<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
----- Exchange Act of 1934 for the quarterly period ended June 30, 1998.
_____ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from _______ to _______.
Commission File Number O-8092
OXIS INTERNATIONAL, INC.
A Delaware corporation
I.R.S. Employer Identification No. 94-1620407
6040 N. Cutter Circle, Suite 317
Portland, OR 97217
Telephone: (503) 283-3911
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
------- -------
At June 30, 1998, the issuer had outstanding the indicated number of shares of
common stock: 36,234,510
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Six Months Ended
June 30 June 30
-------------------------- --------------------------
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Revenues:
Product sales $ 1,435,000 $ 717,000 $ 2,731,000 $ 1,844,000
Royalties and license fees 20,000 24,000 71,000 59,000
----------- ----------- ----------- -----------
Total revenues 1,455,000 741,000 2,802,000 1,903,000
Costs and expenses:
Cost of sales 1,053,000 472,000 2,312,000 1,244,000
Research and development 759,000 883,000 1,690,000 1,989,000
Selling, general and administrative 799,000 728,000 1,780,000 1,332,000
----------- ----------- ----------- -----------
Total costs and expenses 2,611,000 2,083,000 5,782,000 4,565,000
----------- ----------- ----------- -----------
Operating loss (1,156,000) (1,342,000) (2,980,000) (2,662,000)
Interest income 34,000 20,000 45,000 23,000
Interest expense (19,000) (42,000) (46,000) (72,000)
----------- ----------- ----------- -----------
Net loss $(1,141,000) $(1,364,000) $(2,981,000) $(2,711,000)
=========== =========== =========== ===========
Net loss per share - basic $ (.03) $ (.07) $ (.10) $ (.16)
=========== =========== =========== ===========
Weighted average number of
shares used in computation 32,916,584 19,884,092 30,806,956 17,012,334
=========== =========== =========== ===========
</TABLE>
1
<PAGE>
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,263,000 $ 1,290,000
Accounts receivable 1,259,000 2,011,000
Inventories 1,862,000 1,828,000
Prepaid and other 31,000 79,000
----------- -----------
Total current assets 6,415,000 5,208,000
Property and equipment, net 3,624,000 3,968,000
Technology for developed products
and custom assays, net 2,719,000 3,065,000
Other assets 407,000 334,000
----------- -----------
Total assets $13,165,000 $12,575,000
=========== ===========
</TABLE>
2
<PAGE>
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
(Unaudited)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 924,000 $ 1,423,000
Accounts payable 865,000 1,553,000
Accrued payroll, payroll taxes and other 826,000 1,181,000
Current portion of long-term debt 90,000 93,000
------------ ------------
Total current liabilities 2,705,000 4,250,000
Long-term debt due after one year 1,669,000 1,570,000
Shareholders' equity:
Preferred stock - $.01 par value; 15,000,000 shares
authorized:
Series B - 428,389 shares issued and outstanding
at June 30, 1998 (liquidation
preference of $1,500,000) 4,000 6,000
Series C - 807,878 shares issued and outstanding
at June 30, 1998 8,000 11,000
Series D - (Note 3) -- --
Common stock - $.50 par value; 50,000,000 shares
authorized; 36,234,510 shares issued and outstanding
at June 30, 1998 (Note 3) 18,117,000 14,298,000
Additional paid in capital 32,128,000 30,868,000
Accumulated deficit (41,155,000) (38,174,000)
Accumulated translation adjustments (311,000) (254,000)
------------ ------------
Total shareholders' equity 8,791,000 6,755,000
------------ ------------
Total liabilities and shareholders' equity $ 13,165,000 $ 12,575,000
============ ============
</TABLE>
3
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-------------------------------
1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net loss $(2,981,000) $(2,711,000)
Adjustments to reconcile net loss to cash
used for operating activities:
Depreciation and amortization 708,000 702,000
Changes in assets and liabilities:
Accounts receivable 747,000 260,000
Inventories (34,000) 94,000
Other current assets 47,000 (76,000)
Accounts payable (686,000) (595,000)
Customer deposits -- 142,000
Accrued payroll, payroll taxes and other (245,000) 44,000
----------- -----------
Net cash used for operating activities (2,444,000) (2,140,000)
Cash flows from investing activities:
Purchases of equipment (29,000) (17,000)
Other, net (91,000) (7,000)
----------- -----------
Net cash used for investing activities (120,000) (24,000)
Cash flows from financing activities:
Proceeds from issuance of notes 555,000 872,000
Proceeds from issuance of stock, net of related costs 5,231,000 6,240,000
Repayment of short-term borrowings (443,000) (950,000)
