Inc. Bioxytech was
acquired through an exchange of shares that resulted in the Company owning in
excess of 99% of the outstanding stock of Bioxytech, which operates as a
subsidiary of the Company.
OXIS is engaged in the discovery, development, manufacture and
marketing of products to diagnose, treat and prevent the pathologic effects of
free radicals (i.e., diseases of oxidative stress). Free radicals are highly
reactive molecules that are damaging to cells when their concentration exceeds
the body's antioxidant defense capacity. Oxidative stress is now thought to be a
basic mechanism of cell damage and death in a number of acute and chronic
diseases such as atherosclerosis, AIDS, cancer, diabetes, arthritis and
traumatic injury. Concomitantly, advances in molecular biology are beginning to
clarify the mechanism(s) of cellular damage by free radicals and driving market
demand for new products to diagnose, treat and prevent diseases of oxidative
stress. The Company sells or has under development assays for markers of
oxidative stress and therapeutic drug monitoring ("TDM" ) assays. In addition,
the Company has programs in progress for developing two forms of the free
radical scavenging enzyme, superoxide dismutase ("SOD"), a number of synthetic
antioxidant molecules designed for targeting specific tissues, and a proprietary
high molecular weight poly (ethylene) glycol ("PEG") technology to enhance
desired pharmacological properties of SOD and other protein molecules. The
Company's staff consists of approximately 70 managers, scientists, technicians
and administrative personnel who are currently located at three sites.
The Company has entered into a non-binding letter of intent to acquire
Therox Pharmaceuticals, Inc., a Delaware corporation ("Therox"). Therox is a
Philadelphia-based free radical therapeutics company funded by S.R. One,
Limited, the venture capital subsidiary of SmithKline Beecham, and Brantley
Venture Partners II, L.P. If consummated, this transaction will bring OXIS
complementary technologies, seven patents, and corporate and university
partnerships in exchange for approximately 1,440,000 shares of OXIS Common
Stock. Former Therox shareholders may earn up to an additional $2,000,000 based
on the successful commercialization of the technologies. Pursuant to the terms
of the proposed transaction, S.R. One, Limited and Brantley Venture Partners
L.P., II will invest an additional $1,500,000 in cash for approximately 462,500
shares of OXIS Series B Preferred Stock. The holders of Series B Preferred Stock
shall be entitled to certain dividend and liquidation preferences and will have
the right to elect one member of the Company's board of directors. The
consummation of the transaction is subject to the approval of the boards of
directors of both OXIS and Therox and the entering into of final definitive
agreements. The Company anticipates that the acquisition of Therox will
consummate in mid-July 1995 and will be treated as a purchase for accounting
purposes. Upon the consummation of the acquisition of Therox, it will become a
wholly-owned subsidiary of OXIS.
The Company's principal executive offices are located at 6040 N.
Cutter Circle, Suite 317, Portland, OR 97217-3935. Research and development
operations of OXIS are located at 518 Logue Avenue, Mountain View, CA 94043; and
Z.A. des Petits Carreaux, 2 av. des Coquellcots, F 94385 Bonneull-Sur-Marne,
Cedex, France (outside of Paris).
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<PAGE>
RISK FACTORS
The following are the significant risk factors that should be
considered carefully in evaluating the Common Stock of OXIS. \
Need for Additional Financing.
In May 1995, the Company sold 1,227,625 shares of Common Stock in a
private placement to offshore investors for aggregate consideration of
$2,037,860. In conjunction with the proposed acquisition by the Company of
Therox, the Company expects certain affiliates of Therox to invest $1,500,000 in
a private placement of the Company's Series B Preferred Stock. Assuming
operation of the Company in accordance with its current business plan and the
investment by the Therox affiliates in the Company, OXIS' existing capital
resources should be sufficient for the Company to operate through 1996. However,
if the Therox transaction is not consummated, the Company's existing capital
resources would be sufficient for the Company to operate only through 1995.
The Company has engaged an investment banking firm on a best-efforts
basis to assist it in completing a private placement of equity securities. The
Company is seeking to raise up to $5,000,000 in such private placement. OXIS
cannot predict the timing or the probability of success of this effort, and no
assurances can be given that the Company will successfully raise the needed
capital. Assuming that the Company successfully completes its private placement
of equity securities, it is anticipated that further financing may be needed
within approximately 24 months to allow the Company to continue its planned
research and development programs and marketing of additional products. The
unavailability of financing could cause the Company to cease or curtail its
operations, and/or delay or prevent the development and marketing of the
Company's potential therapeutic products.
The Company also plans to conduct a follow-on public offering of its
Common Stock to provide the additional funds for clinical trials for its
oxidative stress assays, complete preclinical studies on synthetic antioxidants,
and initiate early clinical trials. There can be no assurances that the Company
will successfully complete such a follow-on offering, that the terms of any such
offering will be favorable to the Company, or that if such offering occurs that
funds generated thereby will be sufficient to complete the Company's
contemplated development programs.
Research and Development Stage Products.
Much of the Company's success depends on potential products which are
in research and development and no material revenues have been generated to date
from sales of these products. Although the Company currently markets and sells
commercial and research diagnostic assays, the Company must successfully
partner, develop, obtain regulatory approval for and market or sell its
potential therapeutic products to achieve profitable operations. The preclinical
and clinical development work for potential new therapeutic products is
presently in early research and development stages. No assurance can be given
that the Company's product development efforts will be successfully completed,
that required regulatory approvals will be obtained, or that any such products,
if developed and introduced, will be successfully marketed. If the Company does
not successfully introduce new products, its revenues and results of operations
will be materially adversely affected.
6
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Future Profitability Uncertain; Customer Dependency.
The Company expects to incur operating losses through 1996 and these
losses may increase and fluctuate from quarter to quarter as the Company
expands its development activities. There can be no assurance that the Company
will ever achieve profitable operations. The report of the Company's independent
auditors on the Company's financial statements for the period ended December 31,
1994 included an explanatory paragraph referring to the Company's ability to
continue as a going concern. The Company anticipates that it will expend
significant capital resources in product research and development. Capital
resources may also be used for the acquisition of complementary businesses,
products or technologies. OXIS' future capital requirements will depend on many
factors, including: continued scientific progress in its research and
development programs; the magnitude of these programs; success of preclinical
and clinical trials; scale-up costs of manufacturing; the time and costs
required for regulatory approvals; the time and costs involved in filing,
prosecuting, enforcing and defending patent claims; technological competition
and market developments; the establishment of and changes in collaborative
relationships; and the cost of commercialization activities and arrangements.
While the Company believes that its new products and technologies show
considerable promise, its ability to realize significant revenues therefrom is
dependent upon the Company's success in developing business alliances with
biotechnology and/or pharmaceutical companies to develop and market these
products. There is no assurance that the Company's effort to develop such
business alliances will be successful. The Company is pursuing one such
potential alliance with Sanofi Winthrop with respect to a therapeutic drug
("Sanofi Therapeutic") that Sanofi Winthrop is endeavoring to develop. In May
1995, Sanofi Winthrop loaned the Company $600,000 ("Sanofi Loan") which is due
and payable in May 1996 and pursuant to the terms of such loan the parties have
agreed to use good faith efforts to negotiate a license and supply agreement
concerning the Company's bovine SOD ("bSOD") technology and a license with
respect to the Company's recombinant human SOD technology. If Sanofi proceeds
with the development of the Sanofi Therapeutic, such an agreement would provide
that Sanofi would purchase bulk bSOD from the Company, or purchase or license
from the Company technology rights pertaining to the manufacture of bSOD. It is
important to note that the Company's ability to earn revenues associated with
the sale of bSOD to Sanofi Winthrop is based upon (i) the Sanofi Therapeutic
being successfully developed and receiving the requisite regulatory approvals,
(ii) Sanofi Winthrop successfully commercializing the Sanofi Therapeutic, and
(iii) the Company entering into a mutually satisfactory agreement with Sanofi
Winthrop for the supply of the Company's bSOD to Sanofi Winthrop or the
purchase or license from the Company of technology rights pertaining to the
manufacture of bSOD. Over the last several years the Company has sold a
substantial amount of bSOD to Sanofi Winthrop (35% of 1994 revenues). There can
be no assurances that such substantial sales will continue. Although Sanofi
Winthrop is currently conducting a second Phase III trial on its drug,
DISMUTEC(TM) (a coupled form of OXIS' bovine superoxide dismutase) to treat head
trauma, the Company cannot predict whether this trial will conclude
successfully. If such trial is not concluded successfully, the Company expects
that future sales of bSOD to Sanofi Winthrop would decrease substantially or
cease altogether.
Product Withdrawals in Europe.
The European market for OXIS' bSOD (orgotein) for human use has been
adversely impacted by a series of recent regulatory developments. During its
twelve years of commercial availability in Europe, more than two million
courses of orgotein treatment (representing more than
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twelve million injections) have been administered. Orgotein for injection as a
human pharmaceutical is currently produced by two different manufacturing
methods. The first method involves production in accordance with OXIS'
proprietary manufacturing process by Diosynth B.V. ("Diosynth"), using USDA
inspected bovine livers. This preparation of orgotein for injection has been
sold under the trade names Oxinorm(R) in Italy and Ontosein(R) in Spain. The
second method involves manufacturing the orgotein from bovine blood, rather than
bovine livers. The resultant product is manufactured and marketed under the
trade name Peroxinorm(R) by Grunenthal GmbH ("Grunenthal"). Company license
revenue from Grunenthal for 1994 comprised 9% of the Company's total revenues in
1994. The Company expects this percentage to decrease in 1995.
In January, 1994, the Italian government rendered a decision to
exclude all orgotein-containing products from the list of drugs eligible for
patient reimbursement. An appeal filed by OXIS' distributor of Oxinorm,
SmithKline Beecham Farmaceutici S.p.A. ("SmithKline Beecham"), was denied.
