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As filed with the Securities and Exchange Commission on July 7, 2000
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 (I.R.S. Employer
of 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)
____________________
Jon S. Pitcher
Vice President and Chief Financial Officer
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:
Thomas P. Palmer
Tonkon Torp LLP
888 S.W. 5th Avenue, Suite 1600
Portland, Oregon 97204
(503) 802-2018
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 stockholders.
____________________
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
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Proposed maximum Proposed maximum
Title of each class of Amount to be offering price aggregate Amount of
securities to be registered registered per unit (1) offering price (1) registration fee
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Common Stock, $0.001 par value 4,285,847 (2)(3) $1.94 8,314,543 $2,195.04
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 promulgated under the Securities Act of 1933, as
amended, and based on the high and low prices as reported on the Nasdaq
National Market as of June 29, 2000.
(2) Includes 2,908,898 shares of common stock issuable upon exercise of
outstanding warrants.
(3) This Registration Statement also covers such indeterminate number of
additional shares as may be issuable pursuant to Rule 416 as a result of
anti-dilution adjustments.
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 Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. These +
+securities may not be sold until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PRELIMINARY PROSPECTUS
OXIS INTERNATIONAL, INC.
4,285,847 Shares of Common Stock ($0.001 par value)
____________________
The Offering:
Shares of common stock offered by selling stockholders.......... 4,285,847
Offering Price........ The selling stockholders may offer the shares for
sale on the Nasdaq Stock Market at the market price
at the time of the sale. The selling stockholders
may also offer the shares in privately negotiated
transactions either at the market price at the time
of the sale, at a price related to the market price
or at a negotiated price. On June 30, 2000, the
closing sale price of OXIS common stock on the
Nasdaq Stock Market was $2.06 per share.
Nasdaq National Market Symbol................................... OXIS
Our common stock involves a high degree of risk. See "Risk Factors"
beginning on page 4
____________________
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
The date of this prospectus is _________________________, 2000.
This prospectus incorporates by reference important business and financial
information about OXIS not included in or delivered with this prospectus. You
may request a copy of all documents that are incorporated by reference in this
prospectus by writing or telephoning us at the following address: OXIS
International, Inc., 6040 N. Cutter Circle, Suite 317, Portland, Oregon 97217-
3935, Attn: Jon S. Pitcher, Chief Financial Officer; telephone number: (503)
283-3911. We will provide copies of all documents requested (not including the
exhibits to those documents, unless the exhibits are specifically incorporated
by reference into those document or this prospectus) without charge.
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TABLE OF CONTENTS
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Page
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PROSPECTUS SUMMARY......................................................... 1
RISK FACTORS............................................................... 4
RECENT DEVELOPMENTS........................................................ 11
DIVIDEND POLICY............................................................ 11
DESCRIPTION OF OUR COMMON STOCK............................................ 11
DESCRIPTION OF WARRANTS GRANTED IN 2000.................................... 11
SELLING STOCKHOLDERS....................................................... 12
PLAN OF DISTRIBUTION....................................................... 14
LEGAL MATTERS.............................................................. 15
EXPERTS.................................................................... 15
INDEMNIFICATION............................................................ 15
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We have not authorized any person to give any information or to make any
representations in connection with the sale of the shares by the selling
stockholders other than those contained in this prospectus. You should not rely
on any information or representations in connection with such sales other than
the information or representations in this prospectus. The information in this
prospectus is correct as of the date of this prospectus. You should not assume
that there has been no change in our affairs since the date of this prospectus
or that the information contained in this prospectus is correct as of any time
after its date. This prospectus is not an offer to sell or a solicitation of an
offer to buy shares in any circumstances in which such an offer or solicitation
is unlawful.
<PAGE>
PROSPECTUS SUMMARY
This summary highlights selected information from this prospectus and may
not contain all the information that is important to you. To understand the
circumstances and terms of the offering and for complete information about OXIS,
you should read this entire document and the information incorporated by
reference, including the financial statements and the notes to the financial
statements.
References in this prospectus to "OXIS," the "Company," "we," "us," or
"our" are to OXIS International, Inc. and its subsidiaries, except where it is
made clear that such term means only the parent company.
OXIS
OXIS is a drug development and discovery company that develops novel
products to combat diseases caused by oxidative stress. OXIS also sells fine
chemicals, reagents and medical instruments.
OXIS recently completed a clinical trial of its lead therapeutic drug
candidate, BXT-51072, in 20 patients with inflammatory bowel disease. We plan to
initiate a further trial for this drug candidate. We are also moving forward
with our other two therapeutic classes in the antioxidant area.
OXIS operates as a holding company with two principal subsidiaries. All of
our drug development activities are carried out by our wholly-owned subsidiary,
OXIS Therapeutics, Inc. All of our commercial activities are carried out by our
wholly-owned subsidiary, OXIS Health Products, Inc.
