As filed with the Securities and Exchange Commission on August 27, 1996
Registration No. 333-5921
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 3 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------
OXIS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-1620407
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
------------
6040 N. CUTTER CIRCLE, SUITE 317
PORTLAND, OREGON 97217-3935
(503) 283-3911
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
-------------
RAY R. ROGERS
CHAIRMAN OF THE BOARD
OXIS INTERNATIONAL, INC.
6040 N. CUTTER CIRCLE, SUITE 317
PORTLAND, OREGON 97217-3935
(503) 283-3911
(Name, address, including zip code and telephone number, including area code of
agent for service)
---------------
COPIES TO:
RICHARD SCUDELLARI, ESQ.
JACKSON TUFTS COLE & BLACK, LLP
60 SOUTH MARKET STREET
SAN JOSE, CALIFORNIA 95113
(408) 998-1952
------------
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the Registration Statement becomes effective.
------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans please check the following
box. [_]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. [X]
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CALCULATION OF REGISTRATION FEE
====================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Amount of
to be Registered Registered Per Share (1) Offering Price (1) Registration Fee
- ----------------------------------------------------------------------------------------------------
Common Stock $.50 par
value . . . . . . . . 9,306,426 (2) $2.328125 $21,666,523 $8,202 (3)
====================================================================================================
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457 based on the average of the bid and asked
prices for the Common Stock, as reported by prices on the Nasdaq National Market
on June 10, 1996.
(2) Includes 301,200 shares issuable on exercise of warrants issued in
connection with debentures, 642,583 shares issuable upon the conversion of
Series B Preferred Stock, 2,485,637 shares issuable on conversion of Series C
Preferred Stock, 85,632 shares issuable on exercise of warrants issued in
connection with the issuance of Series C Preferred Stock, a maximum of 2,424,884
shares issuable upon conversion of Series D Preferred Stock, and 810,126 shares
issuable upon exercise of warrants issued in connection with the issuance of
Series D Preferred Stock.
(3) An aggregate of 5,075,073 shares of Common Stock of the issuer was
previously registered on Registration Statement No. 33-61087 on Form S-3 (as
amended by Amendment No. 1 to such Registration Statement), and $5,250 was paid
as the registration fee for registration of such shares. $8,202 has been paid
previously as the registration fee for the shares registered on this
Registration Statement;
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
contained in this Registration Statement is a combined Prospectus and also
relates to an aggregate of 5,075,073 shares of Common Stock registered on
Registration Statement No. 33-61087 on Form S-3 (as amended by Amendment No. 1
to such Registration Statement).
OXIS INTERNATIONAL, INC.
CROSS REFERENCE SHEET
Between Items of Form S-3 and Prospectus
Registration Statement Item and Heading Prospectus Caption
- --------------------------------------- ------------------
1. Front of Registration Statement and Outside Outside Front Cover Page
Front Cover of Prospectus
2. Inside Front and Outside Back Cover Pages Front and Outside
of Prospectus Back Cover Pages
3. Risk Factors Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Selling Stockholders
8. Plan of Distribution Cover Page; Plan of
Distribution
9. Description of Securities Incorporation of Certain
Documents by Reference
10. Interest of Named Experts and Counsel Not Applicable
11. Material Changes Incorporation of Certain
Documents by Reference
12. Incorporation of Certain Information Incorporation of Certain
Documents by Reference
13. Disclosure of Commission Position on Undertakings; Indemnification
Indemnification for Securities Act of Officers and Directors
Liabilities
14. Other Expenses of Issuance and Other Expenses of Issuance
Distribution and Distribution
15. Indemnification of Directors and Indemnification of Officers
Officers and Directors
16. Exhibits Exhibits
17. Undertakings Undertakings
3
===============================================================================
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these be any sale
of these securities in any State in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of
any such State.
===============================================================================
PROSPECTUS
OXIS INTERNATIONAL, INC.
14,381,499 Shares
Common Stock
________________
This Prospectus relates to 14,381,499 shares of Common Stock, par value
$.50 (the "Common Stock"), of OXIS International, Inc. ("OXIS" or the "Company")
which are being offered and sold by certain security holders of the Company
including officers and directors of the Company (the "Selling Stockholders").
The above 14,381,499 shares of Common Stock being offered hereby includes an
aggregate of 2,309,611 shares which are issuable upon conversion of the
Company's Series C Preferred Stock and Series D Preferred Stock only upon the
occurrence of certain events. The 14,381,499 shares of Common Stock being
offered hereby, if all of the securities pursuant to which shares of Common
Stock being offered hereby could be issued were to be converted or exercised,
would represent approximately sixty-nine percent (69%) of the issued and
outstanding shares of Common Stock of the Company. The Selling Stockholders,
directly or through agents, broker-dealers or underwriters, may sell the Common
Stock offered hereby from time to time on terms to be determined at the time of
sale, in transactions on the Nasdaq National Market or in privately negotiated
transactions or otherwise. The Selling Stockholders and any agents, broker-
dealers or underwriters that participate in the distribution of the Common Stock
may be deemed to be "underwriters" within the meaning of the Securities Act of
1933, as amended (the "Act"), and any commission received by them and any profit
on the resale of the Common Stock purchased by them may be deemed to be
underwriting discounts or commissions under the Act. See "Selling Stockholders"
and "Plan of Distribution."
The Common Stock of the Company is quoted on the Nasdaq National Market
under the symbol "OXIS." The last reported sales price of the Company's Common
Stock on the Nasdaq National Market on August 26, 1996 was $1.750 per share.
___________________________
THE SHARES OF COMMON STOCK OFFERED HEREBY INVOLVE
A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
AT PAGE NINE OF THIS PROSPECTUS.
___________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
_______________________
-4-
CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Prospectus contains or incorporates by reference certain "forward-
looking" statements. The Company desires to take advantage of the new
"safe harbor" provisions of the Private Securities Litigation Reform
Act of 1995 and is including this statement for the express purpose of
availing itself of the protections of such safe harbor with respect to
all of such forward-looking statements. Examples of forward-looking
statements contained or incorporated by reference herein include the
Company's projections with respect to: (a) the development, marketing
and sales of Company products; (b) the availability of products and
services from independent third parties; (c) the Company's future
financial results, capital needs and sources of financing; and (d) the
effect of certain legislation and governmental regulations on the
Company. The Company's ability to predict any of such projected
results or to predict the effect of any legislation or other pending
events on the Company's operating results is inherently uncertain.
Therefore, the Company wishes to caution each reader of this Prospectus
to carefully consider the specific factors discussed with such forward-
looking statements as such factors in some cases have affected, and in
the future (together with other factors) could affect, the ability of
the Company to achieve its projected results and may cause actual
results to differ materially from those expressed herein.