Subsequently, OXIS was informed that the Italian Health Ministry has withdrawn
the Marketing Authorization of all pharmaceutical products composed of orgotein,
including Oxinorm.
In addition, OXIS was notified in January, 1994 that the government of
Austria had asked Grunenthal to withdraw the Peroxinorm brand of orgotein from
the Austrian market. On March 25, 1994, as a result of two fatalities (December,
1993 and February, 1994) of patients treated with Peroxinorm, the German Federal
Health Administration asked Grunenthal to remove Peroxinorm from the German
market.
In addition, the Company's licensee for Spain has had informal
discussions with the Spanish regulatory authorities regarding the Company's
bSOD product. Although no action has been taken by those authorities with regard
to the Company's product, future sales in Spain may be adversely affected by
either regulatory action in Spain, or safety concerns stemming from actions in
other countries. In addition, Grunenthal, the Company's German licensee has
advised the Company that its Spanish subsidiary will be voluntarily withdrawing
its bSOD product from the Spanish market.
Failure to Protect Technology Could Adversely Affect Results.
The Company's success will depend in part on its proprietary products
and information. While OXIS has attempted to protect its proprietary products
and information through patents and trade secrets, there can be no assurance
that competitors will not be able to develop similar products and information
independently. No assurance can be given that any patents will be issued on any
of the Company's pending applications or that the claims allowed on any patents
held by the Company will be sufficiently broad to protect its products and
information. In addition, no assurance can be given that any patents issued to
the Company will not be challenged, invalidated or circumvented or that the
rights granted thereunder will provide competitive advantages to it.
In addition, the Company's products and its customers may be alleged
to have infringed third parties' patent rights. While such allegations are
commonplace in the industry and to date the Company has been able to license
necessary patents or technology on commercially reasonable terms, there can be
no assurance that the Company will be able to license necessary patents or
technology on commercially reasonable terms in the future. No assurances can be
given that the Company will prevail in any infringement litigation or that the
costs or damages from any such litigation would not materially and adversely
affect the Company.
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Substantially all of the Company's assets (including OXIS' technology)
serve as security with respect to the repayment of various loans, including the
Sanofi Loan. A default under these loans could result in the loss by the Company
of certain of these assets serving as collateral.
Government Regulation; Product Clearance and Approval Uncertain.
As with other companies in its industry, OXIS' preclinical
development, clinical trials, product manufacturing and marketing are subject to
state and federal regulation by the United States and other countries. Clinical
trials and product marketing and manufacturing are subject to the rigorous
review and approval processes of the United States Food and Drug Administration
("FDA") and foreign regulatory authorities. The process of obtaining FDA and
other required regulatory approvals is lengthy and expensive. Typically, this
requires the expenditure of substantial resources and takes several years or
more with respect to therapeutic products (diagnostic products typically take a
significantly shorter period of time), depending upon the type, complexity and
novelty of the product and the nature of the disease or other indication to be
treated. Preclinical studies must be conducted in conformance with the FDA's
Good Laboratory Practice regulations. Clinical testing must meet requirements
for Institutional Review Board ("IRB") oversight and informed consent by
clinical trial subjects, as well as FDA prior review, oversight and the FDA's
Good Clinical Practice requirements. Clinical trials may require large numbers
of test subjects. OXIS has limited experience in conducting clinical testing and
in pursuing applications necessary to gain regulatory approvals. Furthermore,
the Company or the FDA may suspend clinical trials at any time if either
believes that the subjects participating in such trials are being exposed to
unacceptable health risks, including undesirable or unintended side effects.
Before receiving FDA approval to market a product, OXIS may have to
demonstrate that the product represents an improved form of treatment compared
to existing therapies. Data obtained from preclinical and clinical activities
are susceptible to varying interpretations, which could delay, limit or prevent
regulatory approvals. In addition, delays or rejections may be encountered
based upon additional government regulation from future legislation or
administrative action or changes in FDA policy during the period of product
development, clinical trials and FDA regulatory review. Delays in obtaining such
approvals could adversely affect marketing of OXIS' products. Delays in
regulatory approvals that may be encountered by OXIS' joint development partners
and licensees could adversely affect OXIS' ability to receive royalties or other
sales revenues. There can be no assurance that, after such time and
expenditures, regulatory approval will be obtained for any products developed by
the Company. Even after initial FDA approval has been obtained, further studies
may be required to provide additional data on safety or to gain approval for
the use of a product as a treatment for clinical indications other than those
initially targeted. Moreover, the FDA may reconsider its approval of any
product at any time and may with draw such approval. In addition, before the
Company's products can be marketed in foreign countries, they are subject to
regulatory approval in such countries similar to that required in the United
States. Furthermore, approval may entail ongoing requirements for post-marketing
studies.
The FDA's regulations require that any drug or formulation to be
tested in humans must be manufactured according to current Good Manufacturing
Practices regulations ("cGMPs"). This has been extended to include any drugs
which will be tested for safety in animals, in support of human testing. The
cGMPs set certain minimum requirements for procedures, record-keeping and the
physical characteristics of the laboratories used in the production of these
drugs. In addition, various federal and state laws, regulations and
recommendations relating to safe working
9
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conditions, laboratory practices, the experimental use of animals and the
purchase, storage, movement, import and export, use, and disposal of hazardous
or potentially hazardous substances, including radioactive compounds and
infectious disease agents, used in connection with the Company's research work
are or may be applicable to their activities. They include, among others, the
United States Atomic Energy Act, the Clean Air Act, the Clean Water Act, the
Occupational Safety and Health Act, the National Environmental Policy Act, the
Toxic Substances Control Act, and the Resources Conservation and Recovery Act,
national restrictions on technology transfer, import, export and customs
regulations, and other present and possible future local, state or federal
regulation. OXIS is unable to estimate the extent and impact of regulation
resulting from such future federal, state or local legislation or administrative
action.
Outside the United States, the Company's ability to market a product
is contingent upon receiving marketing authorization from the appropriate
foreign regulatory authorities. The requirements governing the conduct of
clinical trials, marketing authorization, pricing and reimbursement vary widely
from country to country. This foreign regulatory approval process may include
all of the risks associated with FDA approval set forth above.
Risk of Product Liability; Use of Hazardous Materials; Limited Insurance
Coverage.
The testing, marketing and sale of human therapeutic products entails
significant risks. If the Company succeeds in developing products in these
areas, use of such products in trials and the sale of such products following
regulatory approval may expose the Company to liability claims allegedly
resulting from use of such products. These claims might be made directly by
consumers or others. OXIS currently has only limited insurance for its clinical
trials. However, there can be no assurance that OXIS will be able to obtain and
maintain such insurance for all of its clinical trials or that coverage will be
in sufficient amounts to protect against damages for liability that could have a
material adverse effect on OXIS. There can also be no assurance that OXIS will
be able to obtain or maintain product liability insurance in the future on
acceptable terms or in sufficient amounts to protect the Company against
damages for liability that could have a material adverse effect on the Company.
In addition, the Company's research and development involves the
controlled use of hazardous materials, radioactive compounds and other
chemicals. Although the Company believes that its safety procedures for handling
and disposing of such materials comply with the standards prescribed by state
and federal regulations, the risk of accidental contamination or injury from
these materials cannot be completely eliminated. In the event of such an
accident, the Company could be held liable for any damages that result and any
such liability could exceed the resources of the Company. The Company may incur
substantial costs to comply with environmental regulations if the Company
develops additional manufacturing capacity.
Company is in Highly Competitive Business.
The pharmaceutical industry is highly competitive. Competition in most
of the Company's primary current and potential product areas from large
pharmaceutical companies, and other companies, universities and research
institutions is intense and expected to increase. Relative to the Company, many
of these entities have substantially greater capital resources, research and
development staffs, facilities and experience in conducting clinical trials and
obtaining regulatory approvals, as well as in manufacturing and marketing
diagnostic and pharmaceutical products. In
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addition, these and other entities may have or may develop new technologies or
use existing technologies that are, or may in the future be, the basis for
competitive products.
Any potential products that the Company succeeds in developing and for
which it gains regulatory approval will have to compete for market acceptance
and market share. For certain of the Company's potential products, an important
factor in such competition may be the timing of market introduction of
competitive products. Accordingly, the relative speed with which the Company can
develop products, complete the clinical testing and regulatory approval
processes and supply commercial quantities of the product to the market are
expected to be important competitive factors. The Company expects that a
competitive edge will be based, among other things, on product efficacy, safety,
reliability, availability, timing and scope of regulatory approval and product
price. There can be no assurance that the Company's competitors will not develop
technologies and products that are more effective than those being developed by
the Company. In addition, certain of the Company's competitors may achieve
product commercialization or patent protection prior to OXIS.
The Company's therapeutic drug monitoring products compete directly
with similar products from major diagnostic companies such as Abbott, Roche
Laboratories ("Roche"), E.I. DuPont de Nemours ("DuPont") and others. Since one
of the Company's business strategies is to provide alternative reagents to
customers who own or rent the Abbott TDx(R)/TDxFLx(R) analyzers, Abbott is the
Company's major competitor in this area. The Company competes based on high
product quality, an aggressive pricing strategy and technical services.
Alternatively, when the Company develops custom assays for pharmaceutical
companies, exclusive manufacturing and marketing rights are generally granted
that may provide protection from competition. Market position for these unique
assays can be enhanced through patents and trade secrets, but in the absence of
such protection other companies could develop comparable assays; and even if
patent protection is obtained, competing companies could still develop
competitive assays.
The Company believes it is a leader in the development of assays for
markers of oxidative stress. Although there are currently a limited number of
competitors for the Company's assays to measure markers of oxidative stress, no
assurances can be given that significant competition will not arise in the
future.