As previously announced, we currently plan to sell or spin-off to our
stockholders OXIS Health Products, Inc. and other assets that are not used for
pharmaceutical development. After this transaction, OXIS will be refocused on
ethical pharmaceutical development. We expect to then expand our pharmaceutical
development business by licensing chemical compounds that are in the late
preclinical and early clinical development stages and possibly acquiring other
companies.
Our mailing address is: 6040 N. Cutter Circle, Suite 317, Portland, Oregon
97217-3935. Our telephone number is (503) 283-3911.
This Offering
We are registering 4,285,847 shares of our common stock for resale by
certain selling stockholders. This amount includes 1,376,949 shares sold to
investors in private placements during March and April 2000 that were exempt
from the registration requirements of the Securities Act of 1933, as amended.
The balance of the shares we are registering are issuable to investors that
received common stock purchase warrants from us in the same private placement.
These warrants give those investors the right to purchase shares of our common
stock at prices ranging from $4.92 to $7.13 per share. These warrants expire at
different times between February 23, 2001 and April 6, 2005. The warrants are
collectively referred to as the "warrants," the investors are collectively
referred to as the "selling stockholders" and the shares issued or issuable to
them are referred to as the "selling stockholder shares." We are registering the
selling stockholder shares pursuant to our agreements with the selling
stockholders.
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Commencing on the effective date of this prospectus, the selling
stockholders may, from time-to-time, sell, transfer or pledge their selling
stockholder shares directly to purchasers, transferees or pledgees. The selling
stockholders may also offer their selling stockholder shares through agents,
brokers, dealers or underwriters who may receive compensation in the form of
commissions or discounts. We anticipate that the selling stockholders will
offer the selling stockholder shares either on the Nasdaq Stock Market, in
privately negotiated transactions, or by both methods. We expect the price for
the selling stockholder shares to be the market price prevailing at the time of
sale, a price related to the prevailing market price or a negotiated price.
Prior to selling any of their shares, the selling stockholders must satisfy the
prospectus delivery and other requirements of the Securities Act.
Where You Can Find More Information
We are subject to the reporting requirements of the Securities Exchange Act
of 1934, as amended. In accordance with the Exchange Act, we file annual and
quarterly reports, proxy statements and other information with the Securities
and Exchange Commission. You may inspect and copy any document we file at the
SEC's public reference facilities at its offices at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549 and at the SEC's regional offices
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. You may also obtain copies of such materials by mail from the
Public Reference Section of the SEC at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Our filings with the SEC are also
available on the SEC's web site at http://www.sec.gov.
In addition, our common stock is quoted on the Nasdaq National Market under
the symbol "OXIS" and reports, proxy statements and other information concerning
us may also be inspected at the offices of the National Association of
Securities Dealers, Inc., 1735 K Street, N.W., Washington, DC 20006.
We have filed with the SEC a registration statement on Form S-3 with
respect to the common stock offered under this prospectus. This prospectus is
part of the registration statement on Form S-3 that we have filed with the SEC.
The SEC allows us to "incorporate by reference" information that we file with
it. This means that we can disclose important information to you by referring
you to other documents that we have filed with the SEC. The information that is
incorporated by reference is considered part of this prospectus, and information
that we file later will automatically update and may supersede this information.
For further information about us and the common stock being offered, you should
refer to the registration statement and the following documents that are
incorporated by reference:
(i) Our Annual Report on Form 10-K for the fiscal year ended December 31,
1999, filed with the SEC on March 30, 2000.
(ii) Our Current Report on Form 8-K filed with the SEC on March 23, 2000.
(iii) Our Current Report on Form 8-K filed with the SEC on April 12, 2000.
(iv) Our Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2000 filed with the SEC on May 12, 2000.
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All documents we file pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this prospectus and before the termination of
this offering are deemed to be incorporated by reference and will be a part of
this prospectus from the date they are filed. Any statement in this prospectus
or in a document incorporated by reference will be modified to the extent that a
statement in any subsequently-filed document which also is 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.
We will provide, upon written or oral request, a copy of any and all of the
documents that have been incorporated by reference in this prospectus (not
including exhibits to such documents unless such exhibits are specifically
incorporated by reference herein or into such documents) to any person
(including beneficial owners of our securities) to whom this prospectus is
delivered. You may direct your requests 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. Our website address is
www.OXIS.com. Information contained on our website or any other website does
not constitute a part of this prospectus.
Use of Proceeds
We will not receive any proceeds from the sale of our common stock by the
selling stockholders in the offering. We will receive a maximum aggregate
amount of $18,120,908 upon issuance of common stock if all of the warrants are
exercised. However, we cannot ensure that any warrants will be exercised. We
intend to use any proceeds we receive from the exercise of the warrants for
working capital and general corporate purposes, including licensing chemical
compounds, acquisitions and other business combinations if suitable
opportunities arise, or the repayment of outstanding indebtedness.