No underwriting commissions or discounts will be paid by the Company in
connection with this offering. Estimated expenses payable by the Company in
connection with this offering are $53,202. See "Plan of Distribution." The
aggregate proceeds to the Selling Stockholders from the Common Stock will be the
purchase price of the Common Stock sold less the aggregate agents' commissions
and underwriters' discounts, if any. The aggregate proceeds to the Company from
the Common Stock, if any, will be the cancellation of debt by means of the
conversion of the convertible debentures ($1,255,000 in principal, plus any
accrued and unpaid interest), and the exercise price for the warrants and
options to purchase Common Stock offered hereunder (a maximum of $5,340,800 in
the aggregate assuming the exercise of all such warrants and options.)
The Company has agreed to indemnify certain of the Selling Stockholders
and certain other persons against certain liabilities, including liabilities
under the Act.
The date of this Prospectus is August 27, 1996
-5-
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files annual and quarterly reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information may be inspected and copied at
the Commission's Regional Offices at 7 World Trade Center, 13th Floor, New York,
New York 10048; and 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such material can be obtained at prescribed rates from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding
issuers that file electronically with the Commission. The Commission's Web site
may be accessed at http://www.sec.gov. The Common Stock of the Company is quoted
on the Nasdaq National Market. Reports and other information concerning the
Company may be inspected at the National Association of Securities Dealers, Inc.
at 1735 K Street, N.W., Washington, D.C. 20006.
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus, and, if given or made, such other information or representations
must not be relied upon as having been authorized by the Company. This
Prospectus does not constitute an offer or solicitation by anyone in any state
in which such offer or solicitation is not authorized, or in which the person
making such offer or solicitation is not qualified to do so, or to any person to
whom it is unlawful to make such offer or solicitation. The delivery of this
Prospectus at any time does not imply that information herein is correct as of
any time subsequent to the date hereof.
ADDITIONAL INFORMATION
A registration statement on Form S-3 with respect to the Common Stock
offered hereby (the "Registration Statement") has been filed with the Commission
under the Act. This Prospectus does not contain all of the information contained
in such Registration Statement and the exhibits and schedules thereto, certain
portions of which have been omitted pursuant to the rules and regulations of the
Commission. For further information with respect to the Company and the Common
Stock offered hereby, reference is made to the Registration Statement and the
exhibits and schedules thereto. Statements contained in this Prospectus
regarding the contents of any contract or any other document are not necessarily
complete and, in each instance, reference is hereby made to the copy of such
contract or document filed as an exhibit to the Registration Statement. The
Registration Statement, including exhibits thereto, may be inspected without
charge at the Commission's principal office in Washington, D.C., and copies of
all or any part thereof may be obtained from the Public Reference Section,
Securities and Exchange Commission, Washington, D.C., 20549, upon payment of the
prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed or to be filed with the Commission under
the Exchange Act are hereby incorporated by reference into this Prospectus:
6
(i) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, as amended, including all material incorporated
by reference therein.
(ii) The Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1996.
(iii) The Company's Current Report on Form 8-K filed with the Commission
on May 24, 1996.
(iv) The Company's Current Report on Form 8-K filed with the Commission
on June 21, 1996.
(v) The Company's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1996.
(vi) The Company's Current Report on Form 8-K/A filed with the
Commission on September 29, 1995.
(vii) The description of the Registrant's Common Stock contained in the
Company's Prospectus dated June 18, 1969 (File No. 0361150) filed
pursuant to Section 12 of the Exchange Act on June 23, 1969.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing of such documents. Any
statement contained in this Prospectus or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently-filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the documents that have been
incorporated by reference herein (not including exhibits to such documents
unless such exhibits are specifically incorporated by reference herein or into
such documents). Such request may be directed to OXIS International, Inc., 6040
N. Cutter Circle, Suite 317, Portland, OR 97217-3935, telephone (503) 283-3911,
Attn: Jon S. Pitcher, Chief Financial Officer.
7
THE COMPANY
The Company was initially incorporated in 1965 as Diagnostic Data, Inc., a
California corporation. It was reincorporated in Delaware in 1974, and adopted
the name DDI Pharmaceuticals, Inc. in 1985. In September 1994, the Company
acquired Bioxytech S.A., based in France ("Bioxytech"), and merged with
International BioClinical, Inc. ("IBC"), an Oregon corporation (the
"Combination"), and changed its name to OXIS International, Inc. Bioxytech was
acquired through an exchange of shares that resulted in the Company owning in
excess of 99% of the outstanding stock of Bioxytech, which operates as a
subsidiary of the Company and has been renamed "OXIS International, S.A." In
July 1995, the Company acquired Therox Pharmaceuticals, Inc., a Delaware
corporation ("Therox"), a Philadelphia-based free radical therapeutics company
funded by S.R. One, Limited, the venture capital subsidiary of SmithKline
Beecham, and Brantley Venture Partners II, L.P.
OXIS is engaged in the discovery, development, manufacture and marketing of
products to diagnose, treat and prevent the pathologic effects of free radicals
(i.e., diseases of oxidative stress). Free radicals are highly reactive
molecules that are damaging to cells when their concentration exceeds the body's
antioxidant defense capacity. Oxidative stress is now thought to be a basic
mechanism of cell damage and death in a number of acute and chronic diseases
such as atherosclerosis, AIDS, cancer, diabetes, arthritis and traumatic injury.
Concomitantly, advances in molecular biology are beginning to clarify the
mechanism(s) of cellular damage by free radicals and driving market demand for
new products to diagnose, treat and prevent diseases of oxidative stress. The
Company sells research assays for markers of oxidative stress, clinical
therapeutic drug monitoring ("TDM" ) assays and bovine superoxide dismutase
("bSOD"). In addition, the Company has several therapeutic research and
development programs, with lead molecules identified for two different series of
compounds, a glutathione peroxidase mimic and a lipid soluble antioxidant. The
Company's staff consists of approximately 60 managers, scientists, technicians
and administrative personnel who are currently located at two sites.
The Company's principal executive offices are located at 6040 N. Cutter
Circle, Suite 317, Portland, OR 97217-3935. Research and development operations
of OXIS are located at Z.A. des Petits Carreaux, 2 av. des Coquellcots, F 94385
Bonneull-Sur-Marne, Cedex, France (outside of Paris).
8
RISK FACTORS
The following are the significant risk factors that should be considered
carefully in evaluating the Common Stock of OXIS.
NEED FOR ADDITIONAL FINANCING.
The Company has incurred losses in each of the last five years. As of June
30, 1996, the Company had an accumulated deficit of approximately $30,000,000.
The Company expects to incur operating losses for the foreseeable future.
Accordingly, it is anticipated that further financing will be needed by the
fourth quarter of 1996 to allow the Company to continue its planned research and
development programs and marketing of additional products. The unavailability of
such anticipated financing could cause the Company to cease or curtail its
operations, and/or delay or prevent the development and marketing of the
Company's potential therapeutic products. As of the date of this Prospectus, the
Company has raised $4,306,302 (including $843,035 in cancellation of
indebtedness in exchange for Series C Preferred Stock) during 1996 through the
sale of shares of its Series C Preferred Stock and Series D Preferred Stock. In
addition, in June 1996, $1,255,000 principal plus accrued interest of $58,000 on
the Company's 8% convertible subordinated debentures were converted to common
stock.
