<PAGE>
As filed with the Securities and Exchange Commission on August __, 1998
Registration No. 333-
__________
================================================================================
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 (I.R.S. Employer
incorporation 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
CHIEF EXECUTIVE OFFICER AND
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, LLP
60 SOUTH MARKET STREET
SAN JOSE, CALIFORNIA 95113
(408) 998-1952
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement as
determined by the Selling Securityholder.
-----------------------
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, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]
If the delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Amount
Amount Maximum Offering Proposed Of
To Be Price Maximum Aggregate Registration
Title Of Securities To Be Registered Registered Per Unit/(1)/ Offering Price/(1)/ Fee/(1)/
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock $0.001 par value/(2)/ 19,856,782 $ .65625 $ 13,031,013 $ 3,844.15 (3)
- ------------------------------------------------------------------------------------------------------------------------------------
Warrants to Purchase Common Stock $0.001 par value 9,928,391
====================================================================================================================================
</TABLE>
/(1)/ Estimated solely for the purpose of calculating the registration fee. The
registration fee is calculated pursuant to Rule 457(c), with respect to
the Common Stock and is based on the high and low prices as reported on
the Nasdaq National Market System as of August 18, 1998, and pursuant to
Rule 457(g)(3), which indicates that no separate registration fee is
required with respect to the warrants.
/(2)/ Includes 9,928,391 shares of Common Stock issuable upon exercise of
warrants to be registered hereby.
/(3)/ An aggregate of 1,330,126 shares of Common Stock of the issuer was
previously registered on Registration Statement No. 33-61087 on Form S-3
(as amended by Amendment No. 1 to such Registration Statement),
Registration Statement No. 333-5921 on Form S-3 (as amended by Amendment
No. 1, Amendment No. 2, and Amendment No. 3 to such Registration
Statement), and Registration Statement No. 333-18041 on Form S-3. An
aggregate of $1,000.11 was paid as the registration fee for registration
of such shares.
-1-
<PAGE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
contained in this Registration Statement is a combined Prospectus and also
relates to an aggregate of 220,000 shares of Common Stock registered on
Registration Statement No. 33-61087 on Form S-3 (as amended by Amendment No. 1
to such Registration Statement), an aggregate of 810,126 shares of Common Stock
registered on Registration Statement No. 333-5921 on Form S-3 (as amended by
Amendment No. 1, Amendment No. 2, and Amendment No. 3 to such Registration
Statement), and an aggregate of 300,000 shares of Common Stock registered on
Registration Statement No. 333-18041 on Form S-3.
-2-
<PAGE>
PROSPECTUS
OXIS INTERNATIONAL, INC.
21,186,908 SHARES OF COMMON STOCK ($.001 PAR VALUE)
WARRANTS TO PURCHASE 9,928,391 SHARES OF COMMON STOCK
This Prospectus relates to 9,928,391 shares of common stock, par value
$.001 (the "Common Shares") and warrants to purchase 9,928,391 shares of common
stock issued by the Company in connection with a private placement of Company
securities in 1998 (the "1998 Warrants"), of OXIS International, Inc. ("OXIS" or
the "Company") which are being offered and sold by certain securityholders of
the Company (the "Selling Securityholders"). This Prospectus also relates to the
issuance and resale of 9,928,391 shares of common stock upon exercise of the
1998 Warrants (the "1998 Warrant Shares") and the resale of 1,330,126 shares of
common stock upon the exercise of warrants issued prior to 1998 ("Earlier
Warrant Shares") collectively with the Common Shares and the 1998 Warrant
Shares, (the "Common Securities,") and collectively with the Common Shares, the
1998 Warrant Shares, and 1998 Warrants, (the "Securities"). If all of the 1998
Warrants and warrants to purchase the earlier Warrant Shares are exercised and
all of the 1998 Warrant Shares and Earlier Warrant Shares (collectively, the
"Warrant Shares") are issued, the Common Securities would represent
approximately forty-five percent (45%) of the issued and outstanding shares of
common stock of the Company ("Common Stock"). The Selling Securityholders,
directly or through agents, broker-dealers or underwriters, may sell the
Securities 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 or otherwise. The Selling Securityholders and any
agents, broker-dealers or underwriters that participate in the distribution of
the Securities may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"), and any commission
received by them and any profit on the resale of the Securities purchased by
them may be deemed to be underwriting discounts or commissions under the
Securities Act. The Company will not use underwriters or pay a commission in
connection with the issuance of the Warrant Shares. See "Selling
Securityholders," "Plan of Distribution," and "Use of Proceeds. "
The Common Stock of the Company is quoted on the Nasdaq National Market
under the symbol "OXIS." The last reported sales price of the Common Stock on
the Nasdaq National Market on August 18, 1998 was $.6875 per share.
___________________________
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" AT PAGE 5 OF THIS PROSPECTUS.
___________________________
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.
_______________________
CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995.
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE DISCUSSION IN THIS
PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION
27A OF THE SECURITIES ACT OF 1933, AS AMENDED, INCLUDING, BUT NOT LIMITED TO,
STATEMENTS AS TO THE FUTURE OPERATING RESULTS AND BUSINESS PLANS OF THE
COMPANY, THAT INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS
COULD DIFFER MATERIALLY FROM THOSE DISCUSSED HEREIN. FACTORS THAT COULD CAUSE
OR CONTRIBUTE TO SUCH DIFFERENCES ARE SET FORTH IN THE "RISK FACTORS" SECTION
BELOW, AS WELL AS THOSE DISCUSSED ELSEWHERE IN THIS PROSPECTUS AND IN ANY
DOCUMENTS INCORPORATED HEREIN BY REFERENCE OR ATTACHED AS EXHIBITS.