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RISK FACTORS
Before you invest in our common stock, you should be aware that there are
various risks, including those described below, that may affect our business,
financial condition and results of operations. We caution you, however, that
this list of risk factors may not be exhaustive, and these risk factors may be
supplemented by future filings.
Risk Factors Applicable Primarily to OXIS Therapeutics, Inc.
------------------------------------------------------------
We Have a History of Losses
We have incurred losses in each of the last five years and expect to incur
operating losses for the foreseeable future. As of March 31, 2000, we had an
accumulated deficit of $50,718,000. We expect to continue to experience
significant operating losses as we continue our research and development
programs. Our ability to achieve profitability and positive cash flows from
operations will depend, in part, on our successfully developing business
alliances with biotechnology or pharmaceutical companies that have the resources
needed to develop and market our potential pharmaceutical products. We have not
yet developed business alliances with any biotechnology or pharmaceutical
companies.
Our Future Profitability is Uncertain
We expect to incur operating losses for the foreseeable future. We expect
research and development expenses to increase as we expand our preclinical and
human clinical testing. Further, following the sale of OXIS Health Products,
Inc., we will no longer have revenues from sales of products. Our losses are
likely to increase from quarter-to-quarter as we expand our development
activities. We cannot be certain that we will ever achieve profitable
operations.
We Will Need Additional Financing
We believe that the capital we raised in the first half of 2000 will allow
us to continue our planned research and development programs through early 2001.
If we are unable to raise additional capital by 2001, we may have to cease or
curtail our operations, which would delay or prevent the development and
marketing of our potential pharmaceutical products. The report of our
independent auditors on our financial statements for the period ended December
31, 1999 included an explanatory paragraph referring to our ability to continue
as a going concern. We anticipate expending significant capital resources in
product research and development, including human clinical trials. We may also
use capital resources to acquire complementary businesses, products, or
technologies.
Our Success Depends on Our Research and Development Stage Products
Our success as a pharmaceutical development company depends on potential
products that we are researching and developing. We have not yet generated
material revenues from selling or licensing these products. We have completed
the preclinical work for one potential new therapeutic product and have
commenced the clinical trials. We cannot be certain that our product development
efforts will be successful. Successfully developing our products depends in part
on regulatory approvals and on our ability to market our products once they are
approved or to license the products to other companies.
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The Loss of a Key Executive or Our Failure to Attract Qualified People Could
Adversely Affect Our Business
Our success as a pharmaceutical development company significantly depends
on the continued efforts of Dr. Paul Sharpe, Chief Executive Officer, and Dr.
Timothy Rodell, Chief Technology Officer. We employ Dr. Rodell on a part-time
basis. We are depending on the efforts of Ray R. Rogers, (former Chairman and
now employed as a special advisor) to sell OXIS Health Products, Inc. in a
timely and favorable manner. We do not have long-term employment contracts with
Dr. Sharpe or Dr. Rodell. Our employment contract with Mr. Rogers does not
guarantee that he will continue to provide services to OXIS. The loss of
services of any of these three executives could materially adversely effect us.
We plan to hire additional personnel to help develop our potential
pharmaceutical products. Our success as a pharmaceutical development company
depends on our ability to attract and retain qualified personnel.
Failure to Protect Our Technology and Potential Claims of Patent Infringement
Could Adversely Affect Our Operating Results
Our success will depend largely on our proprietary products and technology.
While we have attempted to protect our proprietary products and technology
through patents and trade secrets, our competitors may be able to develop
similar products and technology independently. We cannot be certain that we will
receive patents on our pending applications or that the claims allowed on any of
the patents we do have will be sufficiently broad to protect our products and
technology. In addition, any patents we have may be challenged, invalidated or
circumvented.
Others may allege that we have infringed on their patent rights. The costs
of litigation or damages from any infringement claim might have a significant
adverse effect on us. Also, we might not be able to license the patents or
technology necessary to develop our business on reasonable terms.
Government Regulation May Limit Our Ability to Sell Our Products
As with other companies in our industry, our preclinical development,
clinical trials, product manufacturing and marketing are subject to federal and
state regulation in 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 and foreign
regulatory authorities. Obtaining FDA and other required regulatory approvals is
lengthy and expensive. Typically, obtaining regulatory approval for therapeutic
products requires the expenditure of substantial resources and takes several
years. The length of this process depends on 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 FDA regulations.
Clinical trials must also be performed in compliance with FDA regulations and
may require large numbers of test subjects, complex protocols and possibly
lengthy follow-up periods. As a result, our products may never receive approval
for commercial sale.