The Company also plans to conduct a follow-on public offering of its Common
Stock to provide the additional funds for clinical trials for its oxidative
stress assays, complete preclinical studies on synthetic antioxidants, and
initiate early clinical trials. There can be no assurances that the Company will
successfully complete such a follow-on offering, that the terms of any such
offering will be favorable to the Company, or that if such offering occurs that
funds generated thereby will be sufficient to complete the Company's
contemplated development programs.
RESEARCH AND DEVELOPMENT STAGE PRODUCTS.
Much of the Company's success depends on potential products which are in
research and development and no material revenues have been generated to date
from sales of these products. Although the Company currently markets and sells
research and diagnostic assays, the Company must successfully partner, develop,
obtain regulatory approval for and market or sell its potential therapeutic
products to achieve profitable operations. The preclinical work for two
potential new therapeutic products is presently nearly completed, and the
clinical development stages are projected to begin in the near future. No
assurance can be given that the Company's product development efforts will be
successfully completed, that required regulatory approvals will be obtained, or
that any such products, if developed and introduced, will be successfully
marketed. If the Company does not successfully introduce new products, its
revenues and results of operations will be materially adversely affected.
FUTURE PROFITABILITY UNCERTAIN.
The Company expects to incur operating losses for the foreseeable future.
The Company's research and development expenses will increase as the Company
pursues human clinical testing. These losses and expenses may increase and
fluctuate from quarter to quarter as
9
the Company expands its development activities. There can be no assurance that
the Company will ever achieve profitable operations. The report of the Company's
independent auditors on the Company's financial statements for the period ended
December 31, 1995 included an explanatory paragraph referring to the Company's
ability to continue as a going concern. The Company anticipates that it will
expend significant capital resources in product research and development and in
human clinical trials. Capital resources may also be used for the acquisition of
complementary businesses, products or technologies. OXIS' future capital
requirements will depend on many factors, including: continued scientific
progress in its research and development programs; the magnitude of these
programs; the success of preclinical and clinical trials; the costs associated
with the scale-up of manufacturing; the time and costs required for regulatory
approvals; the time and costs involved in filing, prosecuting, enforcing and
defending patent claims; technological competition and market developments; the
establishment of and changes in collaborative relationships; and the cost of
commercialization activities and arrangements.
While the Company believes that its new products and technologies show
considerable promise, its ability to realize significant revenues therefrom is
dependent upon the Company's success in developing business alliances with
biotechnology and/or pharmaceutical companies to develop and market these
products. There is no assurance that the Company's effort to develop such
business alliances will be successful.
Over the last several years the Company has sold a substantial amount of
its bovine SOD ("bSOD") to Sanofi Winthrop. However, sales of bSOD to Sanofi
Winthrop are not expected to continue following Sanofi Winthrop's announcement
in October 1995 that a second Phase III trial on its drug, DISMUTEC(TM) (a
coupled form of the Company's bSOD) to treat trauma related to head injury
failed to show statistically significant improvement between the treatment and
control groups. European sales and royalties would decline further if bSOD is
withdrawn in Spain (see "Product Withdrawals in Europe; Licensees" below).
Therefore, future sales of bSOD are largely dependent on the needs of the
Company's Spanish licensee. Although the Spanish licensee has continued to
purchase bSOD in the first and second quarters of 1996, there are no assurances
that the Spanish licensee will order bSOD beyond 1996. Thus, the Company's sales
of bulk bSOD for 1996 and beyond are uncertain and difficult to predict and no
assurances can be given with respect thereto.
PRODUCT WITHDRAWALS IN EUROPE; LICENSEES.
The European market for OXIS' bSOD for human use has been adversely
impacted by a series of recent regulatory developments. During its twelve years
of commercial availability in Europe, more than twelve million injections
(representing more than two million courses of treatment) have been
administered. Orgotein for injection as a human pharmaceutical has been produced
by two different manufacturing methods. The first method involves production in
accordance with OXIS' proprietary manufacturing process by Diosynth B.V.
("Diosynth"), using USDA inspected bovine livers. This preparation of orgotein
for injection has been sold under the trade names Oxinorm(R) in Italy and
Ontosein(R) in Spain. The second method involves manufacturing orgotein from
bovine blood, rather than bovine livers. The resultant product was manufactured
and marketed under the trade name Peroxinorm(R) by Grunenthal GmbH
("Grunenthal"), the Company's German licensee.
10
The Company's three European licensees have been responsible for a
substantial, though decreasing, portion of the Company's revenues in recent
years. Sales to, and royalties from, Grunenthal (German licensee), Tedec-Meiji
Farma, S.A. ("Tedec-Meiji") (Spanish licensee) and SmithKline Beecham
Farmaceutici S.p.a. ("SmithKline Beecham") (Italian licensee) as a percentage of
the Company's total revenues for the past three years have been as follows:
1995 1994 1993
Grunenthal 2% 9% 23%
Tedec-Meiji1 6% 18% 8%
SmithKline
Beecham 0% 2% 7%
The Company expects that its revenues from sales to, and royalties from, its
European licensees in the foreseeable future will be substantially less than
historical levels. The Company does not anticipate any bSOD sales to European
licensees in 1996, other than to its Spanish licensee, and the amount of sales
to the Spanish licensee cannot be predicted.
In January 1994, the Italian government rendered a decision to exclude all
orgotein-containing products from the list of drugs eligible for patient
reimbursement. An appeal filed by OXIS' distributor of Oxinorm, SmithKline
Beecham, was denied. Subsequently, OXIS was informed that the Italian Health
Ministry has withdrawn the Marketing Authorization of all pharmaceutical
products composed of orgotein, including Oxinorm. SmithKline Beecham informed
the Company that it believed it was entitled to recover from the Company the
purchase price of all of its Oxinorm inventory. SmithKline Beecham's Oxinorm
inventory previously was purchased from the Company's German licensee
(Grunenthal). The Company has purchased SmithKline Beecham's Oxinorm inventory
and believes that it will have no further liability to Grunenthal or SmithKline
Beecham.
In addition, OXIS was notified in January 1994 that the government of
Austria had asked Grunenthal to withdraw Peroxinorm from the Austrian market. In
March 1994, as a result of two fatalities (December 1993 and February 1994) of
patients treated with Peroxinorm, the German Federal Health Administration asked
Grunenthal to remove Peroxinorm from the German market. No claim has been made
against the Company in connection with these two fatalities, and the Company
does not believe there is a substantial likelihood of any liability to it as a
result of these two fatalities.
In addition, the Company's licensee for Spain has had informal discussions
with the Spanish regulatory authorities regarding the Company's bSOD product.
Although no action has been taken by those authorities with regard to the
Company's product, future sales in Spain may be adversely affected by either
regulatory action in Spain, or safety concerns stemming from actions in other
countries. In addition, Grunenthal, the Company's German licensee, has advised
the Company that its Spanish subsidiary voluntarily withdrew its bSOD product
from the Spanish market.
The product withdrawals in various European countries have resulted in a
substantial reduction of sales under the Company's license agreement with
Grunenthal, which has caused a reduction in royalties being paid the Company
under that agreement. Sales of the Company's
11
bSOD produced by Diosynth have also been reduced as a result of the product
withdrawal in Italy.