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 $46,844. See "Plan of Distribution." The
aggregate proceeds to the Selling Securityholders from the sale of the Common
Securities and 1998 Warrants will be the purchase price of the Common Securities
and 1998 Warrants sold less the aggregate agents' commissions and underwriters'
discounts, if any. The aggregate proceeds to the Company, if any, in connection
with the sale of the Securities hereunder, will be the exercise price of the
1998 and Earlier Warrants (a maximum of $14,066,610 in the aggregate assuming
the exercise of all such warrants).
The Company has agreed to indemnify certain of the Selling Securityholders
and certain other persons against certain liabilities, including liabilities
under the Securities Act.
The date of this Prospectus is August __, 1998
[RED HERRING APPEARS HERE]
<PAGE>
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 public reference facilities maintained by the Commission at its offices
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the regional offices of the Commission located at Seven World Trade
Center, 13th Floor, New York, New York 10048 and at Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials may also be obtained by mail from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. Additionally, the Commission maintains a Web site
containing reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The address
for such Web Site is http://www.sec.gov.
In addition, the Common Stock is quoted on the Nasdaq National Market
("Nasdaq") under the symbol "OXIS" and reports, proxy statements and other
information concerning the Company may also be inspected at the offices of the
National Association of Securities Dealers, Inc. ("NASD"), 1735 K Street, N.W.,
Washington, DC 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with all amendments, exhibits, schedules, and supplements thereto,
the "Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Securities offered hereby. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement, as
permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the Securities offered hereby,
reference is hereby made to the Registration Statement and the Exhibits and
Schedules thereto, which may be inspected and copied at the Public Reference
Section of the Commission referred to above. Statements contained in this
Prospectus as to the contents of any contract or other document are not
necessarily complete, and in each instance reference is made to the full text of
such contract or document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission, each such statement being qualified in all
respects by such reference.
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, 1997, including all material incorporated by reference
therein, filed with the Commission on March 26, 1998.
(ii) The Company's Current Report on Form 8-K filed with the Commission
on July 6, 1998.
(iii) The Company's Current Report on Form 8-K/A filed with the Commission
on March 12, 1998.
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<PAGE>
(iv) The Company's Current Report on Form 8-K filed with the Commission
on March 30, 1998.
(v) The Company's Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1998 as filed with the Commission on May 15, 1998.
(vi) The Company's Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 1998 as filed with the Commission on August 7, 1998.
(vii) The Company's Current Report on Form 8-K filed with the Commission
on January 15, 1998.
(viii) 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 of Securities hereby 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 in any subsequently-filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement in this
Prospectus or any other earlier filed document. 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 of Securities, 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.
-3-
<PAGE>
THE COMPANY
OXIS International, Inc. ("OXIS" or the "Company") is a drug discovery and
health products company focused on the development of novel therapeutics,
diagnostics and related products to combat diseases associated with damage from
free radicals and reactive oxygen species ("ROS") diseases of oxidative stress.
The Company's commercial activities are carried out by its wholly-owned
subsidiary, OXIS Health Products, Inc. OXIS Health Products, Inc. develops,
manufactures and sells research diagnostics, commercial therapeutic drug
monitoring products, instruments, fine chemicals, bovine superoxide dismutase
("SOD") for human and veterinary use, and reagents through an international
distribution network and directly through its catalog.
The Company's drug development activities are carried out by a second
wholly-owned subsidiary, OXIS Therapeutics, Inc. The Company's lead therapeutic
drug candidate, BXT-51072, is currently being evaluated in a Phase II clinical
trial in inflammatory bowel disease ("IBD"). Two other therapeutic programs are
in the preclinical stage of development.
OXIS was formed in 1994 through the simultaneous acquisition of Bioxytech,
S.A. (now known as OXIS International S.A) and merger with International
BioClinical, Inc. by DDI Pharmaceuticals, Inc. This transaction was followed by
the acquisition of Therox Pharmaceuticals, Inc. in 1995. In December 1997, the
Company acquired Innovative Medical Systems Corp., now known as "OXIS
Instruments".
The Company was initially incorporated in 1965 as a California corporation,
Diagnostic Data, Inc., reincorporated as a Delaware corporation in 1974, and
changed its name to DDI Pharmaceuticals in 1985. The Company changed its name
in 1994 to OXIS International, Inc. OXIS is a publicly held company (NASDAQ:
OXIS, Nouveau Marche: OXIS) and has its headquarters in Portland, Oregon,
instrument manufacturing facilities near Philadelphia, Pennsylvania and research
facilities located outside of Paris, France.
-4-
<PAGE>
RISK FACTORS
Except for the historical information contained herein, the discussion in
this Prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, including, but not
limited to, statements as to the future operating results and business plans of
the Company, the successful development of therapeutic products, the entering
into of strategic partnerships and the raising of adequate working capital that
involve risks and uncertainties. The Company's actual results could differ
materially from those discussed herein. Factors that could cause or contribute
to such differences include, but are not limited to, the risks discussed below,
as well as those discussed elsewhere in the Registration Statement and in any
documents incorporated therein by reference. In addition to the other
information in the Registration Statement and in any documents incorporated
therein by reference, the following factors should be considered carefully in
evaluating an investment in the Securities offered hereby.