Our Products Expose Us to Potential Liability
The testing, marketing and sale of human therapeutic products entails
significant risks. Using therapeutic products in human trials and selling these
products following regulatory approval may expose us to liability claims. These
claims might be made directly by consumers or others. We have only limited
insurance for our clinical trials. We may not be able to maintain adequate
insurance to protect us against liabilities that may be incurred as a result of
clinical trials or use of our products.
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Our Use of Hazardous Materials Exposes us to Potential Liability
We use hazardous materials, radioactive compounds and other controlled
substances in our research and development activities. Although we believe that
our safety procedures for handling and disposing of hazardous materials comply
with the standards prescribed by state and federal regulations, we cannot
completely eliminate the risk of accidental contamination or injury from these
materials. In the event of an accident involving hazardous materials, we could
be held liable for any damages that result. This liability could exceed our
resources.
We Are In a Highly Competitive Business
The pharmaceutical industry is highly competitive. Competition in our
current and potential product areas from large pharmaceutical companies, and
other companies, universities and research institutions, is intense and expected
to increase. Many of these entities have substantially greater capital
resources, research and development staffs, facilities and experience than we
do. These and other entities may have or may develop new technologies that may
be the basis for products that compete with ours.
Any potential products that we successfully develop will have to compete
for market acceptance and market share. We expect the relative speed with which
we can develop products, complete the clinical testing and regulatory approval
processes and supply commercial quantities of product to the market to be
important competitive factors. Our competitors may develop technologies and
products that are more effective than those we are developing. In addition, our
competitors may achieve product commercialization or patent protection before we
do.
Our Stock Price May Fluctuate Significantly
The market price for our common stock is volatile. The market price of our
common stock may significantly fluctuate because of any of the following events:
. announcements of technical innovations or new products by us or our
competitors;
. a change in the status of one or more of our licensing agreements;
. developments concerning our patent rights or those of our competitors;
. litigation;
. publicity regarding medical results with our products being developed;
. regulatory developments;
. public concern about the safety of biotechnology or pharmaceutical
products; or
. announcement of our financial results.
Furthermore, due to one or more of the foregoing or other factors, our
results of operation in any future quarter may not meet the expectations of
securities analysts or investors. In such event, the market price of our common
stock could be materially and adversely affected. In addition, the stock markets
have recently experienced significant price and volume fluctuations seemingly
unrelated to the performance of individual companies.
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Our Stock is Traded on a New International Stock Exchange
Our shares of common stock are traded on the Nasdaq National Market and on
Le Nouveau Marche in France. Le Nouveau Marche began operation in February 1996
and, accordingly, has a limited operating history. Le Nouveau Marche may not be
a stable or liquid market for shares of our common stock. Further, fluctuation
of our share price on Le Nouveau Marche may affect the price of our shares
traded on Nasdaq.
We Have a Significant Number of Options and Warrants Outstanding Which May
Depress Our Stock Price.
As of April 30, 2000, we had 9,348,878 shares of common stock outstanding.
Approximately 1,314,000 shares of common stock are reserved for issuance under
our 1994 Stock Incentive Plan. We have options and warrants outstanding to
purchase a total of 7,340,514 shares of common stock, of which, options to
purchase 1,294,002 shares have been granted pursuant to the 1994 Stock Incentive
Plan. Outstanding options include options to purchase 400,000 shares of common
stock that are subject to stockholder approval of an amendment to the 1994 Stock
Incentive Plan. Pursuant to a registration statement on Form S-8 filed with the
SEC, we have registered for resale all of the shares of common stock under the
1994 Stock Incentive Plan and 7,000 additional shares subject to other options.
These shares may now be sold into the public securities markets upon issuance
under the 1994 Stock Incentive Plan or exercise of the options outside of the
1994 Stock Incentive Plan. Future sales of common stock in the public securities
markets, including sales pursuant to this prospectus, may cause substantial
fluctuations, including substantial price reductions, in the price of our common
stock over short time periods.
Conversion of our Outstanding Preferred Stock Will Dilute Our Outstanding Common
Stock
We have outstanding shares of Series B and C preferred stock. The Series B
preferred stock is convertible into common stock at a rate of one share of
common stock for each five shares of Series B preferred stock. The Series C
preferred stock is convertible into common stock based on a percentage of the
prevailing trading price of our common stock at the time of conversion. We must
issue up to a maximum 261,476 shares of common stock on conversion of our
preferred stock. The conversion of the outstanding shares of our preferred stock
will dilute our issued and outstanding common stock.
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Certain Entities Own a Significant Percentage of our Voting Securities
The following table shows the percentage ownership of our voting securities
held by our four largest stockholders, and our former Chairman, Mr. Rogers, as
of April 30, 2000. The percentage of voting securities held is calculated as if
any convertible preferred stock held by the stockholders shown below had been
converted into common stock and any options or warrants held by them had been
exercised.