FAILURE TO PROTECT TECHNOLOGY COULD ADVERSELY AFFECT RESULTS; POTENTIAL
CLAIMS OF PATENT INFRINGEMENT; EXPIRATION OF PATENTS.
The Company's success will depend in part on its proprietary products and
information. While OXIS has attempted to protect its proprietary products and
information through patents and trade secrets, there can be no assurance that
competitors will not be able to develop similar products and information
independently. No assurance can be given that patents will be issued on certain
of the Company's pending applications or that the claims allowed on any patents
held by the Company will be sufficiently broad to protect its products and
information. In addition, no assurance can be given that any patents issued to
the Company will not be challenged, invalidated or circumvented or that the
rights granted thereunder will provide competitive advantages to it.
In addition, the Company's products and its customers may be alleged to
have infringed third parties' patent rights. While such allegations are
commonplace in the industry and to date the Company has been able to license
necessary patents or technology on commercially reasonable terms, there can be
no assurance that the Company will be able to license necessary patents or
technology on commercially reasonable terms in the future. No assurances can be
given that the Company will prevail in any infringement litigation or that the
costs or damages from any such litigation would not materially and adversely
affect the Company.
Although the Company continues to have unpatented trade secrets and know-
how, substantially all of the Company's important U.S. and foreign patents
regarding SOD inventions (other than its recently developed, long-acting SOD
derivatives) have expired. Expiration of the Company's patents may enable other
companies to benefit from research and development efforts of the Company, but
such other companies would not receive the benefits of the Company's unpatented
trade secrets and know-how or unpublished preclinical or clinical data. Such
other companies would still be required in some countries to expend considerable
resources to conduct preclinical studies and clinical studies of their own
pharmaceutical preparations of SOD and to seek and secure governmental approval
to market such preparations.
GOVERNMENT REGULATION; PRODUCT CLEARANCE AND APPROVAL UNCERTAIN.
As with other companies in its industry, OXIS' preclinical development,
clinical trials, product manufacturing and marketing are subject to state and
federal regulation by the United States and other countries. Clinical trials and
product marketing and manufacturing are subject to the rigorous review and
approval processes of the United States Food and Drug Administration ("FDA") and
foreign regulatory authorities. The process of obtaining FDA and other required
regulatory approvals is lengthy and expensive. Typically, this requires the
expenditure of substantial resources and takes several years or more with
respect to therapeutic products, depending upon the type, complexity and novelty
of the product and the nature of the disease or other indication to be treated.
Preclinical studies must be conducted in conformance with the FDA's Good
Laboratory Practice regulations. Clinical testing must meet requirements for
Institutional Review Board ("IRB") oversight and informed consent by clinical
trial subjects, as well as prior FDA review, oversight and the FDA's Good
Clinical Practice requirements. Clinical trials may require large numbers of
test subjects, complex protocols and possibly
12
lengthy follow-up periods. OXIS has limited experience in conducting clinical
testing and in pursuing applications necessary to gain regulatory approvals.
Furthermore, the Company or the FDA may suspend clinical trials at any time if
either believes that the subjects participating in such trials are being exposed
to unacceptable health risks, including undesirable or unintended side effects.
Before receiving FDA approval to market a product, OXIS may have to
demonstrate that the product represents an improved form of treatment compared
to existing therapies. Data obtained from preclinical and clinical activities
are susceptible to varying interpretations, which could delay, limit or prevent
regulatory approvals. In addition, delays or rejections may be encountered based
upon additional government regulation from future legislation or administrative
action or changes in FDA policy during the period of product development,
clinical trials and FDA regulatory review. Delays in obtaining such approvals
could adversely affect marketing of OXIS' products. Delays in regulatory
approvals that may be encountered by OXIS' joint development partners and
licensees could adversely affect OXIS' ability to receive royalties or other
revenues. There can be no assurance that, after such time and expenditures,
regulatory approval will be obtained for any products developed by the Company.
Even after initial FDA approval has been obtained, further studies may be
required to provide additional data on safety or to gain approval for the use of
a product as a treatment for clinical indications other than those initially
targeted. Moreover, the FDA may reconsider its approval of any product at any
time and may withdraw such approval. In addition, before the Company's products
can be marketed in foreign countries, they are subject to regulatory approval in
such countries similar to that required in the United States. Furthermore,
approval may entail ongoing requirements for post-marketing studies.
The FDA's regulations require that any drug or formulation to be tested in
humans must be manufactured according to current Good Manufacturing Practices
regulations ("cGMPs"). This has been extended to include any drugs which will be
tested for safety in animals, in support of human testing. The cGMPs set certain
minimum requirements for procedures, record-keeping and the physical
characteristics of the laboratories used in the production of these drugs. In
addition, various federal and state laws, regulations and recommendations
relating to safe working conditions, laboratory practices, the experimental use
of animals and the purchase, storage, movement, import and export, use, and
disposal of hazardous or potentially hazardous substances, including radioactive
compounds and infectious disease agents, used in connection with the Company's
research work are or may be applicable to their activities. They include, among
others, the United States Atomic Energy Act, the Clean Air Act, the Clean Water
Act, the Occupational Safety and Health Act, the National Environmental Policy
Act, the Toxic Substances Control Act, and the Resources Conservation and
Recovery Act, national restrictions on technology transfer, import, export and
customs regulations, and other present and possible future local, state or
federal regulation. OXIS is unable to estimate the extent and impact of
regulation resulting from such future federal, state or local legislation or
administrative action.
Outside the United States, the Company's ability to market a product is
contingent upon receiving marketing authorization from the appropriate foreign
regulatory authorities, which may impose substantial additional costs and
burdens. The requirements governing the conduct of clinical trials, marketing
authorization, pricing and reimbursement vary widely from country to country.
Many countries also impose product standards, packaging requirements, labeling
requirements and import restrictions on drugs. Furthermore, the foreign
regulatory approval process may include all of the risks associated with FDA
approval set forth above.
13
RISK OF PRODUCT LIABILITY; USE OF HAZARDOUS MATERIALS; LIMITED INSURANCE
COVERAGE.
The testing, marketing and sale of human therapeutic products entails
significant risks. If the Company succeeds in developing products in these
areas, use of such products in trials and the sale of such products following
regulatory approval may expose the Company to liability claims allegedly
resulting from use of such products. These claims might be made directly by
consumers or others. OXIS currently has only limited insurance for its clinical
trials. Further, there can be no assurance that OXIS will be able to obtain and
maintain such insurance for all of its clinical trials or that coverage will be
in sufficient amounts to protect against damages for liability that could have a
material adverse effect on OXIS. There can also be no assurance that OXIS will
be able to obtain or maintain product liability insurance in the future on
acceptable terms or in sufficient amounts to protect the Company against damages
for liability that could have a material adverse effect on the Company.