Repayment of long-term debt and capital lease obligations (54,000) (58,000)
Effective redemption of Series D Preferred Stock (700,000) --
----------- -----------
Net cash provided by financing activities 4,589,000 6,104,000
Effect of exchange rate changes on cash (52,000) (174,000)
----------- -----------
Net increase in cash and cash equivalents 1,973,000 3,766,000
Cash and cash equivalents - beginning of period 1,290,000 422,000
----------- -----------
Cash and cash equivalents - end of period $ 3,263,000 $ 4,188,000
=========== ===========
Non-cash transaction -- issuance of common
stock in exchange for cancellation of
notes and accrued interest $ 543,000 $ --
=========== ===========
</TABLE>
4
<PAGE>
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. FINANCIAL STATEMENTS AND CONDENSED NOTES
The unaudited consolidated financial statements, which have been prepared in
accordance with the instructions to Form 10-Q, do not include all of the
information and notes required by generally accepted accounting principles for
complete financial statements. All adjustments considered necessary by
management for a fair presentation have been included. Operating results for
interim periods are not necessarily indicative of the results that may be
expected for the full year.
An annual report (Form 10-K) has been filed with the Securities and Exchange
Commission ("Commission") for the year ended December 31, 1997. That report
contains, among other information, a description of the Company's business,
audited financial statements, notes to the financial statements, the report of
the independent auditors and management's discussion and analysis of results
of operations and financial condition. Readers of this report are presumed to
be familiar with that annual report.
2. INVENTORIES
Inventories are stated at the lower of cost or market. Cost has been
determined by using the first-in, first-out and specific identification
methods. Inventories at June 30, 1998 and December 31, 1997, consisted of the
following:
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
<S> <C> <C>
Raw materials $1,067,000 $1,319,000
Work in process 604,000 344,000
Finished goods 191,000 165,000
---------- ----------
Total $1,862,000 $1,828,000
========== ==========
</TABLE>
3. SHAREHOLDERS' EQUITY
In early May 1998, the Company completed the first closing of a private
placement of its common stock together with warrants to a series of
institutional investors. The units, consisting of one share of common stock
plus a warrant to purchase one share of common stock, were priced at the
NASDAQ closing price the day prior to the signing of the subscription
agreements relating to the purchase of such units. The prices per unit ranged
from $.875 to $1.125. In the first closing, 6,936,142 common shares and
warrants to purchase an equal number of common shares were issued in exchange
for gross proceeds of $5,716,000 in cash and conversion of $543,000 of short-
term notes and accrued interest payable. The exercise price of each warrant
is equal to 120% of the price paid per unit.
5
<PAGE>
The Company has agreed to file within 30 days of the closing of the private
placement a registration statement with the Commission concerning the resale
of the common shares, the warrants and the common shares issuable upon
exercise of the warrants.
The private placement was completed in July 1998 with a second closing
resulting in gross proceeds to the Company of $2,465,000 in cash and
conversion of $234,000 of short-term notes and accrued interest payable.
At the Company's Annual Meeting of Stockholders held on July 13, 1998, the
stockholders approved proposals which authorized an increase in the number of
shares of the Company's common stock to 95,000,000 and a reduction of the par
value of the Company's common stock to $.001. Following the Meeting, the
number of authorized shares of common stock was increased and the par value
was reduced, accordingly. The stockholders also approved a proposal
authorizing the Company's Board of Directors at its discretion to effect a
one-for-five reverse stock split at any time prior to the Company's 1999
Annual Meeting of Stockholders. The proposal concerning the reverse stock
split is intended to increase the bid price of the Company's common stock to
bring such bid price into compliance with the listing requirements of the
NASDAQ National Market System (requiring a bid price greater than $1). The
Company is currently seeking a waiver from the NASD allowing the Company's
common stock continued designation as a NASDAQ National Market security
pending the effectiveness of such a reverse split. As of the date of this
Report, the Company has not received a response from the NASD and has not
effected the reverse split.