Percent of voting
Stockholders securities held
------------ ---------------
Pictet & Cie 25.2%
Teachers Pension Fund of Berne 14.8%
Credit Suisse Asset Management Funds 9.2%
S.R. One, Limited 5.9%
Ray R. Rogers 2.5%
Dr. Brenda D. Gavin, one of our directors, is President of S.R. One,
Limited.
Our largest stockholders can significantly influence the outcome of matters
submitted to our stockholders for approval. As a result, certain transactions,
including the election of directors, and any merger, consolidation or sale of
all or substantially all of our assets, may not be possible without the approval
of these stockholders.
The Anticipated Sale of OXIS Health Products, Inc. May Not Succeed
We plan to sell or spin off our assets that are not used for pharmaceutical
development. This transaction will focus OXIS solely on developing
pharmaceuticals. Most of the assets we plan to sell are held by our subsidiary,
OXIS Health Products, Inc. We may not succeed in selling OXIS Health Products,
Inc. in a timely fashion or in a manner favorable to us. In addition, we may not
be successful in our effort to become a pure pharmaceutical development company.
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Risk Factors Applicable Primarily to OXIS Health Products, Inc.
---------------------------------------------------------------
We Currently Depend on Others to Manufacture Components of Our Products
Our subsidiary, OXIS Health Products, Inc., depends on outside suppliers to
manufacture components of our products. Independent third parties also produce
some of our products, and raw materials used in our products. We depend on these
third parties to produce products, supply quality materials and to deliver them
in a timely manner. We depend on these manufacturers to achieve acceptable
manufacturing yields and to allocate to us a sufficient portion of their
capacity to meet our needs. We believe that our current third-party suppliers
will meet our needs for the foreseeable future. Constraints or delays in the
supply of products or raw materials could cause us to lose customers, delay
development projects and could have other adverse effects on our business. Our
reliance on third party manufacturers and suppliers involves several other
risks, including reduced control over delivery schedules, quality assurance and
costs. Our foreign manufacturers and suppliers subject us to additional risks
such as changes in governmental policies, imposition of tariffs and import
restrictions and other factors beyond our control.
Following the sale or spin-off of OXIS Health Products, Inc., we may still
depend on others for manufacture of drug supply and other services.
We are Currently Exposed to Foreign Currency Fluctuation and Foreign Tax Laws
Our French subsidiary (now mostly inactive) has conducted virtually all of
its non-U.S. business in currencies other than the U.S. dollar. Until we sell
OXIS Health Products, Inc., foreign currency fluctuations may affect that part
of the business. Until the sale of OXIS Health Products, Inc., we expect to
continue to buy and sell the majority of our superoxide dismutase in a foreign
currency. Other than buying and selling bulk superoxide dismutase in a single
currency, we do not limit our foreign exchange risk. Accordingly, foreign
currency fluctuations may affect our earnings and asset valuations. We may be
affected by laws regarding our 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. Foreign tax laws and changes in those laws may have
a material adverse impact on our operations.
We Currently Depend on International Sales
Until we sell OXIS Health Products, Inc., we expect that international
sales will continue to account for a substantial portion of our revenues. Our
business in foreign markets is subject to fluctuations in foreign currency
exchange rates and controls and other regulatory policies of foreign
governments. Our business could also be affected by changes in U.S. or foreign
laws and policies concerning foreign trade and investment.
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Forward Looking Statements
--------------------------
You Should Not Rely on Our Forward-Looking Statements
This prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act. In particular, statements in this prospectus
about the following involve risks and uncertainties:
. our future operating results and business plans;
. our successful development of therapeutic products;
. entering into strategic partnerships; and
. raising capital.
Our actual results could differ materially from those we discuss in this
prospectus. Factors that could cause or contribute to such differences include
the risks discussed in this Risks Factors section, as well as those discussed
elsewhere in this prospectus. When used in this prospectus, the words
"believes," "plans," "expects," "anticipates," "estimates" and similar
expressions, identify forward-looking statements. We do not intend to update any
forward-looking statements.
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RECENT DEVELOPMENTS
As previously announced, our Board of Directors has determined that it is
in the best interest of the Company and its stockholders to narrow our business
focus to pharmaceutical development. Consequently, we plan to sell or spin-off
to our stockholders OXIS Health Products, Inc. and other assets that are not
used for pharmaceutical development. After this transaction, we expect to expand
our pharmaceutical development business by licensing other chemical compounds
that are in the late preclinical and early clinical development stages and
possibly by acquiring other companies.
Dr. Paul Sharpe became our Chief Executive Officer in February of 2000. Dr.
Sharpe resides in the United Kingdom. Consequently, our Board of Directors has
authorized our management to explore the possibility of relocating our corporate
headquarters in addition to part of our research and development operations to
the United Kingdom.