In addition, the Company's research and development involves the controlled
use of hazardous materials, radioactive compounds and other chemicals. Although
the Company believes that its safety procedures for handling and disposing of
such materials comply with the standards prescribed by state and federal
regulations, the risk of accidental contamination or injury from these materials
cannot be completely eliminated. In the event of such an accident, the Company
could be held liable for any damages that result and any such liability could
exceed the resources of the Company. The Company may incur substantial costs to
comply with environmental regulations if the Company develops additional
manufacturing capacity.
COMPANY IS IN HIGHLY COMPETITIVE BUSINESS.
The pharmaceutical industry is highly competitive. Competition in most of
the Company's primary current and potential product areas from large
pharmaceutical companies, and other companies, universities and research
institutions is intense and expected to increase. Relative to the Company, many
of these entities have substantially greater capital resources, research and
development staffs, facilities and experience in conducting clinical trials and
obtaining regulatory approvals, as well as in manufacturing and marketing
diagnostic and pharmaceutical products. In addition, these and other entities
may have or may develop new technologies or use existing technologies that are,
or may in the future be, the basis for competitive products.
Any potential products that the Company succeeds in developing and for
which it gains regulatory approval will have to compete for market acceptance
and market share. For certain of the Company's potential products, an important
factor in such competition may be the timing of market introduction of
competitive products. Accordingly, the relative speed with which the Company can
develop products, complete the clinical testing and regulatory approval
processes and supply commercial quantities of the product to the market are
expected to be important competitive factors. The Company expects that a
competitive edge will be based, among other things, on product efficacy, safety,
reliability, availability, timing and scope of regulatory approval and product
price. There can be no assurance that the Company's competitors will not develop
technologies and products that are more effective than those being developed by
the Company. In addition, certain of the Company's competitors may achieve
product commercialization or patent protection prior to OXIS.
14
The Company's therapeutic drug monitoring products compete directly with
similar products from major diagnostic companies such as Abbott, Roche
Laboratories ("Roche"), E.I. DuPont de Nemours ("DuPont") and others. Since one
of the Company's business strategies is to provide alternative reagents to
customers who own or rent the Abbott TDx(R)/TDxFLx(R) analyzers, Abbott is the
Company's major competitor in this area. The Company competes based on high
product quality, an aggressive pricing strategy and technical services. The
Company seeks to protect itself from competition in connection with its
development of custom assays for pharmaceutical companies by generally obtaining
exclusive manufacturing and marketing rights. Market position for these unique
assays can be enhanced through patents and trade secrets, but in the absence of
such protection other companies could develop comparable assays; and even if
patent protection is obtained, competing companies could still develop
competitive assays.
The Company believes it is a leader in the development of assays for
markers of oxidative stress. Although there are currently a limited number of
competitors for the Company's assays to measure markers of oxidative stress, no
assurances can be given that significant competition will not arise in the
future. Two competitors in the area of oxidative stress testing are Randox
Laboratories, based in the United Kingdom, and Pantox Laboratories, based in San
Diego, California, in the United States. Both companies are privately held.
Some pharmaceutical companies are pursuing the development of synthetic
molecules to treat diseases of oxidative stress. The Company's major competitors
in the area of synthetic antioxidants include the Pharmacia and Upjohn Company
("Upjohn") and Transcend Therapeutics, Inc., formerly Free Radical Sciences,
Inc. ("Transcend Therapeutics"). Upjohn has a number of ongoing trials to test
the therapeutic potential of a group of synthetic compounds called Lazaroids in
several disease indications, and Transcend Therapeutics is testing a drug called
procysteine for use in Adult Respiratory Distress Syndrome and other diseases.
Natterman/Rhone Poulenc Rorer and Daiichi are also developing glutathione
peroxidase mimics.
MANUFACTURING/DEPENDENCE ON OTHERS.
Certain of the Company's products, and raw materials used in its products,
are produced by independent third parties. The Company is and will continue to
be dependent upon these third parties to produce products and supply materials
with acceptable quality and to deliver them to the Company in a timely manner.
The Company depends on these manufacturers to achieve acceptable manufacturing
yields and to allocate to the Company a sufficient portion of their capacity to
meet the Company's needs. The Company believes that its current third-party
suppliers have sufficient manufacturing capacity to expand production, if
necessary, for the foreseeable future. The Company has established a quality
control program, including a set of standard documentation procedures intended
to ensure that, where required, the Company's products are manufactured in
accordance with GMP. Although the Company has not experienced material quality
or allocation problems to date, there can be no assurance that such problems
will not have a material adverse effect on the Company's business, financial
condition and results of operations in the future. Furthermore, constraints or
delays in the supply of the Company's products and materials used therein could
result in the loss of customers, the delay of development projects and other
adverse effects on the Company's business, financial condition and results of
operations. The Company's reliance on third party manufacturers and suppliers
involves several other risks, including reduced control over delivery schedules,
quality assurance and costs. Foreign manufacturers and suppliers are subject to
additional risks such as changes in
15
governmental policies, imposition of tariffs and import restrictions and other
factors beyond the Company's control.
POSSIBLE HEALTH CARE REFORM LEGISLATION AND HEALTH CARE COSTS.
OXIS' ability to successfully commercialize human therapeutic products may
depend in part on the extent to which reimbursement for the cost of such
products and related treatment will be available from government health
administration authorities, private health coverage insurers and other
organizations. Significant uncertainty exists as to the reimbursement status of
newly approved healthcare products, and there can be no assurance that adequate
third party coverage will be available for OXIS to maintain price levels
sufficient for realization of an appropriate return on its investment in product
development. Government and other third-party payers are increasingly attempting
to contain healthcare costs by limiting both coverage and the level of
reimbursement for new therapeutic products approved for marketing by the FDA and
by refusing, in some cases, to provide any coverage for uses of approved
products for disease indications for which the FDA has not granted marketing
approval (so-called off-label usage). If adequate coverage and reimbursement
levels are not provided by government and third-party payers for uses of OXIS'
healthcare products, the market acceptance of these products would be adversely
affected.
In addition, as with other companies which supply products and services to
the health care industry, the Company faces an uncertain legislative
environment. Over the last few years, the United States Congress, the President
and various state governments have advanced various health care bills that could
significantly alter the structure of the health care industry. Regardless of
whether or not a health care bill is adopted, private businesses are placing
increasing pressure on health care providers to reduce costs. As a result of
these factors, the Company may be forced to reduce the prices of its
pharmaceutical products. This uncertain legislative and business environment may
also adversely affect the Company's ability to raise capital.
FOREIGN CURRENCY AND TAX EXPOSURE.
The Company's French subsidiary conducts virtually all of its non-U.S.
business in currencies other than the U.S. dollar and the Company buys and sells
the majority of its SOD in a foreign currency. Accordingly, foreign currency
fluctuations may affect the Company's earnings and asset valuations. The Company
may be affected by laws affecting its ability to repatriate foreign profits, if
any, and by foreign tax laws, as well as by fluctuating tax rates and changes in
international tax treaties. There can be no assurance that laws and changes such
as these will not have a material adverse impact on the Company's operations.
LABOR LAWS IN FRANCE.