Other pharmaceutical companies are competing with the Company to
develop therapeutic products to treat diseases of oxidative stress. The Company
estimates that over 20 companies have investigated the therapeutic potential of
SOD and the Company is not aware of any other company currently pursuing
development of bSOD for OXIS' target indication, familial amyotrophic lateral
sclerosis ("FALS"). Insofar as the Company is aware, the only major company
currently developing a bSOD based therapeutic is Sanofi Winthrop. The Company
provides bSOD to Sanofi Winthrop for use in the Sanofi Therapeutic.
Some pharmaceutical companies are pursuing the development of
synthetic molecules to treat diseases of oxidative stress. The Company's major
competitors in the area of synthetic antioxidants include the Upjohn Company
("Upjohn") and Free Radical Sciences, Inc. ("Free Radical Sciences"). Upjohn has
a number of ongoing trials to test the therapeutic potential of a group of
synthetic compounds called Lazaroids in several disease indications, and Free
Radical Sciences is testing a drug called procysteine for use in Adult
Respiratory Distress Syndrome and other diseases. Natterman/Rhone Poulenc Rorer
and Daiichi are also developing glutathione peroxidase mimics.
11
<PAGE>
Manufacturing/Dependence On Others.
Certain of the Company's products, and raw materials used in its
products, are produced by independent third parties. Accordingly, the Company is
and will continue to be dependent upon these third parties to produce products
and supply materials with acceptable quality and to deliver them to the Company
in a timely manner. The Company depends on these manufacturers to achieve
acceptable manufacturing yields and to allocate to the Company a sufficient
portion of their capacity to meet the Company's needs. Although the Company has
not experienced material quality or allocation problems to date, there can be no
assurance that such problems will not have a material adverse effect on the
Company's business, financial condition and results of operations in the future.
Furthermore, constraints or delays in the supply of the Company's products and
materials used therein could result in the loss of customers, the delay of
development projects and other adverse effects on the Company's business,
financial condition and results of operations. The Company's reliance on third
party manufacturers and suppliers involves several other risks, including
reduced control over delivery schedules, quality assurance and costs. Foreign
manufacturers and suppliers are subject to additional risks such as changes in
governmental policies, imposition of tariffs and import restrictions and other
factors beyond the Company's control.
From time to time the Company has experienced substantial fluctuations
in orders for the purchase of bulk bSOD. Such fluctuations can complicate and
create difficulties with respect to the manufacturing process. There can be no
assurance that such fluctuations will not occur in the future.
Possible Health Care Reform Legislation and Health Care Costs.
OXIS' ability to successfully commercialize human therapeutic products
may depend in part on the extent to which reimbursement for the cost of such
products and related treatment will be available from government health
administration authorities, private health coverage insurers and other
organizations. Significant uncertainty exists as to the reimbursement status of
newly approved healthcare products, and there can be no assurance that adequate
third party coverage will be available for OXIS to maintain price levels
sufficient for realization of an appropriate return on its investment in
product development. Government and other third-party payers are increasingly
attempting to contain healthcare costs by limiting both coverage and the level
of reimbursement for new therapeutic products approved for marketing by the FDA
and by refusing, in some cases, to provide any coverage for uses of approved
products for disease indications for which the FDA has not granted marketing
approval. If adequate coverage and reimbursement levels are not provided by
government and third-party payers for uses of OXIS' healthcare products, the
market acceptance of these products would be adversely affected.
In addition, as with other companies which supply products and
services to the health care industry, the Company faces an uncertain legislative
environment. Over the last few years, the United States Congress, the President
and various state governments have advanced various health care bills that could
significantly alter the structure of the health care industry. Regardless of
whether or not a health care bill is adopted, private businesses are placing
pressures on health care providers to reduce costs. The Company may be subjected
to pressures or a legislative mandate to reduce the prices of its pharmaceutical
products. This uncertain legislative environment may also adversely affect the
Company's ability to raise capital.
12
<PAGE>
Acquisitions; Difficulties and Costs of Integration.
The transition to a unified company following the acquisition of IBC
and Bioxytech ("Combination") has required substantial attention from
management, which has limited experience in integrating companies
internationally. The diversion of management attention and any difficulties
encountered in the restructuring of the Company and in the subsequent transition
process could have an adverse impact on the business, revenues and operating
results of the Company. The Company's future success will also depend in large
part upon its ability to continue to integrate its U.S. and French operations.
Significant management attention will be required to integrate the operations
of its French subsidiary with those of its domestic operations, and there can be
no assurance that such integration will be successful. The Company is also
concurrently negotiating the acquisition by the Company of Therox
Pharmaceuticals, Inc., another pharmaceuticals research and development company.
In connection with this proposed acquisition, the Company expects to incur
additional expenses and charges and to devote additional managerial attention
with respect to the integration of the businesses.
Foreign Currency and Tax Exposure.
The Company's French subsidiary conducts virtually all of its non-U.S.
business in currencies other than the U.S. dollar and the Company buys and
sells the majority of its SOD in a foreign currency. Accordingly, foreign
currency fluctuations may affect the Company's earnings and asset valuations.
The Company may be affected by laws affecting its ability to repatriate foreign
profits, if any, and by foreign tax laws, as well as by fluctuating tax rates
and changes in international tax treaties. There can be no assurance that laws
and changes such as these will not have a material adverse impact on the
Company's operations.
Labor Laws in France.
Certain of the Company's personnel are located in France. French labor
laws offer employees certain rights in the event of termination which do not
exist under U.S. laws. French labor laws may inhibit management's ability to
take future personnel actions or implement certain operating plans (such as
reducing the size of the French subsidiary's operations).
International Sales.
The Company expects that international sales may account for a
substantial portion of the Company's future revenues. The Company's business in
foreign markets is and will be subject to the risks customarily associated with
such activities, including fluctuations in foreign currency exchange rates and
controls, expropriation, nationalization and other economic, tax and regulatory
policies of foreign governments as well as the laws and policies of the United
States affecting foreign trade and investment.
Failure to Attract or Retain Key Personnel Could Adversely Affect Results.
The Company is dependent upon the efforts and abilities of a number of
its key personnel. The success of the Company depends to a large extent upon its
ability to retain and attract key employees. The loss of certain of these
people or the Company's inability to attract and retain other key employees
could materially adversely affect results of operations. This effect could be
particularly significant if the Company needs to hire, train and assimilate
large numbers of new
13
<PAGE>
employees. During the first half of 1995, Dr. Mark Saifer and Dr. Jean Chaudiere
resigned their positions as corporate vice presidents of the Company, but they
continue to be employed by the Company or by one of its subsidiaries.
Volatility of Stock Price; Shares Available for Future Sale; Absence of
Dividends.
The market prices for securities of biotechnology and pharmaceutical
companies, including the securities of OXIS, have been volatile. Announcements
of technological innovations or new commercial products by OXIS or its
competitors, a change in status of a corporate partner, developments concerning
proprietary rights, including patents and litigation matters, publicity
regarding actual or potential medical results with products under development by
OXIS, regulatory developments in both the United States and foreign countries
and public concern as to the safety of biotechnology or of pharmaceutical
products, as well as period-to-period fluctuations in revenues and financial
results, may have a significant impact on the market price of the Company's
Common Stock. OXIS has not paid any cash dividends since its inception, and it
does not anticipate paying cash dividends in the foreseeable future.
As of July 10, 1995, the Company had approximately 10,683,687 shares
of Common Stock outstanding. Of these, the Company issued approximately
4,380,092 shares of its Common Stock in connection with the acquisition of
Bioxytech S.A. and merger with International BioClinical, Inc. in September 1994
(the "Combination"), certain of which are subject to escrow and other
restrictions (excluded are 107,670 shares of Common Stock which have not yet
been issued but may be issued to former stockholders of Bioxytech if they are
able to invest $1 million in the proposed private placement referred to above).
The Company also has options or warrants outstanding to purchase approximately
1,710,763 shares of Common Stock. Pursuant to this Registration Statement, the
Company is registering for resale all of the shares of Common Stock issued in
the Combination (4,380,092) in addition to 95,418 shares subject to options
granted to former Bioxytech stockholders in the Combination and 33,500 shares
subject to options granted to former International BioClinical, Inc.
stockholders in the Combination. The Company is also registering for resale an
aggregate of 472,763 shares of Common Stock issuable upon exercise of the
Company's warrants, including 122,763 shares subject to a warrant issued to the
private placement agent of the Company in connection with the Company's offshore
placement of securities in May 1995, and is registering 93,300 shares of Common
Stock issued to certain shareholders in connection with loans advanced to the
Company in February 1995. Subject to certain agreements limiting the number of
shares certain of the Selling Stockholders may sell (see "Plan of
Distribution"), these shares may be sold into the public securities markets
after this Registration Statement becomes effective. The registration of Common
Stock pursuant to this Registration Statement will result in an increase of more
than 100% in the number of shares of the Company's Common Stock available for
trading in the public securities market. Future sales of Common Stock in the
public securities markets may cause substantial fluctuations (including
substantial price reductions) in the price of the Company's Common Stock over
short time periods. Additionally, the price of the Company's Common Stock will
be sensitive to the performance and prospects of the Company and other factors.
Share Ownership by Certain Individuals and Concentration of Ownership.
Ray R. Rogers, the Chairman of OXIS, owns 672,368 shares of Common
Stock and options to purchase shares of Common Stock received in the
Combination ("Options") (excluding 240,771 shares owned by an irrevocable trust
for the benefit of Mr. Rogers' children as to which
14
<PAGE>
shares Mr. Rogers has no control), and including shares received in the
Combination which are subject to escrow restrictions. Dr. Anna D. Barker, the
President and Chief Executive Officer of OXIS, owns 913,139 shares of Common
Stock and Options including shares received in the Combination which are
subject to escrow restrictions). Ownership of such Common Stock and Options
represents control by Mr. Rogers and Dr. Barker of approximately 6.3% and 8.6%
of the voting securities of OXIS, respectively. Alta-Berkeley L.P. II is the
owner of 550,774 shares of Common Stock and Options, representing approximately
5.2% of the voting securities of the Company. David Needham, a director of OXIS
and a consultant to the investment advisory firm which advises Alta Berkeley
L.P. II, has a stock option entitling him to purchase 15,000 shares of Common
Stock. Mr. Needham disclaims beneficial ownership of shares of Common Stock
owned by Alta Berkeley L.P. II. As the largest stockholders of OXIS, Mr. Rogers,
Dr. Barker and Alta Berkeley L.P. II are in a position to significantly
influence the outcome of matters (including the election of directors, and any
merger, consolidation or sale of all or substantially all of the Company's
assets) submitted to the Company's stockholders for approval. As a result,
certain transactions may not be possible without the approval of Mr. Rogers, Dr.