We entered into an Executive Separation and Employment Agreement with Ray
R. Rogers, dated as of April 3, 2000, wherein the parties agreed that Mr.
Rogers would resign as the Chairman of our Board of Directors. Under this
agreement, Mr. Rogers continues to serve as a member of our Board of Directors
and we employ him as a salaried special advisor. Mr. Rogers' duties as a special
advisor include directing the sale or spin-off of OXIS Health Products, Inc. Mr
Rogers' employment under this agreement is for one year and may be extended for
an additional one-year period by agreement of both parties. As contemplated in
the Executive Separation and Employment Agreement, Mr Rogers resigned as the
Chairman of our Board of Directors, effective June 30, 2000.
DIVIDEND POLICY
We have never paid or declared cash dividends on our common stock. We
currently intend to retain any earnings for use in the operation and growth of
our business and do not anticipate paying cash dividends on our common stock in
the foreseeable future.
DESCRIPTION OF OUR COMMON STOCK
On July 14, 1998, we amended our Certificate of Incorporation to provide
that the par value of each share of our common stock is one-tenth of one cent
($0.001). In addition, on the same date, the authorized number of shares of our
common stock was increased to 95,000,000 shares.
The holders of our common stock are entitled to one vote per share on all
matters on which stockholders are entitled to vote. Holders of our common stock
are entitled to receive dividends when and as declared by our Board of Directors
out of any funds lawfully available therefore and, in the event of liquidation
or distribution of assets, are entitled to participate ratably in the
distribution of such assets remaining after payment of liabilities, in each case
subject to any preferential rights granted to any series of our preferred stock
that may then be outstanding. Holders of our common stock do not have cumulative
voting rights with respect to any matter.
The transfer agent and registrar for our common stock is Boston EquiServe,
L.P., Boston, Massachusetts.
DESCRIPTION OF WARRANTS GRANTED IN 2000
General
-------
The following description of the warrants we issued in 2000 is only a
summary of the detailed provisions of the warrant agreements entered into
between us and each of the selling stockholders. Each warrant agreement was
entered into in connection with our private placement that took place during
March and April of 2000. In the private placement, some of the selling
stockholders purchased units consisting of one share of common stock and
warrants to purchase two shares of common stock. The shares of common stock
purchased in the private placement were priced at the closing price of our
common stock as quoted on the Nasdaq National Market on the trading day prior to
the signing of each subscription agreement. The warrants were issued pursuant to
the terms of the warrant agreement, and have an exercise price equal to either
125% or 150% of the per share price of the common stock sold. In addition to the
common stock underlying the warrants issued to investors in the private
placement, this prospectus includes common stock underlying warrants issued to
our placement agents in connection with the private placement.
Number of Shares of Common Stock Issuable Upon Exercise of Warrants
-------------------------------------------------------------------
In the aggregate, 1,376,949 shares of common stock were placed with the
selling stockholders in the private placement at prices ranging from $3.9375 to
$4.75 per share. Warrants to purchase 2,753,898 shares of common stock were
issued to investors at exercise prices ranging from $4.92 to $7.13 per share. In
addition, warrants to purchase 155,000 shares of common stock were issued to our
placement agents as part of their compensation. The exercise price of the
warrants issued to the placement agents is $5.94 per share. As of the date of
this prospectus, none of the warrants have been exercised.
Time Period During Which Warrants May Be Exercised
--------------------------------------------------
The warrants became exercisable immediately upon issuance. The warrants may
be exercised pursuant to the terms of exercise provided in the warrant
agreements until the expiration date set forth in each warrant agreement. In
each warrant agreement, the expiration date is either the first, second or fifth
anniversary of the issue date of the warrants issued thereunder, which dates
range from February 23, 2001 to April 6, 2005.
Procedure for Exercise of Warrants
----------------------------------
The warrant agreements provide that the warrants may be exercised, in whole
or in part, at any time during normal business hours on or after their date of
issuance and prior to the close of business on the applicable expiration date.
The warrant agreements also provide that the warrants may be exercised
-11-
<PAGE>
by the holder thereof then registered on our books, in whole or from time to
time in part by (i) delivery of a written notice to us, (ii) payment to us of an
amount equal to the exercise price multiplied by the number of shares being
purchased under the warrant and (iii) the surrender of the warrant. No warrants
may be exercised for fractional shares.
Adjustments to the Exercise Price
---------------------------------
The warrant agreements provide that if we subdivide our outstanding shares
of common stock into a greater number of shares, declare a stock dividend or
make a common stock distribution payable in common stock, the exercise price
will be proportionately reduced. Conversely, if we combine our outstanding
shares of common stock into a smaller number of shares, the exercise price will
be proportionately increased.
Upon each adjustment of the exercise price, the registered holder of the
warrant will be entitled to purchase, at the adjusted exercise price, a
proportionately increased or decreased number of shares of common stock.