During the second quarter of 1998, 214,194 shares of Series B Preferred Stock
were converted into 214,194 shares of common stock, and 213,819 shares of
Series C Preferred Stock were converted into 308,850 shares of common stock.
Also during the second quarter of 1998 the Company entered into a settlement
agreement with the holder of the remaining 700 outstanding shares of Series D
Preferred Stock whereby such holder and the Company released any and all
claims either may have against the other with respect to such Series D
Preferred Stock, and the Company paid the holder $700,000 cash. The holder
also agreed to return the Series D Preferred Stock to the Company upon the
Company's request. The Company recently requested the return of such Stock,
which the Company plans to cancel.
4. COMPREHENSIVE LOSS
On January 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income". The Company's
consolidated comprehensive loss was $1,139,000 and $1,482,000 for the three
months ended June 30, 1998 and 1997, respectively and $3,038,000 and
$2,950,000 for the six months ended June 30, 1998 and 1997, respectively. The
differences between the net loss reported in the consolidated statement of
operations and consolidated comprehensive net loss for the periods consisted
of changes in foreign currency translation adjustments.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital increased during the first half of 1998 from
$958,000 at December 31, 1997 to $3,710,000 at June 30, 1998. The increase in
the Company's working capital resulted primarily from the issuance of common
stock (net proceeds of $5,774,000), offset by the effect of the net loss for
the first half of 1998 ($2,981,000 less non-cash charges of $708,000) and a
$700,000 payment for the effective redemption of preferred stock.
Cash and cash equivalents increased from $1,290,000 at December 31, 1997 to
$3,263,000 at June 30, 1998.
The Company expects to continue to report losses in 1998 as the level of
expenses is expected to continue to exceed revenues. The Company can give no
assurances as to when and if its revenues will exceed its expenses. 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 that have the required resources to develop
and market certain of these products. There is no assurance that the
Company's effort to develop such business alliances will be successful.
In early May 1998, the Company completed the first closing of a private
placement of its common stock together with warrants to a series of
institutional investors. The units, consisting of one share of common stock
plus a warrant to purchase one share of common stock, were priced at the
NASDAQ closing price the day prior to the signing of the subscription
agreements relating to the purchase of such units. The prices per unit ranged
from $.875 to $1.125. In the first closing, 6,936,142 common shares and
warrants to purchase an equal number of common shares were issued in exchange
for gross proceeds of $5,716,000 in cash and conversion of $543,000 of short-
term notes and accrued interest payable. The exercise price of each warrant
is equal to 120% of the price paid per unit. The Company has agreed to file
within 30 days of the closing of the private placement a registration
statement with the Commission concerning the resale of the common shares, the
warrants and the common shares issuable upon exercise of the warrants.
The private placement was completed in July 1998 with a second closing
resulting in gross proceeds to the Company of $2,465,000 in cash and
conversion of $234,000 of short-term notes and accrued interest payable.
During the third quarter of 1998 the Company expects to pay two short-term
notes plus accrued interest aggregating approximately $360,000.
7
<PAGE>
INFORMATION SYSTEMS AND THE YEAR 2000
As is the case with most other companies using computers in their operations,
the Company is in the process of addressing the Year 2000 problem. The
Company is currently engaged in a project to review computer hardware and
software to determine whether they will consistently and properly recognize
the Year 2000. Certain of the Company's systems include hardware and packaged
software recently purchased from vendors who have represented that these
systems are already Year 2000 compliant.
Other hardware and software currently being used by the Company has been
identified by the Company as not being Year 2000 compliant, particularly
certain packaged software used in the Company's accounting systems. The
Company expects that upgrades to the software packages being used in its
accounting and manufacturing systems will be available from the vendors of
those packages. The cost of such upgrades, or replacement of certain
software packages and certain older hardware used in those systems has not
yet been determined, but is not expected to be material. Most of the
hardware and software replacements for accounting and manufacturing systems
expected are replacements that would have been made regardless of the Year
2000 issue.