Barker and Alta-Berkeley L.P. II. In addition, the Company's directors,
executive officers and principal stockholders and certain of their affiliates,
as a group, have the ability to influence the election of the Company's
directors and most other stockholder actions.
Quarterly Operating Results Affected by Many Business Factors.
The Company has experienced fluctuations in quarterly results and is
likely to continue to experience such fluctuations. Expense levels are based, in
part, on expectations of future revenues. If revenue levels in a particular
quarter are less than expected, operating results will be affected adversely,
which may have an adverse impact on the market price of the Company's Common
Stock. A variety of factors have an influence on the level of revenues and
expenses in a particular quarter. These factors include specific economic
conditions in the pharmaceutical industry, the withdrawal or failure to grant
requisite government approvals, the timing of the receipt of orders from its
major customer, Sanofi Winthrop, customer cancellations or delay of shipments,
production delays, exchange rate fluctuations, management decisions to commence
or discontinue product lines, the introduction of new products by the Company or
its competitors, the timing of research and development expenditures, and
expenses attendant to acquisitions, strategic alliances and the further
development of marketing and service capabilities.
15
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common
Stock by the Selling Stockholders in the offering.
16
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth the names of the Selling Stockholders, the
number of shares of Common Stock owned beneficially by each of the Selling
Stockholders as of July 10, 1995, and the number of shares which may be offered
for resale pursuant to this Prospectus. This information is based upon
information provided by the Selling Stockholders. Because the Selling
Stockholders may offer all, some or none of their Common Stock, no definitive
estimate as to the number of shares thereof that will be held by the Selling
Stockholders after such offering can be provided and the following table has
been prepared on the assumption that all shares of Common Stock under this
Prospectus will be sold.
<TABLE>
<CAPTION>
Shares Beneficially
Owned Prior to Shares Being Shares Beneficially
Offering/(1)(2)/ Offered Owned After Offering/(3)/
Name Number Number Percentage/(4)/
---- ------ ------ ----------
<S> <C> <C> <C> <C>
Russell E. Teasdale/(5)(6)/ 220,000 220,000 0 0
Mark G.P. Saifer /(5)(7)/ 197,500 5,000 192,500 1.77%
L. David Williams/(5)/ 55,000 15,000 40,000 *
Marc A. Fisher/(5)/ 35,000 35,000 0 0
Carol C. Golsch/(5)/ 20,000 20,000 0 0
Carl Claassen/(5)/ 5,000 5,000 0 0
Rima Agamian/(5)/ 2,500 2,500 0 0
Ralph Somack/(5)/ 47,500 47,500 0 0
Anna D. Barker/(8)/ 913,139 876,139 37,000 *
H. Gerald Bidwell 33,440 33,440 0 0
Cascadia Pacific
Management, Inc. 13,543 13,543 0 0
Daniel Cawley 8,660 8,025 635 *
Terryl Dank 12,797 11,369 1,428 *
Kari Henderson 3,627 2,675 952 *
Debbie Heuvelhorst 3,768 2,340 1,428 *
Charles Martin 19,009 18,057 992 *
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially
Owned Prior to Shares Being Shares Beneficially
Offering/(1)(2)/ Offered Owned After Offering/(3)/
Name Number Number Percentage/(4)/
---- ------ ------ ----------
<S> <C> <C> <C> <C>
Stephen H. Mastin 51,660 50,160 1,500 *
Paul Mueggler 36,278 34,778 1,500 *
Dennis Murray 7,213 6,420 793 *
Jon S. Pitcher/(9)/ 29,418 28,625 793 *
Harry Roberts/(10)/ 9,344 9,344 0 0
Ray R. Rogers/(11)/ [672,368] [635,368] [37,000] *
George Spencer as
Trustee for Rogers'
Trusts dated March 7,
1994/(12)/ 240,771 240,771 0 0
Ken Stenglein 5,474 4,681 793 *
Anthony Miadich/(13)/ 7,500 7,500 0 0
Oregon Resource and
Technology Development
Fund/(14)/ 20,000 20,000 0 0
Lynda Taylor 29,393 28,758 635 *
Innolion/(15)/ 540,670 540,670 0 0
Alta-Berkeley L.P.
II/(16)/ 550,774 550,774 0 0
Sofinnova S.A./(17)/ 161,288 161,288 0 0
Sofinnova Capital
FCPR/(18)/ 242,021 242,021 0 0
Finovelec/(19)/ 429,762 429,762 0 0
Hemera II & Cie 132,630 132,630 0 0
Euroventures Germany C.V. 53,622 53,622 0 0
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially
Owned Prior to Shares Being Shares Beneficially
Offering/(1)(2)/ Offered Owned After Offering/(3)/
Name Number Number Percentage/(4)/
---- ------ ------ ----------
<S> <C> <C> <C> <C>
Chimtex S.A. 27,117 27,117 0 0
Finbiotec SPA 31,785 31,785 0 0
Sumaru S.r.1 21,895 21,895 0 0
Sea Farming S.r.1 21,895 21,895 0 0
Jean Chaudiere/(20)/ 119,499 119,499 0 0
Christian Manuel 76,864 76,864 0 0
Estate of A Crastes
de Paulet/(21)/ 13,362 13,362 0 0
Andre Capron 762 762 0 0
Michel Rigaud/(22)/ 13,366 13,366 0 0
Catherine Rice Evans 754 754 0 0
Bernard Jacotot 754 754 0 0
Yves Grosgogeat 754 754 0 0
Jean-Claude Yadan 64,549 49,638 14,911 *
Henry-Michel Bouillet 670 670 0 0
Andre Galli 503 503 0 0
Jacques Emerit 503 503 0 0
Marc Lange 503 503 0 0
John B. Hawken/(23)/ 24,231 24,231 0 0
Marc Moutet 38,732 29,784 8,948 *
Irene Erdelmeier 24,911 24,911 0 0
[Bailey & Co]./(24)/ 122,763 122,763 0 0
--------- --------- ------- -------
Total: 5,416,841 5,075,073 341,768 3.11%
========= ========= ======= =======
</TABLE>
19
<PAGE>
* less than 1% of the issued and outstanding Common Stock of the Company.
(1) Unless otherwise indicated in the footnotes to this table, the persons
and entities named in the table have sole voting and sole investment
power with respect to all shares beneficially owned, subject to
community property laws where applicable.
(2) As required by regulations of the Securities and Exchange Commission,
the number of shares in the table includes shares which can be purchased
within 60 days.
(3) Assumes the sale of all shares offered hereby. As required by
regulations of the Securities and Exchange Commission, each percentage
reported in the table for these individuals is calculated as though
shares which can be purchased within 60 days have been purchased by the
respective person or group and are outstanding.
(4) Applicable percentage of ownership is based on 10,683,687 shares of
Common Stock outstanding on July 10, 1995.
(5) Includes with respect to the following persons, the following number of
shares which may be acquired through the exercise of stock warrants:
Russell E. Teasdale (220,000); Mark G.P. Saifer (195,000); L. David
Williams (55,000); Mark Fisher (35,000); Carol Golsch (20,000); Carl
Claassen (5,000); Rima Agamian (2,500); Ralph Somack (47,500). Mssrs.
Claussen and Fisher are former directors of the Company.
(6) Russell Teasdale is employed by the Company as a consultant and is a
former executive officer of the Company.
(7) Mark Saifer resigned as an executive officer of the Company during 1995,
but continues to be an employee of the Company.
(8) Anna Barker is a director of the Company and its President and Chief
Executive Officer. Figure in first column includes 35,000 shares
which may be acquired by exercise of options.
(9) Jon Pitcher is the Company's Chief Financial Officer.
(10) Includes 6,000 shares which may be acquired on exercise of options.
(11) Ray R. Rogers is a director and the Chairman of the Board of Directors
of the Company. Figure in first column includes 20,000 owned by his
individual retirement account, as to which Rogers exercises voting and
investment power, and excludes 240,771 shares owned by an irrevocable
trust for the benefit of his children. George C. Spencer is the trustee
under such irrevocable trust. George C. Spencer is a partner of Tonkon,
Torp, Galen, Marmaduke & Booth, a law firm which represents the Company.
Figure in first column also includes 20,000 shares which may be acquired
by exercise of options.
(12) See Note (11) above.
(13) Includes 7,500 shares which may be acquired on exercise of options.
(14) Includes 20,000 shares which may be acquired on exercise of options.
(15) Includes 18,424 shares which may be acquired on exercise of options.
(16) Includes 16,452 shares which may be acquired on exercise of options.
(17) Includes 4,792 shares which may be acquired on exercise of options.
(18) Includes 7,184 shares which may be acquired on exercise of options.
(19) Includes 2,786 shares which may be acquired on exercise of options.
(20) Jean Chaudiere resigned as an executive officer of the Company during
1995, but continues as the President of Bioxytech, the Company's French
subsidiary.
(21) Includes 5,963 shares which may be acquired upon exercise of options.
(22) Includes 5,963 shares which may be acquired upon exercise of options.
20
<PAGE>
(23) Includes 23,854 shares which may be acquired on exercise of options.
(24) Includes 122,763 shares which may be acquired on exercise of warrants.