Approximately forty percent (40%) of the Company's personnel are located in
France. The Company is subject to the Convention Collective Nationale des
Industries Chimiques (Chemical Industry Convention) which regulates the terms of
employment contracts and employment conditions and determines certain mandatory
obligations of the Company regarding wages and benefits of employees. In
particular, French labor laws offer employees certain rights in the event of
termination which do not exist under U.S. laws. For example, severance costs in
connection with terminated employees in France typically amount to half of the
employee's annual salary. French labor laws may inhibit management's ability to
take future personnel
16
actions or implement certain operating plans (such as reducing the size of the
French subsidiary's operations).
INTERNATIONAL SALES.
The Company expects that international sales will continue to account for a
substantial portion of the Company's future revenues for the foreseeable future.
The Company's business in foreign markets is and will be subject to the risks
customarily associated with such activities, including fluctuations in foreign
currency exchange rates and controls, expropriation, nationalization and other
economic, tax and regulatory policies of foreign governments as well as the laws
and policies of the United States affecting foreign trade and investment.
FAILURE TO ATTRACT OR RETAIN KEY PERSONNEL COULD ADVERSELY AFFECT RESULTS.
The Company is dependent upon the efforts and abilities of a number of its
key personnel. The success of the Company depends to a large extent upon its
ability to retain and attract key employees. Chief Operating Officer, Dr.
Timothy C. Rodell, M.D., joined the Company in March 1996. In particular, Dr.
Rodell's clinical experience will be critical in helping the Company design,
submit and initiate clinical trial protocols in the United States. Also,
President and Chief Executive Officer, Dr. Anna D. Barker, Ph.D., has built
long-standing academic and corporate relationships valuable to the Company's
professional affiliations and potential corporate alliances. The loss of key
employees or the Company's inability to attract and retain other key employees
could materially adversely affect results of operations. This effect could be
particularly significant if the Company needs to hire, train and assimilate
large numbers of new employees. The Company is not subject to any collective
bargaining agreements (other than the Chemical Industry Convention in France
discussed under "Labor Laws in France" above), and believes its relationship
with its employees is good.
Volatility of Stock Price; Shares Available for Future Sale; Absence of
Dividends.
The market prices for securities of biotechnology and pharmaceutical
companies, including the securities of OXIS, have been volatile. Announcements
of technological innovations or new commercial products by OXIS or its
competitors, a change in status of a corporate partner, developments concerning
proprietary rights, including patents and litigation matters, publicity
regarding actual or potential medical results with products under development by
OXIS, regulatory developments in both the United States and foreign countries
and public concern as to the safety of biotechnology or of pharmaceutical
products, as well as period-to-period fluctuations in revenues and financial
results, may have a significant impact on the market price of the Company's
Common Stock. OXIS has not paid any cash dividends since its inception, and it
does not anticipate paying cash dividends in the foreseeable future.
As of August 20, 1996, the Company had 13,289,896 shares of Common Stock
outstanding. 2,200,000 shares of Common Stock are reserved for issuance under
the Company's 1994 Stock Incentive Plan (the "Plan"). The Company has options or
warrants outstanding to purchase a total of approximately 2,754,794 shares of
Common Stock of which options to purchase 214,699 shares of Common Stock were
granted in connection with the Combination and of which options to purchase
1,018,000 shares have been granted pursuant to the Plan. Pursuant to a
Registration Statement on Form S-3 declared effective by the Securities and
Exchange Commission on September 13, 1995, the Company registered an aggregate
of
17
5,075,073 shares of Common Stock, which may now be sold into the public
securities markets. (The foregoing 5,075,073 shares of Common Stock are included
in the section of this Prospectus entitled "Selling Stockholders" because this
Prospectus is intended for use in connection with the resale of such securities
in addition to those shares being registered pursuant to the Registration
Statement being filed currently.) Pursuant to a Registration Statement on Form
S-8 effective upon filing with the Securities and Exchange Commission on
November 20, 1995, the Company registered for resale 1,200,000 shares of Common
Stock under the Plan and 85,781 additional shares subject to certain other
options. These shares may now be sold into the public securities markets upon
issuance under the Plan or exercise of the options outside of the Plan. Pursuant
to the Registration Statement, the Company is registering for resale an
aggregate of 1,050,217 shares issued on conversion of its 8% convertible
debentures due December 31, 1997, and 301,200 shares (including 100,400 shares
issuable on conversion of the Company's placement agent's warrant) issuable on
exercise of the warrants executed in connection with its 8% convertible
subordinated debentures. The Company is also registering for resale the shares
of Common Stock issued in connection with the Company's acquisition of Therox
Pharmaceuticals, Inc. (1,440,736 shares) and the shares of Common Stock issuable
upon conversion of Series B Preferred Stock (642,583 shares) in this
Registration Statement. Additionally, the Company is registering for resale an
aggregate of 2,451,499 shares of Common Stock issuable upon conversion of Series
C Preferred Stock, an aggregate of 2,424,884 shares of Common Stock issuable
upon conversion of Series D Preferred Stock, an aggregate of 810,126 shares
issuable upon exercise of the warrants issued in connection with such Series D
Preferred Stock, and an aggregate of 85,632 shares of Common Stock issuable upon
exercise of warrants issued to the Company's placement agent in connection with
the placement of Series C Preferred Stock.
Subject to certain agreements limiting the number of shares certain of the
Selling Stockholders may sell (see "Plan of Distribution"), these shares may be
sold into the public securities markets after this Registration Statement
becomes effective. The registration of Common Stock pursuant to this
Registration Statement will result in an increase of approximately 67% in the
number of shares of the Company's Common Stock available for trading in the
public securities market. Future sales of Common Stock in the public securities
markets may cause substantial fluctuations (including substantial price
reductions) in the price of the Company's Common Stock over short time periods.
Additionally, the price of the Company's Common Stock will be sensitive to the
performance and prospects of the Company and other factors.
SHARE OWNERSHIP BY CERTAIN INDIVIDUALS AND CONCENTRATION OF OWNERSHIP.