The Company expects to complete its review of all of its systems, including
embedded technology in non-information technology systems, which might be
affected by the Year 2000 issue by the fourth quarter of 1999. The Company is
reviewing communications, security, and environmental monitoring and control
systems as well as certain laboratory and manufacturing equipment and
equipment manufactured for customers. The Company believes that, in the worst
likely case, such systems or components thereof can be replaced to make such
systems Year 2000 compliant, and that the cost for such replacements will not
be material.
The Company relies on a number of vendors and suppliers including banks,
telecommunications providers, transportation companies and other providers of
goods and services. The inability of certain of these third parties to
conduct their business for a significant period of time due to the Year 2000
issue could have a material impact on the Company's operations. The Company
does not have the resources to determine whether all such vendors and
suppliers are Year 2000 compliant. However, the Company expects that it could
find other vendors or suppliers if any of its current vendors or suppliers are
unable to continue to provide goods or services to the Company, but no
assurances can be given as to how long it will take to find substitute vendors
and suppliers.
8
<PAGE>
RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 1998
COMPARED WITH THREE MONTHS ENDED JUNE 30, 1997
REVENUES
The Company's revenues for the quarters ended June 30, 1998 and 1997 were as
follows:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Instrument sales and development $ 684,000 $ --
Diagnostic and research assays 604,000 611,000
Bovine superoxide dismutase (bSOD)
for research and human use -- 3,000
Palosein(R) (bSOD for veterinary use) 49,000 77,000
Fine chemicals and other 98,000 26,000
Royalties and license fees 20,000 24,000
---------- --------
$1,455,000 $741,000
========== ========
</TABLE>
Instrument sales and development revenues are generated by Innovative Medical
Systems Corp. ("IMS"), acquired by the Company on December 31, 1997. Because
the acquisition of IMS was recorded as a purchase, the revenues and expenses
of IMS are not included in the Company's consolidated results of operations
prior to 1998.
COSTS AND EXPENSES
Including amortization of purchase adjustments, cost of sales was 66% of
product sales for the second quarter 1997 and increased to 73% of product
sales for the second quarter of 1998. This increase in the cost of sales as a
percentage of sales is due primarily to the effect of fixed manufacturing
costs being spread over manufacturing and sales volume for the second quarter
of 1998 that is substantially less than the manufacturing capacity of the
Company's facilities since the acquisition of IMS.
Cost of sales in the second quarter of 1997 includes approximately $175,000 in
amortization of purchase adjustments relating to 1994 business acquisitions.
Costs of sales in the second quarter of 1998 includes approximately $196,000
in amortization of purchase
9
<PAGE>
adjustments relating to 1994 and 1997 business acquisitions. Excluding such
amortization the cost of product sales for the second quarter of 1997 was
approximately 41% of sales and the cost of sales for the second quarter of
1998 was approximately 60% of product sales.
Research and development expenses decreased from $883,000 in the second
quarter of 1997 to $759,000 in the second quarter of 1998. The decrease in
research and development expenses resulted primarily from cost reductions in
the second quarter of 1998 compared to the second quarter of 1997 in research
and development costs of the Company's French subsidiary.
Selling, general and administrative expenses increased from $728,000 in the
second quarter of 1997 to $799,000 in the second quarter of 1998. The
increase is primarily the result of $215,000 of selling, general and
administrative expenses of IMS in the second quarter of 1998. The increase
was partially offset by a $61,000 reduction in foreign exchange losses and a
$52,000 reduction in shareholder relations costs. The reduction in
shareholder relations costs was partially due to holding the annual meeting of
stockholders in the second quarter of 1997 and in the third quarter of 1998.