21
<PAGE>
PLAN OF DISTRIBUTION
The Company is registering the shares of Common Stock offered by the
Selling Stockholders hereunder in certain instances on a voluntary basis and
otherwise pursuant to contractual registration rights contained in two
Registration Rights Agreements entered into on September 7, 1994 (the
"Registration Rights Agreements"), the terms of certain warrants dated March 13,
1987 through August 21, 1988 and an engagement letter providing for a warrant
dated May 23, 1995.
Pursuant to the terms of the Registration Rights Agreements, no Selling
Stockholders party to the Registration Rights Agreement may sell during (i) any
three month period while this Registration Statement is in effect, a number of
shares of Common Stock which are Registrable Securities (as defined in the
Registration Rights Agreements) that is greater than one percent (1%) of the
number of issued and outstanding Common Stock at such time and (ii) any single
month while this Registration Statement is in effect, a number of shares of
Registrable Securities that is more than one-third (1/3) of one percent (1%) of
the number of issued and outstanding Common Stock at such time. Within ten (10)
days following the last day of any month in which a Selling Stockholder party to
the Registration Rights Agreement sells Registrable Securities, any such
Selling Stockholder must notify the Company of the number of shares of
Registrable Securities sold by such Selling Stockholder.
The Registration Rights Agreements also provide that if the Company
proposes to register any of its stock or other securities under the Securities
Act in connection with an underwritten public offering of such securities solely
for cash, the Company shall, at such time, promptly give each Selling
Stockholder party to the Registration Rights Agreement written notice of such
registration, and in connection with such public offering, the Selling
Stockholders party to the Registration Rights Agreement have agreed not to sell
any of the Registrable Securities during such customary lock-up period
requested by the Company's underwriters who are underwriting such public
offering. The Selling Stockholders party to the Registration Rights Agreement
shall have no right to participate in any such public offering.
Subject to the foregoing restrictions with respect to those Selling
Stockholders which are parties to either of the Registration Rights Agreements,
the shares of Common Stock offered hereunder may be sold from time to time by
the Selling Stockholders, or by pledgees, donees, transferees or other
successors in interest. Such sales may be made on the Nasdaq National Market or
in the over-the-counter market or otherwise at prices and on terms then
prevailing or related to the then current market price, or in negotiated
transactions. The shares of Common Stock may be sold to or through one or more
broker-dealers, acting as agent or principal in underwriting offerings, block
trades, agency placements, exchange distributions, brokerage transactions or
otherwise, or in any combination of transactions.
In connection with any transaction involving the Common Stock, broker-
dealers or others may receive from the Selling Stockholders, and may in turn pay
to other broker-dealers or others, compensation in the form of commissions,
discounts or concessions in amounts to be negotiated at the time. Broker-dealers
and any other persons participating in a distribution of the Common Stock may be
deemed to be "underwriters' within the meaning of the Act in connection with
such distribution, and any such commissions, discounts or concessions may be
deemed to be underwriting discounts or commissions under the Act.
22
<PAGE>
Any or all of the sales or other transactions involving the Common Stock
described above, whether effected by the Selling Stockholders, any broker dealer
or others, may be made pursuant to this prospectus. In addition, any shares of
Common Stock that qualify for sale pursuant to Rule 144 under the Act may be
sold under Rule 144 rather than pursuant to this prospectus.
In order to comply with the securities laws of certain states, if
applicable, the Common Stock may be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, shares of Common Stock
may not be sold unless they have been registered or qualified for sale or an
exemption from registration or qualification requirements is available and is
complied with under applicable state securities laws.
The Company and the Selling Stockholders have agreed, and hereafter may
further agree, to indemnify certain persons, including broker-dealers or others,
against certain liabilities in connection with any offering of the Common
Stock, including liabilities arising under the Act.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for
the Company by Jackson, Tufts, Cole & Black, San Jose, California.
EXPERTS
The financial statements and schedules incorporated by reference in this
Prospectus from the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report which is incorporated herein by reference
(which report expresses an unqualified opinion and includes an explanatory
paragraph referring to the Company's ability to continue as a going concern),
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing..
23
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth all expenses, other than the underwriting
discounts and commissions, payable by the Registrant in connection with the sale
of the Common Stock being registered. All the amounts shown are estimates except
for the registration fee.
<TABLE>
<S> <C>
Registration fee $ 5,250
Blue sky qualification fees and expenses 5,000
Printing and engraving expenses 10,000
Legal fees and expenses 25,000
Accounting fees and expenses 5,000
Miscellaneous 2,000
Total $52,250
=======
</TABLE>
Item 15. Indemnification of Officers and Directors.
The Company has the power, pursuant to Section 102(7) of the Delaware
General Corporation Law, to limit the liability of directors of the Company for
certain breaches of fiduciary duty and, pursuant to Section 145 of the Delaware
General Corporation Law, to indemnify its officers and directors and other
persons for certain acts.
The Company's Restated Certificate of Incorporation includes the
following provisions:
"A director of the Company shall not be personally liable to the company
or its stockholders for monetary damages for breach of fiduciary duty as
a director, except for liability (i) for any breach of the director's
duty of loyalty to the Company or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director
derived an improper personal benefit. If the Delaware General
Corporation Law is amended to authorize corporate action further
eliminating or limiting the personal liability of directors, then the
liability of a director of the Company shall be eliminated or limited to
the fullest extent permitted by the Delaware General Corporation Law, as
so amended. Any repeal or modification of this Article by the
stockholders of the Company shall not adversely affect any right or
protection of a director of the Company existing at the time of such
repeal or modification."
"The Company shall indemnify any and all persons whom it has the power to
indemnify pursuant to the General Corporation Law of Delaware against
any and all expenses, judgments, fines, amounts paid in settlement, and
any other liabilities to the fullest extent permitted by such law and may
at the discretion of the Board of Directors, purchase and maintain
insurance, at its expense, to protect itself and such persons against any
expense, judgment, fine, amount paid in settlement or
24
<PAGE>
other liability, whether or not the Company would have the power to so
indemnify such person under the General Corporation Law of Delaware."
Pursuant to Section 145 of the Delaware Law, a corporation generally has
the power to indemnify its present and former directors, officers, employees and
agents against expenses incurred by them in connection with any suit to which
they are, or are threatened to be made, a party by reason of their serving in
such positions so long as they acted in good faith and in a manner they
reasonably believed to be in, or not opposed to, the best interests of a
corporation, and with respect to any criminal action, they had no reasonable
cause to believe their conduct was unlawful. The Company believes that these
provisions are necessary to attract and retain qualified persons as directors
and officers. These provisions do not eliminate liability for breach of the
director's duty of loyalty to the Company or its stockholders, for acts or
omissions not in good faith or involving intentional misconduct or knowing
violations of law, for any transaction from which the director derived an
improper personal benefit or for any willful or negligent payment of any
unlawful dividend or any unlawful stock purchase agreement or redemption.
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's board of directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act.
Article III of the Company's Bylaws provides that the Company, by action
of the Board of Directors, may, to the fullest extent permitted by the General
Corporation Law of Delaware, indemnify any and all persons who it shall have
power to indemnify against any and all of the expenses, liabilities or other
matters.
The Company has purchased and maintains an insurance policy covering the
officers and directors of the Company with respect to certain liabilities
arising under the Securities Act or otherwise.
25
<PAGE>
Item 16. Exhibits
(a) Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
------ -----------------------
<S> <C>
5.1 Opinion of Jackson, Tufts, Cole & Black.
10.1 Term Loan Agreement dated as of May 2, 1995 between OXIS
International, Inc., Bioxytech, S.A. and Sanofi S.A. and related
Promissory Note in the principal amount of $600,000
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Jackson, Tufts, Cole & Black. Reference is made to
Exhibit 5.1.
24.1 Power of Attorney. Reference is made to page II-5.
</TABLE>
______________________
26
<PAGE>
Item 17. Undertakings
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Company
pursuant to provisions described in Item 15, or otherwise, the Company has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Act, each
filing of the Company's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) That, for purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Company pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Act shall be deemed to be part of this Registration Statement as of
the time it was declared effective.
(6) To deliver or cause to be delivered with the Prospectus, to each
person to whom the Prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the Prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Exchange Act; and, where interim financial information required to be
presented by Article 3 of Regulation S-X are not set forth in the Prospectus, to
deliver, or cause to be delivered to each person to whom the Prospectus is sent
or given, the latest quarterly report that
27
<PAGE>
is specifically incorporated by reference in the Prospectus to provide such
interim financial information.
28
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Portland, State of
Oregon, on the 17th day of July, 1995.
OXIS INTERNATIONAL, INC.
By: s/Anna D. Barker
-------------------------
Anna D. Barker, Ph.D.
President and Chief Executive Officer
(Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Ray R. Rogers and Anna D. Barker, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place, and
stead, in any and full capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
s/Anna D. Barker Director; President and Chief July 17, 1995
- ------------------------- Executive Officer
Anna D. Barker (Principal Executive Officer)
s/Jon S. Pitcher Chief Financial Officer July 17, 1995
- --------------------------- (Principal Financial and
Jon S. Pitcher Accounting Officer)
s/Ray R. Rogers Director; Chairman of the Board July 17, 1995
- ---------------------------
Ray R. Rogers
29
<PAGE>
s/Gerald D. Mayer Director July 17, 1995
- ---------------------------
Gerald D. Mayer
s/Peter E. Taussig Director July 17, 1995
- ---------------------------
Peter E. Taussig
s/Lawrance A. Brown, Jr. Director July 17, 1995
- ---------------------------
Lawrance A. Brown, Jr.
s/David Needham Director July 17, 1995
- ---------------------------
David Needham
s/A.R. Sitaraman Director July 17, 1995
- ---------------------------
A.R. Sitaraman
30
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION SEQUENTIAL
NUMBER PAGE NO.