After any adjustment of the exercise price, we must give notice of the
adjustment to each registered holder of a warrant. We must also give notice of
certain corporate transactions to each registered holder of a warrant at least
10 business days prior to the consummation of certain transactions.
SELLING STOCKHOLDERS
The following table sets forth the names of the selling stockholders and
the number of shares of common stock and common stock underlying warrants held
by the selling stockholders as of April 30, 2000, all of which may be offered
for resale pursuant to this prospectus. This table is based upon information
contained on our stock and warrant transfer records and information provided by
the selling stockholders. Because the selling stockholders may offer to sell
all, some or none of their selling stockholder shares, we cannot provide the
number shares of common stock or common stock underlying the warrants that will
be held by the selling stockholders after such offering. We have, therefore,
prepared the following table using the assumption that all of the selling
stockholder shares will be sold. The number of selling stockholder shares that
each selling stockholder may sell under this prospectus was determined pursuant
to the registration rights agreements entered into between us and each
respective selling stockholders, other than Bradford-Wright LLC and Credit
Lyonnais.
-12-
<PAGE>
<TABLE>
<CAPTION>
Shares
------
Shares held before the offering Shares offered for resale held after the offering
------------------------------- ------------------------- -----------------------
Shares Total % of
subject 2000 owned outstanding
Selling Common to Common Warrant after Common
stockholder (1) Shares warrants Total shares shares (2) Total offering Stock (3)
--------------- ------ -------- ----- ------ ---------- ----- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Teachers Pension Fund
of Berne 558,442 1,001,884 1,560,326 443,442 886,884 1,330,326 230,000 2.43%
Bradford-Wright LLC -- 5,000 5,000 -- 5,000 5,000 -- *
Centro Internationale
Handelsbank AG 33,380 55,332 88,712 10,526 21,052 31,578 57,134 *
Credit Lyonnais -- 150,000 150,000 -- 150,000 150,000 -- *
Forsikrings-Aktieselskab
Alka Liv 219,563 324,826 544,389 105,263 210,526 315,789 228,600 2.42%
Pictet & Cie 970,308 1,918,332 2,888,640 733,166 1,466,332 2,199,498 689,142 7.03%
William G. Seims 10,526 21,052 31,578 10,526 21,052 31,578 -- *
Sofinnova Capital
FCPR 25,468 50,936 76,404 25,468 50,936 76,404 -- *
Sofinnova SA 16,979 33,958 50,937 16,979 33,958 50,937 -- *
Daniel P. Wagener and
Wanda F. Wagener
JTROS 10,526 21,052 31,578 10,526 21,052 31,578 -- *
Daniel P. Wagener
TTEE
The Wagener Trust U/A
10/6/78 21,053 42,106 63,159 21,053 42,106 63,159 -- *
-------------------------------------------------------------------------------------------
===========================================================================================
Total 1,866,245 3,624,478 5,490,723 1,376,949 2,908,898 4,285,847 1,204,876
===========================================================================================
</TABLE>
* less than 1% of our issued and outstanding common stock.
(1) The persons and entities named in the table have sole voting and sole
investment power with respect to all securities beneficially owned.
(2) We have reserved 2,908,898 shares of our common stock for issuance to the
holders of the warrants upon exercise of the warrants.
(3) The percentages in this column are based on 9,348,878 shares of our common
stock issued and outstanding on April 30, 2000. The percentages in this
column assume full of exercise of the warrants held by each respective
stockholder.
-13-
<PAGE>
PLAN OF DISTRIBUTION
We are registering the common stock offered by the selling stockholders
pursuant to the terms of registration rights agreements entered into between
February 21, 2000 and March 31, 2000 in connection with the Company's private
placement of common stock and warrants completed during the first half of 2000.
We are also registering common stock that will be issued to our placement agents
upon exercise of their warrants.
The registration rights agreements require us to use commercially
reasonable efforts to file a registration statement under the Securities Act
covering the resale of the common stock within 90 days after we close the last
sale of stock under the private placement. We have also agreed to: (i) use
commercially reasonable best efforts to cause such registration statement to
become effective, and to keep such registration statement effective for up to
180 days; (ii) prepare and file any amendments and supplements to such
registration statement that may be necessary to comply with the Securities Act
regarding the disposition of all securities covered by such registration
statement; (iii) furnish to each holder of the registrable securities copies of
a prospectus, including a preliminary prospectus, in conformity with the
Securities Act, and such other documents as they may reasonably request to
facilitate the disposition of securities they own; and (iv) use 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 of
registerable securities.
The selling stockholder shares offered under this prospectus may be sold
from time-to-time by the selling stockholders, or by their pledgees, donees,
transferees or other successors in interest. These 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 selling stockholder 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. We
will issue common stock to the warrant holders upon exercise of their warrants,
and such common stock will be registered under the Securities Act upon issuance
pursuant to the terms of this prospectus.