NET LOSS
The Company continued to experience losses in the second quarter of 1998. The
second quarter 1998 loss of $1,141,000 ($.03 per share-basic) was $223,000
less than the $1,364,000 ($.07 per share-basic ) loss for the second quarter
of 1997. The decrease in the net loss is primarily due to an increase of
$137,000 in gross margins from product sales and a decrease of $124,000 in
research and development expenses. The net loss per share-basic decreased
because of the decrease in net loss and increase in the number of common
shares outstanding.
10
<PAGE>
RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 1998
COMPARED WITH SIX MONTHS ENDED JUNE 30, 1997
REVENUES
The Company's revenues for the six-month periods ended June 30, 1998 and 1997
were as follows:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Instrument sales and development $1,493,000 $ --
Diagnostic and research assays 1,003,000 1,159,000
Bovine superoxide dismutase (bSOD)
for research and human use -- 415,000
Palosein(R) (bSOD for veterinary use) 93,000 231,000
Fine chemicals and other 142,000 39,000
Royalties and license fees 71,000 59,000
---------- ----------
$2,802,000 $1,903,000
========== ==========
</TABLE>
Instrument sales and development revenues are generated by IMS, acquired by
the Company on December 31, 1997.
Sales of bSOD in 1997 were almost entirely to one European customer and no
shipments were made to this customer during the first half of 1998. Future
sales of bulk bSOD continue to be largely dependent on the needs of this one
customer. The Company does not expect to make any significant sales of bulk
bSOD during the remainder of 1998. The Company's sales of bulk bSOD beyond
1998 are uncertain and difficult to predict and no assurances can be given
with respect thereto.
Palosein(R) sales in the first half of 1997 included a substantial sale to a
distributor in Germany, which has not been repeated in 1998.
COSTS AND EXPENSES
Including amortization of purchase adjustments, cost of sales was 67% of
product sales for the first half 1997 and increased to 85% of product sales
for the first half of 1998. This increase in the cost of sales as a
percentage of sales is due primarily to the effect of fixed manufacturing
costs being spread over manufacturing and sales volume for the first half of
1998 that is substantially less than the manufacturing capacity of the
Company's facilities since the acquisition of IMS. Management expects
manufacturing and sales volumes to increase in the second half of 1998,
resulting in a reduction of cost of sales as a percentage
11
<PAGE>
of sales; provided, however, that no assurances can be given that such an
increase will take place. Cost of sales as a percentage of sales was also
higher in the first half of 1998 as compared to the first half of 1997 due to
the reductions in sales of bSOD and Palosein(R), which contributed
approximately $200,000 more in profit margins in the first half of 1997 than
in 1998.
Cost of sales in the first half of 1997 includes approximately $355,000 in
amortization of purchase adjustments relating to 1994 business acquisitions.
Costs of sales in the first half of 1998 includes approximately $406,000 in
amortization of purchase adjustments relating to 1994 and 1997 business
acquisitions. Excluding such amortization the cost of product sales for the
first half of 1997 was approximately 48% of sales and the cost of sales for
the first half of 1998 was approximately 70% of product sales.
Research and development expenses decreased from $1,989,000 in the first half
of 1997 to $1,690,000 in the first half of 1998. The decrease in research and
development expenses resulted from cost reductions in the first half of 1998
of (1) $407,000 in research and development costs of the Company's French
subsidiary and (2) $192,000 for outside development contracts primarily
relating to the development of the Company's lead molecule, BXT-51072, which
is currently in Phase II clinical trials for ulcerative colitis. During the
first half of 1998, the Company's lead molecule was in the early part of a
Phase II clinical trial which did not require as much outside contract support
as earlier parts of the clinical trials. Costs relating to the Phase II
trials are expected to increase during the remainder of 1998 with an increase
in patient enrollment and increasing data analysis needs. These cost
reductions were partially offset by an increase of $298,000 in research and
development costs in the United States unrelated to the costs of clinical
trials. This increase consisted primarily of severance costs relating to a
staff reduction during the first quarter of 1998.
Selling, general and administrative expenses increased from $1,332,000 in the
first half of 1997 to $1,780,000 in the first half of 1998. The increase is
primarily the result of $433,000 of selling, general and administrative
expenses of IMS in the first half of 1998. Fees aggregating $51,000 in the
first half of 1998 for the ongoing listing of the Company's common stock on Le
Nouveau Marche and increased shares listed on NASDAQ National Market also
contributed in the increase in 1998.