<S> <C> <C>
5.1 Opinion of Jackson, Tufts, Cole & Black 32
10.1 Term Loan Agreement dated as of May 2, 1995 33
between OXIS International, Inc.,
Bioxytech, S.A. and Sanofi S.A. and related
Promissory Note in the principal amount of
$600,000
23.1 Consent of Deloitte & Touche LLP 47
23.2 Consent of Jackson, Tufts, Cole & Black.
Reference is made to Exhibit 5.1
24.1 Power of Attorney. Reference is made to page 29.
</TABLE>
31
<PAGE>
Exhibit 5.1
OPINION OF JACKSON, TUFT, COLE & BLACK
July 17, 1995
OXIS International, Inc.
6040 N. Cutter Circle
Suite 317
Portland, Oregon 97217-3935
Ladies and Gentlemen:
With reference to the Registration Statement on Form S-3 (the
"Registration Statement") to be filed by OXIS International, Inc., a Delaware
corporation (the "Company"), with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, relating to 5,075,073 shares of Common
Stock, par value $.50 per share, of the Company (the "Common Stock"), it is our
opinion that with respect to (i) the shares of Common Stock to be offered and
sold pursuant to the Registration Statement which are issued and outstanding on
the date hereof, such shares of Common Stock are legally issued, fully paid and
nonassessable and (ii) the shares of Common Stock to be offered and sold
pursuant to the Registration Statement which are issuable pursuant to the terms
of stock options or warrants, such shares of Common Stock, when issued and sold
in accordance with the applicable stock option or warrant, will be legally
issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as Exhibit 5.1 to the Registration Statement.
Very truly yours,
Jackson, Tufts, Cole & Black
32
<PAGE>
Exhibit 10.1
TERM LOAN AGREEMENT
Dated as of May 2, 1995
OXIS INTERNATIONAL, INC., a Delaware corporation ("OXIS"), BIOXYTECH
S.A., a French subsidiary of OXIS ("Bioxytech"), and SANOFI S.A. (the "Lender")
agree as follows:
W I T N E S S E T H
WHEREAS, the borrower of funds under this Agreement is OXIS
(hereinafter referred to as "Borrower"), and Bioxytech, which benefits
from the Advance (as defined below), is a party to this Agreement for the
purpose of guaranteeing its parent's obligations under this Agreement and
agreeing to make available its assets as part of the Collateral
(hereinafter defined) for the Advance; and
WHEREAS, OXIS is in need of cash and the Lender, which obtains raw
material supply from OXIS, is willing to accommodate OXIS on the terms
and conditions of this Agreement; and
WHEREAS, the parties are willing to enter into this Agreement with
the understanding that if definitive supply and licensing agreements by
and between OXIS and the Lender (hereinbelow provided for) are signed and
delivered, the Advance hereunder shall constitute a credit in favor of
the Lender, the same to be applied for offset under or in connection with
said supply and licensing agreements.
NOW, THEREFORE, in consideration of these premises and the further
agreements of the parties hereinbelow set forth, the parties agree with
each other as follows:
ARTICLE I AMOUNTS AND TERMS OF THE ADVANCE
SECTION 1.01 The Advance
The Lender agrees, on the terms and conditions hereinafter set forth, to
make an Advance (the "Advance") to Borrower upon full execution and delivery of
this Agreement in an aggregate amount equal to U.S.$600,000.00. Not later than
2:00 P.M. (New York City time) on the date of the Advance and upon fulfillment
of the applicable conditions set forth in Article II, the Lender will make the
Advance available to Borrower in same day funds at the time and place as
instructed by OXIS.
33
<PAGE>
SECTION 1.02 Interest and Repayment; Guaranty
(a) Borrower's Note. Borrower shall repay, and shall pay interest on,
---------------
the unpaid principal amount of the Advance made thereto in accordance with a
promissory note of Borrower, in substantially the form of Exhibit A hereto (the
"Note"), evidencing the indebtedness resulting from the Advance and delivered to
the Lender pursuant to Article II.
(b) Bioxytech Guaranty. By signing this Agreement, Bioxytech, in
------------------
consideration of a portion of the loan proceeds being applied to its debts,
hereby unconditionally and absolutely guarantees, to the extent permitted by
French law, the full, faithful and timely performance of all of OXIS'
obligations (whether now or hereafter existing) under this Agreement (the
"Obligations"), including, without limitation, its obligation to repay the
Advance (with accrued interest, if any) as and when the same shall become due
and payable under the terms of this Agreement. Bioxytech also agrees, to the
extent permitted by French law, to pay any and all expenses (including, without
limitation, reasonable attorneys' fees and expenses) incurred by the Lender in
enforcing any rights under this Section 1.02(b). Without limiting the generality
of the foregoing, Bioxytech's liability shall extend to all amounts which
constitute part of the Obligations and would be owed by OXIS under this
Agreement and the Note but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving OXIS. Bioxytech guarantees, to the extent permitted by
French law, that the Obligations will be paid strictly in accordance with the
terms of this Agreement and the Note, regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of the Lender with respect thereto. The obligations of Bioxytech
under this Section 1.02(b) are independent of the Obligations, and a separate
action or actions may, subject to the foregoing, be brought and prosecuted
against Bioxytech to enforce this guaranty, irrespective of whether any action
is brought against the Borrower or whether the Borrower is joined in any such
action or actions. The liability of Bioxytech under this guaranty shall be
absolute and unconditional, to the extent permitted under French law,
irrespective of:
(i) any lack of validity or enforceability of this Agreement, the
Note or any other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment
or waiver of or any consent to departure from this Agreement or the Note,
including, without limitation, any increase in the Obligations resulting
from the extension of additional credit to the Borrower or any of its
subsidiaries or otherwise;
(iii) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the Obligations;
(iv) any manner of application of collateral, or proceeds thereof,
to all or any of the Obligations, or any manner of sale or other
disposition of any Collateral for all or any of the Obligations or any
other assets of the Borrower or any of its subsidiaries;
(v) any change, restructuring or termination of the corporate
structure or existence of the Borrower or any of its subsidiaries; or
34
<PAGE>
(vi) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, the Borrower or a guarantor.
This guaranty shall, to the extent permitted under French law, continue to be
effective or be reinstated, as the case may be, if at any time any payment of
any of the Obligations is rescinded or must otherwise be returned by the Lender
upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise,
all as though such payment had not been made. Bioxytech hereby waives
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Obligations and this guaranty and any requirement that the Lender
protect, secure, perfect or insure any security interest or lien or any property
subject thereto or exhaust any right or take action against the Borrower or any
other person or entity or any collateral.
SECTION 1.03 Optional Prepayments
Borrower may prepay the outstanding principal amount of the Advance made
thereto in whole or in part, together with accrued interest (if any is due) to
the date of such prepayment on the principal amount prepaid; provided, however,
-------- -------
that each partial prepayment shall be in a principal amount not less than
$25,000.
SECTION 1.04 Payments and Computations
Borrower shall make payment hereunder and under any other Loan Document
(as hereinafter defined) not later than 2:00 P.M. (New York City time) on the
day when due in lawful money of the United States of America to the Lender c/o
Sanofi, Inc., 90 Park Avenue, New York, New York 10016 in same day funds or as
otherwise agreed by the Lender and Borrower. All computations of interest under
the Note shall be made by the Lender on the basis of the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable. Each determination by the Lender of an interest
rate hereunder shall be conclusive and binding for all purposes, absent
manifest error.
ARTICLE II CONDITIONS PRECEDENT TO THE ADVANCE
SECTION 2.01 The Lender's Conditions
The obligation of the Lender to make the Advance is subject to the
condition precedent that the Lender shall have received on or before the day of
the Advance the following, each dated such day, in form and substance
satisfactory to the Lender:
(a) The Note.
(b) A Security Agreement, duly executed by Borrower and
Bioxytech, in substantially the form of Exhibit B hereto (the "Security
Agreement", and together with this Agreement and the Note, collectively, the
"Loan Documents"), together with proper Financing Statements (Form UCC-l), duly
signed by Borrower, for all domestic jurisdictions as may be necessary or, in
the opinion of the Lender, desirable to perfect the security interests created
by the Security Agreement,
Borrower and Bioxytech make no representation or warranty to Lender that
Bioxytech can lawfully grant a security interest in Bioxytech's assets under
French law as applied to Bioxytech's
35
<PAGE>
circumstances; however, Borrower covenants that, promptly following receipt of
the Advance, it will take whatever additional steps Lender deems appropriate to
cause Bioxytech to grant to the Lender a security interest in Bioxytech's assets
and to perfect such security interest under French law, in each case to the
fullest extent permitted under French law.
(c) Certified copies of the resolutions of the Board of Directors
of Borrower and the Supervisory Board of Bioxytech approving each Loan Document
to which such entity is or will be a party, and of all documents evidencing
other necessary corporate or similar action with respect to each such Loan
Document.
(d) A certificate of the Secretary or an Assistant Secretary of
Borrower, in form and substance satisfactory to the Lender.
(e) Such other approvals, opinions or documents as the Lender may
reason ably request.
(f) A Waiver and Consent (as hereinafter defined), duly executed
by the parties.
ARTICLE III REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Representations and Warranties of Borrower
Borrower represents and warrants as follows:
(a) Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of Delaware.
(b) The execution, delivery and performance by Borrower of each
Loan Document to which it is or will be a party are within its corporate powers,
have been duly authorized by all necessary corporate action, do not contravene
(i) its charter or bylaws or (ii) law or any contractual restriction binding on
or affecting it, and do not result in or require the creation of any lien,
security interest or other charge or encumbrance (other than pursuant hereto)
upon or with respect to any of its properties. Neither Borrower nor Bioxytech
makes any warranty or representation regarding the validity or enforceability of
Bioxytech's guarantee provided under this Agreement; provided, that Borrower
covenants to cause Bioxytech to take such steps as are necessary to ratify
Bioxytech's participation in this Agreement as of this date, all in accordance
with applicable French law; provided further, however, if under applicable
French law such ratification is prohibited, Borrower shall notify the Lender of
such fact and take such further action regarding Bioxytech's participation in
this Agreement as shall be reasonably requested by Lender.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body that is
material is required for the due execution, delivery and performance by
Borrower of any Loan Document to which Borrower is or will be a party.