NEED FOR ADDITIONAL FINANCING
- -----------------------------
The Company has incurred losses in each of the last five years. As of
December 31, 1997, the Company had an accumulated deficit of approximately
$38,000,000. The Company expects to incur operating losses for the foreseeable
future. The Company currently does not have sufficient capital resources to
complete the Company's contemplated development programs and no assurances can
be given that the Company will be able to raise such capital on terms favorable
to the Company or at all. The unavailability of additional capital could cause
the Company to cease or curtail its operations and/or delay or prevent the
development and marketing of the Company's potential products.
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
research and diagnostic assays, instruments, superoxide dismutase ("SOD") for
human and veterinary use, and fine chemicals, the Company must successfully
partner, develop, obtain regulatory approval for and market or sell its
potential therapeutic products to achieve profitable operations. The
preclinical work for one potential new therapeutic product is completed, and the
clinical development stage has commenced. 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.
FUTURE PROFITABILITY UNCERTAIN
- ------------------------------
The Company expects to incur operating losses for the foreseeable future.
The Company's research and development expenses will increase as the Company
continues human clinical testing. These losses and expenses 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, 1997 included
an explanatory paragraph referring to the Company's
-5-
<PAGE>
ability to continue as a going concern. The Company anticipates that it will
expend significant capital resources in product research and development and in
human clinical trials. Capital resources may also be used for the acquisition of
complementary businesses, products or technologies. The Company's future capital
requirements will depend on many factors, including continued scientific
progress in its research and development programs; the magnitude of such
research and development programs; the success of preclinical and clinical
trials; the costs associated with the scale-up 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. No
assurances can be given that the Company will be able to raise sufficient
capital to address its future requirements on terms favorable to the Company or
at all.
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
pharmaceutical and/or biotechnology companies to develop and market these
products. To date, the Company has not established such business alliances and
there can be no assurance that the Company's effort to develop such business
alliances will be successful.
Sales of bulk SOD to the Company's Spanish licensee comprised 31% of the
Company's revenues in 1997. Future sales of bulk SOD are largely dependent on
the needs of the Company's Spanish licensee. The Company does not expect to
make any significant sales of bulk SOD during 1998, and there are no assurances
that the Spanish licensee will order additional SOD for delivery in subsequent
years.
FAILURE TO PROTECT TECHNOLOGY COULD ADVERSELY AFFECT RESULTS;
POTENTIAL CLAIMS OF PATENT INFRINGEMENT; EXPIRATION OF PATENTS
- --------------------------------------------------------------
The Company's success will depend in part on its proprietary products and
information. While the Company 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 patents will be
issued on certain 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 the Company.
In addition, the Company's products may be alleged to have infringed third
parties' patent rights. In the event of an infringement claim, 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 assurance 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.
Although the Company continues to have unpatented trade secrets and know-
how, substantially all of the Company's important U.S. and foreign patents
regarding SOD inventions (other than its recently developed, long-acting SOD
derivatives) have expired. Expiration of the Company's patents may enable other
companies to benefit from research and development efforts of the Company (but
such other companies would not receive the benefits of the Company's unpatented
trade secrets and know-how or unpublished preclinical or clinical data). Such
other companies would still be required in some countries to expend considerable
resources to conduct preclinical studies and clinical studies of their own
-6-
<PAGE>
pharmaceutical preparations of SOD and to seek and secure governmental approval
to market such preparations.
GOVERNMENT REGULATION; PRODUCT CLEARANCE AND APPROVAL UNCERTAIN
- ---------------------------------------------------------------
As with other companies in its industry, the Company's 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, 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 prior FDA review, oversight and the FDA's
Good Clinical Practice requirements. Clinical trials may require large numbers
of test subjects, complex protocols and possibly lengthy follow-up periods. The
Company 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, the Company 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 the Company's products.
Delays in regulatory approvals that may be encountered by any of the Company's
possible joint development partners and licensees could adversely affect the
Company's ability to receive any future royalties or other revenues. There can
be no assurance that 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 withdraw 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. No assurances can be given that the Company will receive FDA
and other required approvals necessary to market any drugs developed by the
Company.
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 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
-7-
<PAGE>
infectious disease agents, are or may be applicable to the Company's activities.
These laws and regulations 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, which may impose substantial additional costs and
burdens. The requirements governing the conduct of clinical trials, marketing
authorization, pricing and reimbursement vary widely from country to country.
Many countries also impose product standards, packaging requirements, labeling
requirements and import restrictions on drugs. Furthermore, the foreign
regulatory approval process may include all of the risks associated with FDA
approval set forth above and no assurances can be given that such approvals will
be obtained by the Company.
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. The Company currently has only limited insurance for its
clinical trials. Further, there can be no assurance that the Company 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 the Company. There can
also be no assurance that the Company 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 addition, these and other
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<PAGE>
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.
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 Transcend
Therapeutics, Inc., formerly Free Radical Sciences, Inc. ("Transcend
Therapeutics") and Centaur. Transcend Therapeutics is testing a drug called
procysteine for use in acute respiratory distress syndrome and other diseases
and Centaur is developing molecules called "spin traps" for the treatment of
diseases of the central nervous system. Natterman/Rhone Poulenc Rorer and
Daiichi are also developing glutathione peroxidase mimics.
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 should 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 and sell them at favorable prices. In addition,
certain of the Company's competitors may achieve product commercialization or
patent protection prior to the Company.
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. Market
position for certain 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. Two competitors in the area of oxidative stress testing are Randox
Laboratories, based in the United Kingdom, and Pantox Laboratories, based in San
Diego, California, in the United States.