As of August 20, 1996, Ray R. Rogers, the Chairman of OXIS, owned 675,701
shares of Common Stock and options to purchase shares of Common Stock (excluding
140,771 shares owned by an irrevocable trust for the benefit of Mr. Rogers'
children as to which shares Mr. Rogers has no control). Dr. Anna D. Barker, the
President and Chief Executive Officer of OXIS, owns 951,472 shares of Common
Stock and options. Ownership of such Common Stock and Options represents control
by Mr. Rogers and Dr. Barker of approximately 4.43% and 6.23% of the voting
securities of OXIS, respectively. Alta-Berkeley L.P., II is the owner of 550,774
shares of Common Stock and options and an additional 199,342 shares of Common
Stock issuable upon conversion of Series C Preferred Stock, representing
approximately 4.58% of the voting securities of the Company. David Needham, a
director of OXIS and a consultant to the investment advisory firm which advises
Alta-Berkeley L.P. II, has a stock option entitling him to purchase 20,000
shares of Common Stock. Dr. Needham disclaims beneficial ownership of
18
shares of Common Stock owned by Alta-Berkeley L.P. II. Timothy G. Biro, a
director of OXIS, has been granted options to purchase an aggregate of 20,000
shares of Common Stock under the Plan, and is a general partner of Brantley
Venture Partners II, L.P., a Delaware limited partnership which owns an
aggregate of 550,699 shares of Common Stock and an aggregate of 214,194 shares
of the Company's Series B Preferred Stock (convertible into Common Stock on
approximately a one-to-one basis), for an aggregate of 764,893 shares of OXIS
stock (approximately 5.04% of the voting securities of OXIS). S.R. One, Limited
owns 428,389 shares of Series B Preferred Stock, which together with its 549,497
shares of Common Stock, give it an aggregate of 977,886 shares of OXIS stock
(approximately 6.44% of the voting securities of OXIS). As the largest
stockholders of OXIS, Mr. Rogers, Dr. Barker, Alta-Berkeley L.P. II, Brantley
Venture Partners II, L.P., and S.R. One, Limited are in a position to
significantly influence the outcome of matters (including the election of
directors, and any merger, consolidation or sale of all or substantially all of
the Company's assets) submitted to the Company's stockholders for approval. As a
result, certain transactions may not be possible without the approval of Mr.
Rogers, Dr. Barker, Alta-Berkeley L.P. II, Brantley Venture Partners II, L.P.,
and S.R. One Limited. In addition, the Company's directors, executive officers
and principal stockholders and certain of their affiliates, as a group, have the
ability to influence the election of the Company's directors and most other
stockholder actions.
QUARTERLY OPERATING RESULTS AFFECTED BY MANY BUSINESS FACTORS.
The Company has experienced fluctuations in quarterly results and is likely
to continue to experience such fluctuations. Expense levels are based, in part,
on expectations of future revenues. If revenue levels in a particular quarter
are less than expected, operating results will be affected adversely, which may
have an adverse impact on the market price of the Company's Common Stock. A
variety of factors have an influence on the level of revenues and expenses in a
particular quarter. These factors include specific economic conditions in the
pharmaceutical industry, the withdrawal or failure to grant requisite government
approvals, customer cancellations or delay of shipments, production delays,
exchange rate fluctuations, management decisions to commence or discontinue
product lines, the introduction of new products by the Company or its
competitors, the timing of research and development expenditures, and expenses
attendant to acquisitions, strategic alliances and the further development of
marketing and service capabilities.
19
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock by
the Selling Stockholders in the offering. The Company will receive a maximum
aggregate amount of $5,340,800 assuming the exercise of all warrants and options
for which the resale of Common Stock is registered hereby. No assurances can be
given by the Company as to the exercise of any of such warrants or options.
Proceeds from the exercise of such warrants and options, if any, are anticipated
to be used for working capital purposes.
20
SELLING STOCKHOLDERS
The following table sets forth the names of the Selling Stockholders, the
number of shares of Common Stock owned beneficially by each of the Selling
Stockholders as of August 20, 1996, and the number of shares which may be
offered for resale pursuant to this Prospectus. This information is based upon
information provided by the Selling Stockholders. Because the Selling
Stockholders may offer all, some or none of their Common Stock, no definitive
estimate as to the number of shares thereof that will be held by the Selling
Stockholders after such offering can be provided and the following table has
been prepared on the assumption that all shares of Common Stock under this
Prospectus will be sold.
Shares Beneficially Shares Being Shares Beneficially Owned After
Owned Prior to Offered Offering(3)
Offering(1)(2)
Name Number Number Number Percentage(4)
---- ------ ------ ------ ------------
Russell E. Teasdale(5) 220,000 220,000 0 0
Mark G.P. Saifer (5)(7) 195,000 195,000 0 0
L. David Williams(5) 55,000 15,000 40,000 *
Marc A. Fisher(5) 35,000 35,000 0 0
Carol C. Golsch(5) 20,000 20,000 0 0
Carl Claassen(5) 5,000 5,000 0 0
Rima Agamian(5) 2,500 2,500 0 0
Ralph Somack(5) 47,500 47,500 0 0
Anna D. Barker(8) 951,471 876,138 75,333 *
H. Gerald Bidwell 13,016 13,016 0 0
Cascadia Pacific
Management, Inc. 13,543 13,543 0 0
Daniel Cawley(9) 8,660 8,025 635 *
Terryl Dank(10) 12,797 11,369 1,428 *
Kari Henderson(11) 3,627 2,675 952 *
Debbie Heuvelhorst(12) 1,779 351 1,428 *
Charles Martin(13) 44,675 18,057 26,618 *
21
Shares Beneficially Shares Being Shares Beneficially Owned After
Owned Prior to Offered Offering(3)
Offering(1)(2)
Name Number Number Number Percentage(4)
---- ------ ------ ------ ------------
Stephen H. Mastin(14) 51,660 50,160 1,500 *
Paul Mueggler(15) 59,611 34,778 24,833 *
Dennis Murray(16) 7,213 6,420 793 *
Jon S. Pitcher(17)(18) 54,084 21,625 32,459 *
Harry Roberts(19) 9,344 9,344 0 0
Ray R. Rogers(20) 675,701 580,368 95,333 *
George Spencer as
Trustee for Rogers'
Trusts dated
March 7, 1994(21) 140,771 140,771 0 0
Ken Stenglein(22) 5,474 4,681 793 *
Anthony Miadich(23) 7,500 7,500 0 0
Oregon Resource
and Technology
Development Fund(25) 20,000 20,000 0 0
Lynda Taylor(24) 61,059 28,758 32,301 *
Innolion(26)(27) 677,512 738,331 0 0
Alta-Berkeley L.P.
II(27)(28) 750,116 838,712 0 0
Sofinnova S.A(27)(29) 223,988 251,855 0 0
Sofinnova Capital FCPR(27)(30) 336,072 377,872 0 0
Finovelec(27)(31) 575,317 644,453 0 0
Hemera II & Cie 132,630 132,630 0 0
Euroventures Germany C.V. 34,212 34,212 0 0
22
Shares Beneficially Shares Being Shares Beneficially Owned After
Owned Prior to Offered Offering(3)
Offering(1)(2)
Name Number Number Number Percentage(4)
---- ------ ------ ------ ------------
Chimtex S.A. 27,117 27,117 0 0
Finbiotec SPA 31,785 31,785 0 0
Sumaru S.r.1 21,895 21,895 0 0
Sea Farming S.r.1 21,895 21,895 0 0
Jean Chaudie re(32) 119,499 119,499 0 0
Christian Manuel 76,864 76,864 0 0
Estate of Pr. A.