(d) This Agreement is, and each other Loan Document to which
Borrower or Bioxytech will be a party when delivered hereunder will be, a legal,
valid and binding obligation of Borrower, enforceable against it in accordance
with its terms, except as enforceability may be
36
<PAGE>
limited or affected by applicable bankruptcy, insolvency, reorganization or
other laws of general application relating to or affecting the rights of
creditors and except as enforceability may be limited by rules of law governing
specific performance, injunctive relief or other equitable remedies.
(e) There is no pending or threatened action or proceeding
affecting Borrower before any court, governmental agency or arbitrator, which
may materially adversely affect the financial condition or operations of
Borrower.
(f) No proceeds of any Advance will be used to acquire any
security of a class which is registered pursuant to Section 12 of the Securities
Exchange Act, as amended, or otherwise subject to Section 13 thereof.
(g) Neither Borrower nor Bioxytech is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System), and no proceeds of any Advance will be used to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.
(h) OXIS has no subsidiaries except for Bioxytech S.A., which is a
party to this Agreement for the purposes hereinabove specified.
(i) The execution and delivery by ALTA-Berkeley L.P. II ("ALTA"), on
behalf of ALTA and the other Secured Parties (as defined in the Security
Agreement dated as of February 7, 1995 between ALTA and Innolion S.A., as
Security Agents, and OXIS) (collectively, the "Secured Parties"), of the Waiver
and Consent dated as of May 2, 1995 between ALTA and Sanofi (the "Waiver and
Consent"), have been duly authorized by all necessary corporate or similar
action.
(j) The Waiver and Consent is the legal, valid and binding
obligation of each of the Secured Parties enforceable against each of the
Secured Parties in accordance with its terms, except to the extent limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or similar law affecting the availability or enforcement of creditors'
rights generally or (ii) general principles of equity (regardless of whether
considered in a proceeding in equity or at law), including, without limitation,
those relating to the availability of the remedy of specific performance or
injunctive relief or to concepts of materiality, reasonableness, good faith or
fair dealing.
ARTICLE IV COVENANTS OF BORROWER
SECTION 4.01 Affirmative Covenants
So long as the Note shall remain unpaid, Borrower will, unless the Lender
shall otherwise consent in writing:
(a) Compliance with Laws Etc. Comply, and cause Bioxytech to
------------------------
comply,in all material respects with all applicable laws, rules, regulations and
orders to the degree necessary to permit OXIS and Bioxytech to continue to
operate their respective businesses in the manner currently so operated.
37
<PAGE>
(b) Reporting Requirements. Furnish to the Lender:
----------------------
(i) as soon as available and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of OXIS
and to the extent not duplicated under (ii) below, unaudited, quarterly
balance sheets of OXIS and its subsidiaries as of the end of such
quarter and statements of income and retained earnings of OXIS and its
subsidiaries for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, certified in customary form
by the chief financial officer of OXIS;
(ii) promptly after the sending or filing thereof, copies of all
reports which such Borrower sends to any of its security holders, and
copies of all reports and registration statements which such Borrower or
any subsidiary files with the Securities and Exchange Commission or any
national securities exchange;
(iii) as soon as possible (and, in all cases, within five business
days) after the occurrence of each Event of Default and each event which,
with the giving of notice or lapse of time or both, would constitute an
Event of Default, continuing on the date of such statement, a statement
of the chief financial officer of such Borrower setting forth details of
such Event of Default or event and the action which Borrower has taken
and proposes to take with respect thereto; and
(iv) such other information respecting the condition or
operations, financial or otherwise, of such Borrower or any of its
subsidiaries as the Lender may from time to time reasonably request;
provided, however, that all information not disclosed above pertaining
-------- -------
to b/SOD and r/SOD (as such terms are defined below) shall be furnished
to the Lender only in connection with the good faith negotiations
between the parties under Section V; and provided further that, with to
----------------
confidential or proprietary respect information, Borrower shall not be
obligated under this Section 4.01(b)(iv) to furnish such information to
the Lender until the Lender shall have executed and delivered a
confidentiality agreement with respect thereto, in substance reasonably
satisfactory to Borrower.
(c) Use of Proceeds. To the extent that OXIS shall use any funds
---------------
from the Advance to pay salaries or similar obligations to its employees or
agents, OXIS shall pay all withholding and similar taxes related thereto with
funds from the Advance.
(d) Pledge of Bioxytech Ownership Interest. Borrower hereby
--------------------------------------
agrees to pledge to Lender, in full compliance with French law and as soon as
practicable after the date hereof, all of Borrower's ownership interest in
Bioxytech. Borrower shall, promptly following the date of this Agreement,
cooperate fully with Lender in documenting the required instruments of pledge to
perfect Lender's security interest in the aforesaid Bioxytech share ownership.
(e) Further Documents. Execute deliver or cause to be executed
-----------------
and delivered to the Lender from time to time such security agreements,
financing statements, reaffirmations and consents and such other similar
documents, instruments or agreements (including, without limitation, security
agreements or similar documents with respect to the Collateral of Bioxytech in
proper form for filing and recordation in France), as the Lender may reasonably
request.
38
<PAGE>
SECTION 4.02 Negative Covenants
So long as the Note shall remain unpaid, Borrower will not, without the
written consent of the Lender:
(a) Liens. Etc. Create or suffer to exist, or permit any of its
----------
subsidiaries to create or suffer to exist, any lien, security interest or other
charge or encumbrance, or any other type of preferential arrangement, upon or
with respect to any of its properties, whether now owned or hereafter acquired,
or assign, or permit any of its subsidiaries to assign, any right to receive
income, in each case if the effect thereof were to cause the Lender to lose its
first lien position on any of the Collateral under the Security Agreement;
provided, however, that, notwithstanding anything to the contrary, in no event
- -------- -------
shall Borrower create or suffer to exist, or permit any of its subsidiaries to
create or suffer to exist, any lien, security interest or other charge or
encumbrance, or any other type of preferential arrangement, upon or with respect
to b/SOD or r/SOD or grant, or permit any of its subsidiaries to grant, any
license or licensing rights to any person or entity other than the Lender with
respect to b/SOD or r/SOD (unless OXIS and Lender fail to reach agreement on the
Supply and Licensing Agreements (as hereafter defined) referred to below in
Article V within the prescribed time frame set forth in such Article, after
which time OXIS, with prior notice to Lender, may seek and undertake all
appropriate alternative courses of action, subject to Lender's first lien rights
as hereinabove agreed).
(b) Dividends, Etc. Declare or pay any dividends, purchase or
--------------
otherwise acquire for value any of its capital stock now or hereafter
outstanding, or make any distribution of assets to its stockholders as such, or
permit any of its subsidiaries to purchase or otherwise acquire for value any
stock of Borrower.
(c) Mergers, Etc. Except for a possible merger involving Therox
-------------
(for which Lender grants its consent), merge or consolidate with or into, or,
outside the ordinary course of its business, convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
any of its material assets (whether now owned or hereafter acquired and
including, without limitation, any of its right, title or interest in or with
respect to b/SOD or r/SOD) to, or acquire all or substantially all of the
assets of, any person or entity, or permit any of its subsidiaries to do so,
without the Lender's prior written consent, which shall not be unreasonably
withheld.
ARTICLE V. COVENANTS OF THE LENDER AND BORROWER
SECTION 5.01 Supply and Licensing Agreements
Each of Borrower and the Lender shall use good faith efforts to execute
and deliver, or to cause the appropriate party to execute and deliver, as the
case may be, as soon as practicable after the date hereof, but in no event later
than June 30, 1995, on terms reasonably satisfactory to OXIS and the Lender, the
following agreements (collectively, the "Supply and Licensing Agreements"):
(a) bulk supply agreement pursuant to which pharmaceutical
grade bovine superoxide dismutase ("b/SOD") will be supplied to the Lender; and
39
<PAGE>
(b) a license agreement pursuant to which the Lender will be
provided with, among other things, the proprietary processes and know-how to
manufacture b/SOD and the right to manufacture, market and sell b/SOD; and
(c) a license agreement pursuant to which the Lender will be
provided with, among other things, the proprietary processes and know-how to
manufacture recombinant human superoxide dismutase ("r/SOD") and the right to
manufacture, market and sell r/SOD.
SECTION 5.02 Limitations
The obligations of the Lender and Borrower to act in good faith under
Section 5.01 shall continue throughout the term of this Agreement, subject to
the following:
(a) If the Note is paid in full, the parties may, but shall not
be required to, continue negotiating agreement on the Supply and Licensing
Agreements.
(b) If OXIS is voluntarily, or involuntarily, placed in
bankruptcy under the United States bankruptcy laws, either OXIS or the Lender
may cease further negotiations with respect to the Supply and Licensing
Agreements.
(c) If after this date Lender enters into any agreement with
OXIS or Bioxytech, whereby Lender owes monies to either, such amounts due and
owing thereunder at such time shall be applied as a credit against the amount of
the Advance (first against accrued interest, if any, and then against
principal), provided sums are still outstanding and payable under the Note and
OXIS is not then in bankruptcy as aforesaid and, in such case, if such amounts
for which Lender is obligated at least equal the amount of the Advance (plus
accrued interest if any) then all sums owed under this Loan Agreement shall be
deemed paid and this Agreement shall be fully performed and cease. Borrower, in
the case of any such set off and application, agrees to promptly notify Lender
thereof, provided that failure to give such notice shall not affect the validity
of such set off and application.