MANUFACTURING/DEPENDENCE ON OTHERS
- ----------------------------------
Certain of the Company's products, and raw materials used in its products,
are produced by independent third parties. 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. The Company believes that its current third-party
suppliers have sufficient manufacturing capacity to expand production, if
necessary, for the foreseeable future. The Company has established a quality
-9-
<PAGE>
control program, including a set of standard documentation procedures intended
to ensure that, where required, the Company's products are manufactured in
accordance with cGMPs. 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.
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. Other than buying and selling
bulk SOD in a single currency, the Company does not limit its foreign exchange
risk. 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.
INTERNATIONAL SALES
- -------------------
The Company expects that international sales will continue to account for a
substantial portion of the Company's revenues for the foreseeable future. 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. Ray R. Rogers, the Company's
Chairman and Chief Executive Officer has extensive experience in the
structuring, financing and management of small businesses. The expertise of
Humberto V. Reyes, President of the Health Products subsidiary, who joined the
Company in 1997, will be critical to the development and growth of this
subsidiary. Timothy C. Rodell, M.D., the President of OXIS International S.A.
and the OXIS Therapeutics subsidiary, joined the Company in March 1996. Dr.
Rodell's clinical experience will be critical in helping the Company design,
submit and initiate clinical trial protocols in the United States. The loss of
key employees 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 employees.
-10-
<PAGE>
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 the Company, have been volatile.
Announcements of technological innovations or new commercial products by the
Company 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 the Company, regulatory developments in both the United
States and foreign countries and public concern as to the safety of
biotechnology or 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. The Company has not paid any
cash dividends since its inception, and it does not anticipate paying cash
dividends in the foreseeable future.
The Common Stock is traded over the Nasdaq National Market ("Nasdaq") and
Le Nouveau Marche. Le Nouveau Marche began operation in February 1996 and,
accordingly, has a limited operating history. There can be no assurance that Le
Nouveau Marche will be a stable or liquid market for shares or that fluctuation
of share price on Le Nouveau Marche will not have an impact on the price of
Common Stock listed on Nasdaq.
As of July 31, 1998, the Company had 36,234,510 shares of Common Stock
outstanding and 1,236,967 shares of preferred stock outstanding. Up to a maximum
1,595,324 shares of Common Stock may be issued on conversion of the Company's
preferred stock. 4,200,000 shares of Common Stock are reserved for issuance
under the Company's 1994 Stock Incentive Plan (the "Plan"). The Company has
options or warrants outstanding to purchase a total of approximately 15,310,224
shares of Common Stock of which options to purchase 2,679,634 shares have been
granted pursuant to the Plan. In addition, the Company has in the past issued
shares of Common Stock, or warrants exercisable in shares of Common Stock,
totaling approximately 18,590,697 shares of Common Stock, which are restricted
or control securities that can now be (or have been) resold into the public
markets under Rule 144 under the Securities Act. Pursuant to a Registration
Statement on Form S-8 filed with the SEC, the Company has registered for resale
all of the shares of Common Stock under the Plan. These shares may now be sold
into the public securities markets upon issuance under the Plan or exercise of
the options outside of the Plan.
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.
RISK THAT NASDAQ DELISTING PROCEDURES WILL BE INITIATED; POTENTIAL EFFECTS OF
- -----------------------------------------------------------------------------
DELISTING
- ---------
The Company has been notified by Nasdaq that, because the bid price of its
Common Stock is less than USD $1.00, its Common Stock is currently not in
compliance with the Nasdaq Marketplace Rule 4450(a)(5) relating to the Nasdaq
minimum bid price requirements. On about May 28, 1998, Nasdaq issued to the
Company a delisting letter (the "Delisting Letter") which identified the review
procedures available to the Company. The Delisting Letter provided the Company
with the opportunity to seek an Expedited Written Hearing from the Nasdaq in
which the Company could explain to the Nasdaq why, in the Company's view, the
Common Stock should remain listed on the Nasdaq National Market. The Company
sought an Expedited Written Hearing in June of 1998 in which it explained to the
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<PAGE>
Nasdaq, its intention to ask its stockholders to approve a reverse split of the
Common Stock so as to bring the bid price into compliance and is currently
awaiting a response from the Nasdaq. Subsequently the Company stockholders have
passed a proposal giving the Board of Directors the authority to effect such a
reverse split.
If the Common Stock of the Company ceases to be listed on the Nasdaq, such
failure to be listed could have a material adverse effect on the transferability
of the Company's Common Stock, the availability to the Selling Securityholders
to resell the Securities pursuant to the terms of this Registration Statement,
and the ability of the Warrant Shares to be included in this Prospectus as
part of this Registration Statement on Form S-3, and may have a material
adverse effect on the value of the Common Stock as well.
POSSIBLE DILUTIVE EFFECT OF OUTSTANDING PREFERRED STOCK
- -------------------------------------------------------
The Company has outstanding shares of Series C Preferred Stock which are
convertible into Common Stock based on a percentage of the prevailing trading
price of OXIS Common Stock at the time of conversion. Depending on the future
trading prices of OXIS Common Stock, the conversion of the outstanding shares of
the Company's Preferred Stock may have a dilutive affect on the issued and
outstanding Common Stock of the Company.
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, 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.
LITIGATION
- ----------
The Company and its subsidiaries are not aware of any litigation or
proceedings against it which could have a material adverse effect on it, its
financial position, assets or business. However, there can be no assurance that
the Company will not become involved in litigation in the future, or that any
such litigation will not have a material adverse effect on the Company or its
business.