NET LOSS
The Company continued to experience losses in the first six months of 1998.
The first half 1998 loss of $2,981,000 ($.10 per share-basic) was $270,000
more than the $2,711,000 ($.16 per share-basic ) loss for the first half of
1997. The increase in the net loss is primarily due to the decline in gross
margin from product sales and increased selling, general and administrative
costs. The net loss per share-basic decreased because of the increase in the
number of common shares outstanding.
12
<PAGE>
The Company plans to continue to invest in research and development activities
and incur marketing, sales and administrative expenses in amounts greater than
its anticipated near-term product margins, and, as a result, expects to incur
a substantial net loss for 1998. There can be no assurances given that the
Company will ever achieve profitable operations.
------------------------
Certain of the matters discussed in this Report such as management's future
sales expectations, the levels of future manufacturing volumes and possible
progress with respect to the Company's clinical trials are forward-looking
statements that involve risks and uncertainties, including the timely
development and market acceptance of new products, the impact of competitive
products and pricing, economic conditions, and other risks. These factors
could cause actual results to differ materially from those described in any
forward-looking statements.
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
(c) Sale of unregistered securities.
Between April 28 and May 8, 1998, the Company completed the first closing of a
private placement of its common stock together with warrants to a series of
institutional investors. The units, consisting of one share of common stock
plus a warrant to purchase one share of common stock, were priced at the
NASDAQ closing price the day prior to the signing of the subscription
agreements relating to the purchase of such units. The prices per unit ranged
from $.875 to $1.125. In the first closing, 6,936,142 common shares and
warrants to purchase an equal number of common shares were issued in exchange
for gross proceeds of $5,716,000 in cash and conversion of $543,000 of short-
term notes and accrued interest payable. The exercise price of each warrant
is equal to 120% of the price paid per unit. The Company has agreed to file
within 30 days of the closing of the private placement a registration
statement with the Commission concerning the resale of the common shares, the
warrants and the common shares issuable upon exercise of the warrants.
In connection with the sale of the foregoing securities, the Company paid a
commission of $400,091 to a placement agent. The securities were offered and
sold under the exemption from registration provided by Section 4(2) of the
Securities Act of 1993, as amended, and pursuant to Rule 506 promulgated
thereunder.
13
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits - See Exhibit Index on page 15.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OXIS International, Inc.
August 7, 1998 By /s/Ray R. Rogers
-------------------------------
Ray R. Rogers
Chairman and Chief Executive Officer
August 7, 1998 By /s/Jon S. Pitcher
-------------------------------
Jon S. Pitcher
Chief Financial Officer
14
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
Number Description of Document Number
<S> <C> <C>
27(a) Financial data schedule 15
</TABLE>
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1998
<PERIOD-START> APR-01-1998 JAN-01-1998
<PERIOD-END> JUN-30-1998 JUN-30-1998
<CASH> 3,263,000 3,263,000
<SECURITIES> 0 0
<RECEIVABLES> 1,259,000 1,259,000
<ALLOWANCES> 0 0
<INVENTORY> 1,862,000 1,862,000
<CURRENT-ASSETS> 6,415,000 6,415,000
<PP&E> 3,624,000 3,624,000
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 13,165,000 13,165,000
<CURRENT-LIABILITIES> 2,705,000 2,705,000
<BONDS> 0 0
0 0
12,000 12,000
<COMMON> 18,117,000 18,117,000
<OTHER-SE> (311,000) (311,000)
<TOTAL-LIABILITY-AND-EQUITY> 13,165,000 13,165,000
<SALES> 1,435,000 2,731,000
<TOTAL-REVENUES> 1,455,000 2,802,000
<CGS> 1,053,000 2,312,000
<TOTAL-COSTS> 1,053,000 2,312,000
<OTHER-EXPENSES> 759,000 1,690,000
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 19,000 46,000
<INCOME-PRETAX> (1,141,000) (2,981,000)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (1,141,000) (2,981,000)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (1,141,000) (2,981,000)
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</TABLE>