ARTICLE VI. EVENTS OF DEFAULT
SECTION 6.01 Events of Default
If any of the following events ("Events of Default") shall occur and be
continuing:
(a) Borrower shall fail to pay any principal of, or interest on,
the Note when due; or
(b) Any representation or warranty made by or for Borrower under
any Loan Document shall prove to have been incorrect in any material respect
when made and shall remain incorrect five days after written notice thereof
shall have been given to Borrower by the Lender; or
(c) Borrower shall fail to perform or observe (i) any term,
covenant or agreement contained in Sections 4.01(b)(iii), 4.01(c), 4.02, or 5.01
or (ii) any other material term, covenant or agreement contained in any Loan
Document on its part to be performed or observed
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and such failure shall remain unremedied for 10 days after written notice
thereof shall have been given to such Borrower by the Lender; or
(d) Borrower or any of its subsidiaries shall fail to pay any of
their respective debts (other than debt evidenced by the Note) when due (whether
by scheduled maturity, required prepayment, acceleration, demand, or otherwise),
if the failure to make such payment has the effect of causing the Lender to
lose its first priority lien position in any of the Collateral, subject only to
the following (the "Prior Liens"): the valid and perfected lien existing as of
the date hereof in favor of United States National Bank of Oregon, including its
lien which Borrower asserts is perfected on the Blue Bonnet CD; the security
interest existing as of the date hereof in favor of Alta-Berkeley L.P. II,
Innolion S.A., Sofinnova Capital F.C.P.R., Sofinnova S.A. and Finovelec S.A.,
in certain of Borrower's clinical diagnostic products and certain assets related
thereto (which security interest, by the terms of the Waiver and Consent, is
subordinated in favor of Lender); and the valid and perfected liens currently
established under French law; or
(e) Borrower makes a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against Borrower seeking
to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, or other similar official for it or
for any substantial part of its property; or Borrower shall take any corporate
or similar action to authorize any of the actions set forth above in this
subsection (e); or
(f) The Security Agreement after delivery thereof shall for any
reason, except to the extent permitted by the terms thereof, cease to create a
valid and perfected first priority security interest in Borrower's assets, as
therein agreed, in any of the Collateral purported to be covered thereby (the
"Collateral"), subject only to the Prior Liens; or
(g) The Collateral comprising Borrower's assets, in whole or
part, is seized or levied upon under any legal or governmental process against
Borrower or against the Collateral; or
(h) The loss of, substantial damage to, or destruction of, any
material portion of the Collateral comprising Borrower's assets;
then, and in any such event, the Lender may, by notice to Borrower, declare the
Note, all interest thereon and all other amounts payable under this Agreement or
any other Loan Document to be forthwith due and payable, whereupon the Note, all
such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by Borrower; provided, however, that in the
-------- -------
event of an actual or deemed entry of an order for relief with respect to
Borrower under the Federal Bankruptcy Code, the Note, all such interest and all
such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by Borrower.
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ARTICLE VII. MISCELLANEOUS
SECTION 7.01 Amendments, Etc.
No amendment or waiver of any provision of this Agreement or the Note,
nor consent to any departure by Borrower therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Lender and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
SECTION 7.02 Notices, Etc.
All notices and other communications provided for hereunder shall be in
writing (including telecopies or telegraphic communication) and mailed,
telecopied or telegraphed or delivered, if to OXIS and/or Bioxytech, at the
address of OXIS at 6040 North Cutter Circle, Suite 317, Portland, OR 97217,
Attention: President, telecopier no. (503) 283-4058; with copy to Bioxytech, in
the case of notice involving Bioxytech, at its address at 2 av. des Coquelicots,
94365 Bonneuil-Sur-Marne, France, Attention: President, telecopier no.
011-331-49800166; and if to the Lender, at its address at 32-34 rue Marbeuf,
75008 Paris, France, Attention: President, telecopier no. 011-331-53774133, with
a copy to Sanofi Winthrop, Inc., 90 Park Avenue, New York, NY 10016, Attention:
Vice President and General Counsel, telecopier no. (212) 551-4919; or, as to any
party, at such other address as shall be designated by such party in a written
notice to the other parties. All such notices and communications shall, when
mailed, telecopied or telegraphed, be effective when deposited in the mails,
telecopied or delivered to the telegraph company, respectively, except that
notices to the Lender pursuant to the provisions of Article I shall not be
effective until received by the Lender.
SECTION 7.03 No Waiver; Remedies
No failure on the part of the Lender to exercise, and no delay in
exercising, any right under any Loan Document shall operate as a waiver thereof;
nor shall any single or partial exercise of any right under any Loan Document
preclude any other or further exercise thereof or the exercise of any other
right. The remedies provided in the Loan Documents are cumulative and not
exclusive of any remedies provided by law.
SECTION 7.04 Accounting Terms
All accounting terms not specifically defined herein shall be construed
in accordance with United States generally accepted accounting principles
consistently applied, except as otherwise stated herein.
SECTION 7.05 Costs, Expense and Taxes
Borrower agrees to pay on demand all costs and expenses in connection
with the preparation, execution, delivery, filing, recording, administration and
modification and amendment, if any, of the Loan Documents and the other
documents to be delivered under the Loan Documents, including, without
limitation, the reasonable fees and out-of-pocket expenses of outside counsel
for the Lender with respect thereto and with respect to advising the Lender as
to its rights and responsibilities under the Loan Documents, provided, however,
-------- -------
that for purposes of OXIS' reimbursement obligation, such outside counsel fees
shall not exceed $5,000. Should the Lender,
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OXIS or Bioxytech institute any action to enforce this Agreement or any of its
provisions, the parties not prevailing in such action shall pay all reasonable
counsel fees and expenses incurred therein as shall be determined by the Court
or Tribunal having jurisdiction in the matter. In addition, Borrower shall pay
any and all stamp and other taxes and costs payable in connection with the
execution, delivery, filing and recording of the Loan Documents and the other
documents required to be delivered under the Loan Documents, and agree to save
the Lender harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or failing to pay such taxes and costs.
SECTION 7.06 Right of Set-off
The Lender is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any indebtedness
at any time owing by the Lender to or for the credit or the account of either of
Borrower or any of their respective subsidiaries against any and all of the
obligations of Borrower now or hereafter existing under the Loan Documents,
irrespective of whether or not the Lender shall have made any demand under such
Loan Document and although such obligations may be unmatured. The Lender agrees
promptly to notify Borrower after any such set-off and application, provided
--------
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Lender under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Lender may have.
SECTION 7.07 Binding Effect
This Agreement shall be binding upon and inure to the benefit of Borrower
and the Lender and Bioxytech and their respective successors and assigns, except
that neither Borrower nor Bioxytech shall have the right to assign any of their
respective rights hereunder or any interest herein (except as permitted under
Section 4.02(c)) without the prior written consent of the Lender, which consent
shall not be unreasonably withheld.
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SECTION 7.08 Governing Law
This Agreement and the Note shall be governed by, and construed in
accordance with, the laws of the State of Oregon.
SECTION 7.09 Severability
Invalidation of any of the provisions contained in this Agreement, or of
the application thereof to any party (e.g. Bioxytech), by judgment or court
order or other legal proceedings, shall not affect any of the other provisions
hereof or the application thereof to any other party or circumstances and the
same shall remain in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWER:
OXIS INTERNATIONAL, INC.
By /s/ Ray R. Rogers
------------------
Title Chairman of the Board of Directors
-----------------------------------
BIOXYTECH S.A.
By /s/ Anna D. Barker
-------------------
Supervisory Board Vice President
LENDER:
SANOFI S.A.
By /s/ Stevenson E. Ward
----------------------
Title Attorney-in-Fact
-----------------
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EXHIBIT A
PROMISSORY NOTE
$600,000 Dated: May 4, 1995
FOR VALUE RECEIVED, the undersigned, OXIS International, Inc., a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of Sanofi
S.A. (the "Lender") the principal sum of U.S.$600,000 on the date which is one
year from this date. The Borrower shall pay interest on the principal amount
hereof from time to time outstanding after the earlier to occur of (a) the date
six months from this date, or (b) the date of the first occurrence of an Event
of Default (as defined in the Loan Agreement), until such principal amount is
paid in full. Interest shall be payable on the final day when such principal
amount becomes due, at a fluctuating interest rate per annum in effect from
time to time equal at all times to 2% per annum (4% per annum from and after
said Event of Default) above the rate of interest announced publicly by
Citibank, N.A., in New York, New York, from time to time as its prime rate (the
"Prime Rate"). Each change in the fluctuating interest rate hereunder shall take
effect simultaneously with the corresponding change in the Prime Rate.
Both principal and interest are payable in lawful money of the United
States of America to the Lender c/o Sanofi, Inc., 90 Park Avenue, New York, New
York 10016, in same-day funds or as otherwise agreed by the Lender and the
Borrower. All payments made on account of the principal amount hereof shall be
recorded by the Lender and, prior to any transfer hereof, endorsed on the grid
attached hereto which is part of this Promissory Note.
This Promissory Note is the Note referred to in, and is entitled to the
benefits of, the Term Loan Agreement, dated as of May 2, 1995 (the "Loan
Agreement"), between the Borrower, Bioxytech S.A., and the Lender, and the
Security Agreement (as defined in the Loan Agreement). The Loan Agreement, among
other things, contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.
OXIS INTERNATIONAL, INC.
By
---------------------------------------
Title
------------------------------------
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EXHIBIT 23.1
CONSENT OF DELOITTE & TOUCHE LLP
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
OXIS International, Inc. (formerly DDI Pharmaceuticals, Inc.) and subsidiary on
Form S-3 of our report dated March 21, 1995, which included an explanatory
paragraph relating to the Company's ability to continue as a going concern,
appearing in the Annual Report on Form 10-K of OXIS International, Inc. for the
year ended December 31, 1994 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Portland, Oregon
July 13, 1995
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