-12-
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Securities
by the Selling Securityholders in the offering. The Company will receive a
maximum aggregate amount of $14,066,610 upon issuance of the Warrant Shares
following the exercise of the 1998 and Earlier Warrants (of which only the 1998
Warrant Shares are registered hereby for issuance to the Warrant holder). No
assurances can be given by the Company as to the exercise of any of any such
Warrants. Proceeds from the exercise of such Warrants, if any, are anticipated
to be used for working capital purposes and general corporate purposes, which
may include acquisitions and other business combinations as suitable
opportunities arise, or the repayment of indebtedness outstanding at such time.
GENERAL DESCRIPTION OF THE SECURITIES
The Selling Securityholders set forth herein may offer under this
Prospectus the Common Securities and/or 1998 Warrants. Each of the Securities
offered hereby involves a high degree of risk. See "Risk Factors" at page 5 of
this Prospectus.
DESCRIPTION OF THE COMMON STOCK
The Common Stock, including that Common Stock represented by the Common
Shares and to be issued upon exercise of the 1998 and Earlier Warrants, is
registered pursuant to Section 12 of the Exchange Act of 1934, and the
description thereof set forth therein is incorporated by reference herein.
DESCRIPTION OF THE 1998 WARRANTS
GENERAL
- -------
The following statements with respect to the 1998 Warrants are summaries of,
and subject to, the detailed provisions of the Warrant to Purchase Common Stock
entered into by the Company and each of the Selling Securityholders (each a
"Warrant Agreement," collectively the "Warrant Agreements"). Each of the
Warrant Agreements was entered into by and between the Company and each
respective Selling Securityholder in connection with the private placement (the
"Private Placement") by the Company to the Selling Securityholders of units
consisting of one share of Common Stock and one warrant to purchase a share of
Common Stock which took place in 1998. The Private Placement was effected
pursuant to the form of Common Stock and Warrant Subscription Agreement (the
"Subscription Agreement"). The shares of Common Stock purchased in the Private
Placement were priced at the closing price of the Company's Common Stock as
quoted on the Nasdaq National Market for the trading day prior to the signing of
each Subscription Agreement. The 1998 Warrants issued pursuant to any such
Subscription Agreement were issued pursuant to the terms of the Warrant
Agreement, and have an exercise price equal to 120% of the per share price of
the Common Stock sold pursuant to each Subscription Agreement.
-13-
<PAGE>
NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF 1998 WARRANTS; NUMBER
- --------------------------------------------------------------------------------
OF 1998 WARRANTS OUTSTANDING
- -------------------------
In the aggregate, 9,928,391 shares of Common Stock were placed with the
Selling Securityholders in the Private Placement at prices ranging from $0.875
per share to $1.125 per share. Accordingly, 1998 Warrants to purchase 9,928,391
shares of Common Stock were issued at exercise prices between $1.05 and $1.35.
As of the date of this Registration Statement all such 1998 Warrants were
outstanding.
Time Period during which 1998 Warrants May Be Exercised
- -------------------------------------------------------
Under the Warrant Agreements, the 1998 Warrants may not be exercised until
after the first anniversary of their date of issuance. Thereafter, the 1998
Warrants may be exercised pursuant to the terms of exercise provided in the
Warrant Agreements, which terms are described below, until the Expiration Date,
as defined in each Warrant Agreement. In each of the Warrant Agreements, the
Expiration Date is the fifth anniversary of the issuance date of the 1998
Warrants issued thereunder, which dates range from April 28, 2003 to July 24,
2003.
Procedure for Exercise of 1998 Warrants
- ---------------------------------------
In addition to providing that the 1998 Warrant may be exercised, in whole or
in part, at any time during normal business hours on or after the opening of
business on the first anniversary of its date of issuance and prior to the close
of business on the Expiration Date, as discussed above, the Warrant Agreements
provide that the 1998 Warrants may be exercised by the holder thereof then
registered on the books of the Company, in whole or from time to time in part
(except that no 1998 Warrants shall be exercisable as to fractional shares) by
(i) delivery of a written notice, in the form of the Subscription Form attached
as Exhibit A to each such 1998 Warrant, of such holder's election to exercise
the 1998 Warrant, which notice shall specify the number of Warrant Shares to be
purchased, (ii) payment to the Company of an amount equal to the 1998 Warrant
exercise price multiplied by the number of Warrant Shares as to which the 1998
Warrant is being exercised (plus any applicable issue or transfer taxes) in cash
or by certified or official bank check, and (iii) the surrender of the 1998
Warrant, properly endorsed, at the principal office of the Company in Portland,
Oregon (or at such other agency or office of the Company as the Company may
designate by notice to the holder thereof); provided, that if such Warrant
Shares are to be issued in any name other than that of the registered holder of
the 1998 Warrant, such issuance shall be deemed a transfer and the provisions
relating to transferability shall be applicable.
Further, upon exercise of a 1998 Warrant, unless the rights represented by a
1998 Warrant shall have expired or have been fully exercised, the Company shall
issue a new 1998 Warrant identical in all respects to the 1998 Warrant exercised
except (x) it shall represent rights to purchase the number of Warrant Shares
purchasable immediately prior to such exercise under the 1998 Warrant exercised,
less the number of Warrant Shares with respect to which such 1998 Warrant was
exercised, and (y) the holder thereof shall be deemed to have become the holder
of record of such Warrant Shares immediately prior to the close of business on
the date on which the 1998 Warrant was surrendered and payment of the amount due
in respect of such exercise and any applicable taxes was made.