We are bearing the costs relating to the registration of the selling
stockholder shares offered under this prospectus. We estimate the expenses of
this registration will be approximately $22,000. Each of the selling
stockholders will pay the cost of all brokerage commissions and discounts, and
all expenses incurred by them in connection with sales of their selling
stockholder shares. In connection with any transaction involving selling
stockholder shares, broker-dealers or others may receive from the selling
stockholders, and may in turn pay to other broker-dealers or others,
compensation in the form of commissions, discounts or concessions in amounts to
be negotiated at the time. Such compensation shall be paid by the selling
stockholders. Broker-dealers and any other persons participating in a
distribution of the common stock may be deemed to be "underwriters" within the
meaning of the Securities 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 selling
stockholder shares, whether effected by the selling stockholders, any broker-
dealer or others, may be made pursuant to this prospectus. In addition, any
selling stockholder shares that qualify for sale by a selling stockholder
pursuant to Rule 144 under the Securities 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 selling stockholder shares may be sold by selling stockholders
in such jurisdictions only through registered or licensed brokers or dealers.
In addition, the selling stockholder shares 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.
We and the selling stockholders have agreed, and hereafter may further
agree, to materially indemnify certain persons, including, respectively, the
selling stockholders and us and our officers and directors, and legal counsel as
well as, respectively, persons controlling the selling stockholders and us, and
the underwriters for such selling stockholders, broker-dealers or others,
against certain liabilities in
-14-
<PAGE>
connection with any offering of the selling stockholder shares, including
liabilities arising under the Securities Act.
LEGAL MATTERS
Tonkon Torp LLP, Portland, Oregon, will pass upon the validity of the
common stock offered under this prospectus.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference from our Annual Report on Form 10-K for the year ended December 31,
1999, 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 our ability to continue as a going concern), and have been so incorporated in
reliance upon the report of such firm given upon its authority as experts in
accounting and auditing.
INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers and controlling persons, we have
been advised that in the opinion of the SEC 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 us of expenses incurred or paid by one of
our directors, officers or controlling persons 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, we will, unless in
the opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by us is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
-15-
<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.
Registration fee $ 2,195
Blue sky qualification fees and expenses 1,000
Legal fees and expenses 10,000
Accounting fees and expenses 3,000
Miscellaneous 5,000
-------
$21,195
Item 15. Indemnification of Officers and Directors.
The Company has the power, pursuant to Section 102(b)(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."
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
-II-1-
<PAGE>
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 Description of Document
Number -----------------------
------
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 Tonkon Torp LLP (2)
10.1 Executive Separation and Employment Agreement
23.1 Consent of Deloitte & Touche LLP
23.3 Consent of Tonkon Torp LLP. See Exhibit 5.1. (2)
24.1 Power of Attorney (included on signature page)
____________________
(1) Incorporated herein by reference to the Company's Current Report on
Form 8-K filed March 23, 2000
(2) To be filed by amendment
-II-2-
<PAGE>
Item 17. Undertakings
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
Securities 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 Securities
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.
-II-3-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of London, England, on July 5, 2000
OXIS INTERNATIONAL, INC.
By: /s/ Paul C. Sharpe
--------------------------------
Paul C. Sharpe
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 July 5, 2000
-------------------------
Ray R. Rogers
/s/ Paul C. Sharpe Director, Chief Executive Officer July 5, 2000
------------------------- (Principal Executive Officer)
Paul C. Sharpe
/s/ Jon S. Pitcher Chief Financial Officer July 5, 2000
------------------------- and Secretary
Jon S. Pitcher (Principal Financial and Accounting
Officer)
/s/ Timothy G. Biro Director July 5, 2000
-------------------------
Timothy G. Biro
/s/ Richard A. Davis Director July 5, 2000
-------------------------
Richard A. Davis
</TABLE>
-II-4-
<PAGE>
Director July 5, 2000
----------------------------
Brenda D. Gavin
Director July 5, 2000
----------------------------
Stuart Lang
/s/ Timothy C. Rodell Director July 5, 2000
----------------------------
Timothy C. Rodell
Director July 5, 2000
----------------------------
A.R. Sitaraman
-II-5-
<PAGE>
INDEX TO EXHIBITS
Exhibit Sequential
Number Description Page No.
------ ----------- -------
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 Tonkon Torp LLP (2)
10.1 Executive Separation and Employment Agreement
23.1 Consent of Deloitte & Touche LLP
23.3 Consent of Tonkon Torp LLP. See Exhibit 5.1 (2)
24.1 Power of Attorney (included on signature page)
________________________________________________________________________________
(1) Incorporated herein by reference to the Company's Current Report on Form
8-K filed March 23, 2000
(2) To be filed by amendment
-II-6-