-14-
<PAGE>
ADJUSTMENTS TO THE EXERCISE PRICE
- ---------------------------------
The Warrant Agreements provide that in case the Company shall at any time
subdivide its outstanding shares of Common Stock into a greater number of shares
or issue a stock dividend or make a distribution with respect to outstanding
shares of Common Stock payable in Common Stock, the exercise price in effect
immediately prior to such subdivision or stock dividend or distribution shall be
proportionately reduced and conversely, in case the outstanding shares of Common
Stock of the Company shall be combined into a smaller number of shares, the
exercise price in effect immediately prior to such combination shall be
proportionately increased in each case by multiplying the then effective
exercise price by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such action and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after such action, and the product so obtained shall thereafter be
the new exercise price.
Upon each adjustment of the exercise price as provided above, the registered
holder of the 1998 Warrant shall thereafter be entitled to purchase, at the
exercise price resulting from such adjustment, the number of shares obtained by
multiplying the exercise price in effect immediately prior to such adjustment by
the number of shares purchasable pursuant to the terms of the Warrant Agreement
immediately prior to such adjustment and dividing the product thereof by the
exercise price after such adjustment.
Upon any adjustment of the exercise price, the Company shall give notice
thereof to the registered holder of a 1998 Warrant, which notice shall state the
exercise price in effect after such adjustment and the increase, or decrease, if
any, in the number of shares purchasable at the exercise price upon the exercise
of the 1998 Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based. In the event of
a merger, consolidation or reorganization of the Company with or into another
corporation or corporations in which the Company is not the surviving entity
(other than a mere reincorporation transaction), a sale of all or substantially
all of the assets of the Company, or a transaction in which the Company issues
shares representing more than fifty percent (50%) of the voting power in the
Company immediately after giving effect to such transaction, the Company shall
give notice thereof to the registered holder of the 1998 Warrant at least ten
(10) business days prior to the consummation of such transaction.
-15-
<PAGE>
SELLING SECURITYHOLDERS
The following table sets forth the names of the Selling Securityholders,
the number of shares of Common Shares, Warrants and Warrant Shares held by the
Selling Securityholders as of July 31, 1998, which may be offered for resale
pursuant to this Prospectus. This information is based upon information
contained on the stock and warrant transfer records of the Company. Because the
Selling Securityholders may offer all, some or none of their Common Shares,
1998 Warrants, or Warrant Shares no definitive estimate as to the number any of
the Common Shares, 1998 Warrants, or Warrant Shares that will be held by the
Selling Securityholders after such offering can be provided, and the following
table has been prepared on the assumption that all Securities under this
Prospectus will be sold.
The table also indicates the percentage of outstanding Common Stock of the
Company represented by the Common Securities held by each Selling
Securityholder.
<TABLE>
<CAPTION>
1998 Total Common % of
Earlier Warrant Securities Outstanding
Common Shares Warrant 1998 Shares Offered for Common Stock
Selling Securityholder/(1)/ Shares Warrants /(2)/ Resale /(3)/
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alka Insurance 571,500 571,500 571,500 1,143,000 1.58%
Centro Internationale Handelsbank AG 171,400 171,400 171,400 342,800 *
Credit Lyonnais (Suisse) S.A. 300,000 300,000 300,000 600,000 *
Credit Suisse Equity Fund (c/o nominee 2,300,000 2,300,000 2,300,000 4,600,000 6.35%
Rush & Co.)
Creditanstalt Bankverein, Vienna 457,143 457,143 457,143 914,286 1.26%
J. Henry Schroder Bank AG 114,286 114,286 114,286 228,572 *
Oltramare 450,000 450,000 450,000 900,000 1.24%
Park Place Capital Limited 571,429 571,429 571,429 1,142,858 1.59%
Pictet & Cie 2,285,714 2,285,714 2,285,714 4,571,428 6.31%
Raebourne Merlin Life Sciences Investment 342,857 342,857 342,857 685,714 *
Trust
S.R. One Limited 889,062 150,000 889,062 889,062 1,928,124 2.86%
Swiss Reinsurance Company 900,000 900,000 900,000 1,800,000 2.48%
Teacher's Pension Fund of Berne 575,000 575,000 575,000 1,150,000 1.59%
Capital Ventures International 960,126 960,126 2.58%
Russell E. Teasdale 220,000 220,000 *
TOTAL 9,928,391 1,330,126 9,928,391 9,928,391 21,186,908
</TABLE>
* less than 1% of the issued and outstanding Common Stock of the Company.
-16-
<PAGE>
/(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 Securities beneficially owned.
/(2)/ The Company is offering pursuant to the terms of this Prospectus
9,928,391 shares of its Common Stock to the holders of the 1998
Warrants upon exercise of the 1998 Warrants.
/(3)/ The percentage of outstanding common stock is computed without regard to
the 1998 Warrant Shares, since the 1998 Warrants are not exercisable
within 60 days.
PLAN OF DISTRIBUTION
The Company is registering the Common Shares, 1998 Warrants and 1998
Warrant Shares offered by the Selling Securityholders hereunder pursuant to the
terms of Registration Rights Agreements entered into between April 28, 1998 and
May 7, 1998 (the "1998 Registration Rights Agreements"), in connection with the
Company's and the Selling Securityholders' entry into the Subscription
Agreements. The Company is also registering 1998 Warrant Shares for issuance to
Warrant holders upon exercise of the Warrants. In addition, the Company is
registering the resale of the Earlier Warrant Shares pursuant to (i) the terms
of certain warrants dated March 13, 1987 through August 21, 1988 ("Management
Warrants"), (ii) the Registration Rights Agreement entered into on May 16, 1996
with respect to warrants to purchase Common Stock issued in connection with
issuance of the Company's Series D Convertible Preferred Stock ("Series D
Warrants"), and (iii) the Registration Rights Agreement entered into on October
11, 1996 with respect to warrants to purchase Common
Stock issued in connection with the issuance of the Company's Secured
Convertible Term Notes ("Term Note Warrants").
Pursuant to the terms of the 1998 Registration Rights Agreements, the
Company agreed to use commercially reasonable efforts to file with the
Commission, on or before the date thirty (30) days following the date of the
final closing of the sale of securities pursuant to the Subscription Agreements
a registration statement under the Securities Act covering the resale of the
Common Shares, the 1998 Warrants and the 1998 Warrant Shares. The Company also
agrees to (i) use its commercially reasonable best efforts to cause a
registration statement filed with respect to the registrable securities to
become effective, and, keep such registration statement effective for up to one
hundred eighty (180) days; (ii) prepare and file with the Commission such
amendments and supplements to such a registration statement and the prospectus
used in connection therewith as may be necessary to comply with the provisions
of the Securities Act with respect to the disposition of all securities covered
by such a registration statement; (iii) furnish to each holder of the
registrable securities (a "Holder") such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of securities owned by them; and (iv) use its
commercially reasonable best efforts to register and qualify the securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as shall be reasonably requested by a majority of the
Holders, provided, however, that the Company is not required under the
Registration Rights Agreements or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions.
Pursuant to the terms of the applicable Registration Rights Agreement
respecting the Series D Warrants and the Term Note Warrants, the Company is
required to cause a registration statement covering the resale of the Common
Stock underlying such warrants to be declared effective and to keep such
registration statement effective until all such shares of Common Stock have been
sold, or until such shares may be freely sold without being registered under the
Securities Act. The holders of the
-17-
<PAGE>
Management Warrants, pursuant to the terms of the Management Warrants, are
entitled to have the resale of the Common Stock underlying their warrants
included in any registration statement filed by the Company.
The Common Shares, 1998 Warrants and 1998 and Earlier Warrant Shares
offered hereby may be sold from time to time by the Selling Securityholders, 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 Common Shares, 1998 Warrants
and 1998 and Earlier Warrant Shares may be sold to or through one or more
broker-dealers, acting as agent or principal in underwritten offerings, block
trades, agency placements, short sales, exchange distributions, brokerage
transactions or otherwise, or in any combination of the foregoing. The 1998 and
Earlier Warrant Shares to be offered hereunder will be sold by the Company to
the holders of the warrants upon exercise of such warrants, and the 1998 Warrant
Shares will be registered shares upon issuance by the Company pursuant to the
terms of this Prospectus.
The Company is bearing the costs relating to the registration of the
Securities offered hereby. In connection with any transaction involving Common
Shares, 1998 Warrants and 1998 and Earlier Warrant Shares, broker-dealers or
others may receive from the Selling Securityholders, 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. Such
compensation shall be paid by the Selling Securityholders. Broker-dealers and
any other persons participating in a distribution of the Common Shares, 1998
Warrants, and 1998 and Earlier Warrant Shares 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 Securities Act.
Any or all of the sales or other transactions involving the Common Shares,
1998 Warrants and 1998 and Earlier Warrant Shares described above, whether
effected by the Selling Securityholders, any broker-dealer or others, may be
made pursuant to this Prospectus. In addition, any Common Shares, 1998 Warrants
or 1998 and Earlier Warrant Shares that qualify for sale by a Selling
Securityholder 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 Shares, 1998 Warrants and 1998 and Earlier Warrant Shares
may be sold by Selling Securityholders in such jurisdictions only through
registered or licensed brokers or dealers. In addition, the Securities 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 Securityholders have agreed, and hereafter may
further agree, to indemnify certain persons, including, respectively, the
Selling Securityholders and the Company and its officers and directors, and
legal counsel as well as, respectively, persons controlling the Selling
Securityholders and the Company, and the underwriters for such Selling
Securityholders, broker-dealers or others, against certain liabilities in
connection with any offering of the Securities, including liabilities arising
under the Securities Act.
LEGAL MATTERS
The validity of the Securities offered hereby will be passed upon for the
Company by Jackson Tufts Cole & Black, LLP, San Jose, California. Jackson Tufts
Cole & Black, LLP is the beneficial owner of options to purchase 35,000 shares
of the Common Stock of the Company.
-18-
<PAGE>
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference from the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997, 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 relating to the Company's ability to continue as a going
concern) and the financial statements of Innovative Medical Systems Corp.
incorporated by reference in this Prospectus from the Company's Current Report
on Form 8-K/A filed with the Commission on March 12, 1998, have been audited
by Albertjohn DePalantino & Co. The financial statements have been so
incorporated in reliance upon the reports of such firms given upon their
authority as experts in accounting and auditing.
INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company,
the Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
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, IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED TO DO SO OR TO
ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION.
-19-
<PAGE>
TABLE OF CONTENTS
Page
----
AVAILABLE INFORMATION 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 2
THE COMPANY 4
RISK FACTORS 5
USE OF PROCEEDS 13
GENERAL DESCRIPTION OF THE SECURITIES 13
DESCRIPTION OF THE COMMON STOCK 13
DESCRIPTION OF THE 1998 WARRANTS 13
SELLING SECURITYHOLDERS 16
PLAN OF DISTRIBUTION 17
LEGAL MATTERS 18
EXPERTS 19
INDEMNIFICATION 19
-20-
<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 Securities being registered. All the amounts shown are
estimates except for the registration fee.
<TABLE>
<CAPTION>
<S> <C>
Registration fee $ 3,844
Blue sky qualification fees and expenses 5,000
Legal fees and expenses 30,000
Accounting fees and expenses 3,000
Miscellaneous 5,000
-------
$ 46,844
-------
</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 other liability, whether or not the Company would have
the power to so indemnify such person under the General Corporation
Law of Delaware."
-21-
<PAGE>
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.
Pursuant to Section 145 of the Delaware General Corporation 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.
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.
ITEM 16. EXHIBITS
(a) Exhibits.
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------ -----------------------
4.1 Form of Common Stock and Warrant Purchase Agreement(1)
4.2 Form of Warrant to Purchase Common Stock(1)
4.3 Form of Registration Rights Agreement(1)
5.1 Opinion of Jackson Tufts Cole & Black, LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Albertjohn DePalantino & Co.
23.3 Consent of Jackson Tufts Cole & Black, LLP. See
Exhibit 5.1
24.1 Power of Attorney. See page 24
- -------
(1) Incorporated by reference to the Company's Form 8-K Current Report filed
July 6, 1998.
-22-
<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.
-23-
<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 20th day of August, 1998.
OXIS INTERNATIONAL, INC.
By: /s/ RAY R. ROGERS
-----------------
Ray R. Rogers
Chairman of the Board and Chief Executive
Officer
(Principal Executive Officer)
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Ray R. Rogers and Jon S. Pitcher, or
either of them, as his true and lawful attorney-in-fact and agent 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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------- ----------------------------------------- --------------------------
<S> <C> <C>
/s/ RAY R. ROGERS Director; Chairman of the Board and August 20, 1998
- ---------------------------- Chief Executive Officer
Ray R. Rogers (Principal Executive Officer)
/s/ JON S. PITCHER Chief Financial Officer August 20, 1998
- ---------------------------- and Secretary
Jon S. Pitcher (Principal Financial and Accounting
Officer)
/s/ RICHARD A. DAVIS Director August 20, 1998
- ----------------------------
Richard A. Davis
/s/ JAMES MCCAMANT Director August 20, 1998
- ----------------------------
James McCamant
/s/ STUART LANG Director August 20, 1998
- ----------------------------
Stuart Lang
</TABLE>
-24-
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------- ----------------------------------------- --------------------------
<S> <C> <C>
/s/ DAVID NEEDHAM Director August 20, 1998
- ----------------------------
David Needham
/s/ A.R. SITARAMAN Director August 20, 1998
- ----------------------------
A.R. Sitaraman
/s/ TIMOTHY G. BIRO Director August 20, 1998
- ----------------------------
Timothy G. Biro
/s/ BRENDA D. GAVIN Director August 20, 1998
- ----------------------------
Brenda D. Gavin
</TABLE>
-25-
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
- -------------- ---------------------------------------------------------- ----------------------
<S> <C> <C>
4.1 Form of Common Stock and Warrant Purchase Agreement /(1)/
4.2 Form of Warrant to Purchase Common Stock /(1)/
4.3 Form of Registration Rights Agreement /(1)/
5.1 Opinion of Jackson Tufts Cole & Black, LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Albertjohn DePalontino & Co.
23.3 Consent of Jackson Tufts Cole & Black, LLP. Reference is
made to Exhibit 5.1
24.1 Power of Attorney. See page 24.
- -------------------------------------------------------------------------------------------------
</TABLE>
/(1)/ Incorporated by reference to the Company's Form 8-K Current Report filed
July 6, 1998.
-26-
<PAGE>
EXHIBIT 5.1
OPINION OF JACKSON TUFTS COLE & BLACK, LLP
August 19, 1998
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 19,856,782 shares of Common Stock, par value
$.001 per share, of the Company (the "Common Stock") and warrants to purchase
9,928,391 shares of Common Stock (the "Warrants"), it is our opinion that with
respect to (i) the 9,928,391 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 9,928,391 shares of Common Stock (as such number may
be adjusted pursuant to the terms of the Warrants) to be offered and sold
pursuant to the Registration Statement which are issuable upon exercise of the
Warrants, when issued in accordance with the terms of the Warrants, will be
legally issued, fully paid and nonassessable, and (iii) the Warrants are legally
issued by the Company, 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.
/s/JACKSON TUFTS COLE & BLACK, LLP
<PAGE>
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. and subsidiaries on Form S-3, of our report dated March
13, 1998, (which expresses an unqualified opinion and includes 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, 1997, 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
August 18, 1998
<PAGE>
EXHIBIT 23.2
CONSENT OF ALBERTJOHN DEPALANTINO & CO.
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
OXIS International, Inc. and subsidiaries on Form S-3, of our report dated
January 31, 1998, on the financial statements of Innovative Medical Systems
Corp. appearing in the Form 8-K/A Current Report of OXIS International, Inc.
dated March 12, 1998, and to the reference to us under the heading "Experts" in
the Prospectus, which is part of this Registration Statement.
ALBERTJOHN DEPALANTINO & CO.
Doylestown, Pennsylvania
August 19, 1998