Crastes de Paulet(33) 13,362 13,362 0 0
Andre Capron 762 762 0 0
Michel Rigaud(34) 13,366 13,366 0 0
Catherine Rice Evans 754 754 0 0
Bernard Jacotot 754 754 0 0
Yves Grosgogeat 754 754 0 0
Jean-Claude Yadan 62,715 36,138 26,577 *
Henry-Michel Bouillet 670 670 0 0
Andre Galli 503 503 0 0
Jacques Emerit 503 503 0 0
Marc Lange 503 503 0 0
John B. Hawken(35) 24,231 24,231 0 0
Marc Moutet(36) 48,731 29,784 18,947 *
Irene Erdelmeier 24,911 24,911 0 0
Bailey & Co.(37) 208,395 208,395 0 0
Brantley Venture Partners 764,893 764,893 0 0
23
Shares Beneficially Shares Being Shares Beneficially Owned After
Owned Prior to Offered Offering(3)
Offering(1)(2)
Name Number Number Number Percentage(4)
---- ------ ------ ------ ------------
II, L.P.(38)
S.R. One, Limited(39) 977,886 977,886 0 0
Ohio State University
Research Foundation 87,131 87,131 0 0
William B. Weglicki 72,610 72,610 0 0
Donald T. Witiak 53,005 53,005 0 0
Bruce Freeman 21,783 21,783 0 0
Pierre L. Triozzi 4,357 4,357 0 0
Dennis R. Feller 2,904 2,904 0 0
Cynthia Brogan 2,179 2,179 0 0
John Zemniak(40) 74,276 72,610 1,666 *
Robert Johnson 14,522 14,522 0 0
Ronald Borchardt 5,809 5,809 0 0
Allen Hopper 3,630 3,630 0 0
Sanctus Spiritus Antilles
N.V.(50) 150,258 150,258 0 0
Banque Nationale
de Paris (Luxembourg)
S.A.(41) 49,858 49,858 0 0
Marc Alexandre(41) 49,858 49,858 0 0
Bernard Herodin(41) 49,858 49,858 0 0
S. Czigler(41) 49,858 49,858 0 0
M. Kraland-Klein(41) 49,858 49,858 0 0
R. Marshall(41) 49,858 49,858 0 0
Van Geest Beheer
B.V.(41) 49,858 49,858 0 0
24
Shares Beneficially Shares Being Shares Beneficially Owned After
Owned Prior to Offered Offering(3)
Offering(1)(2)
Name Number Number Number Percentage(4)
---- ------ ------ ------ ------------
Van Geest(41) 49,858 49,858 0 0
Montaigne Fund N.V.(41) 49,858 49,858 0 0
Legong Investments, N.V.(42) 99,717 99,717 0 0
Veer Palthe Voute(43) 199,434 199,434 0 0
Banque Industrielle et Mobiliere
Privee(44) 149,575 149,575 0 0
Tocqueville N.V.(44) 149,575 149,575 0 0
Masidu N.V.(42) 99,717 99,717 0 0
Purling Holdings
Limited(45) 39,578 39,578 0 0
C.S. Rennie(46) 14,841 14,841 0 0
Marc Dumont(47) 76,977 111,189 0 0
Legong Investments
N.V.(47) 153,846 222,222 0 0
Rauch & Co. (47) 200,000 288,889 0 0
Megapolis B.V.(47) 19,230 27,777 0 0
Gestor Finances(47) 50,000 72,222 0 0
Henri Brunesholz(47) 10,000 14,444 0 0
Marc Rebagliati(47) 46,000 66,444 0 0
Carlo Gillet(47) 31,000 44,778 0 0
D.N.B. Fund Partners 76,923 76,923 0 0
Sharon L. Carpenter,(47)
IRA Guarantee & Trust Co., TTEE 38,461 55,555 0 0
Deborah A.Y. Day, (47)
IRA Guarantee & Trust Co., TTEE 76,923 111,111 0 0
25
Shares Beneficially Shares Being Shares Beneficially Owned After
Owned Prior to Offered Offering(3)
Offering(1)(2)
Name Number Number Number Percentage(4)
---- ------ ------ ------ ------------
Guarantee & Trust
Co.,(47) TTEE FBO
Sylvia E. Morio, IRA 38,461 55,555 0 0
Maxine T. Yakushijin,(47)
IRA Guarantee & Trust Co., TTEE 76,923 111,111 0 0
Terrance Y. Yoshikawa,(47)
IRA Guarantee & Trust Co., TTEE 397,290 222,222 243,444 1.83%
America Health Care Fund,
L.P.(47)(51) 77,000 111,222 0 0
Capital Venture
International(48) 3,235,010 3,235,010 0 0
Jackson Tufts Cole & Black,
LLP(49) 35,000 35,000 0 0
Wasserstein Perella & Company,
Inc. 25,000 25,000 0 0
Total: 14,252,247 14,381,499 625,040 4.52%
========== ========== ======= =====
* less than 1% of the issued and outstanding Common Stock of the Company.
(1) Unless otherwise indicated in the footnotes to this table, the
persons and entities named in the table have sole voting and sole
investment power with respect to all shares beneficially owned, subject
to community property laws where applicable. The shares in this table
include an aggregate of 5,075,073 shares of Common Stock registered on
Registration Statement No. 33-61087 on Form S-3.
(2) As required by regulations of the Securities and Exchange Commission,
the number of shares in the table includes shares which can be purchased
within 60 days.
(3) Assumes the sale of all shares offered hereby. As required by
regulations of the Securities and Exchange Commission, each percentage
reported in the table for these individuals is calculated as though
shares which can be purchased within 60 days have been purchased by the
respective person or group and are outstanding.
(4) Applicable percentage of ownership is based on 13,289,896 shares of
Common Stock outstanding on August 20, 1996.
(5) Includes with respect to the following persons, the following number
of shares which may be acquired through the exercise of stock warrants:
Russell E. Teasdale (220,000); Mark G.P. Saifer (195,000); L. David
Williams (15,000); Mark Fisher (35,000); Carol Golsch (20,000); Carl
Claassen (5,000); Rima Agamian (2,500); Ralph Somack (47,500).
(6) This footnote was intentionally left out.
26
(7) Mark Saifer resigned as an executive officer of the Company during
1995.
(8) Anna Barker is a director of the Company and its President and Chief
Executive Officer. Figure in first column includes 73,333 shares which
may be acquired by exercise of options.
(9) Includes 635 shares which may be acquired on exercise of options.
(10) Includes 1,428 shares which may be acquired on exercise of options.
(11) Includes 952 shares which may be acquired on exercise of options.
(12) Includes 1,428 shares which may be acquired on exercise of options.
(13) Includes 22,618 shares which may be acquired on exercise of options.
(14) Includes 1,500 shares which may be acquired on exercise of options.
(15) Includes 24,833 shares which may be acquired on exercise of options.
(16) Includes 793 shares which may be acquired on exercise of options.
(17) Includes 32,459 shares which may be acquired on exercise of options.
(18) Jon Pitcher is the Company's Chief Financial Officer and Secretary.
(19) Includes 6,000 shares which may be acquired on exercise of options.
(20) Ray R. Rogers is a director and the Chairman of the Board of
Directors of the Company. Figure in first column includes 10,000 shares
owned by his individual retirement account, as to which Rogers exercises
voting and investment power, and excludes 140,771 shares owned by an
irrevocable trust for the benefit of his children. George C. Spencer is
the trustee under such irrevocable trust. George C. Spencer is a partner
of Tonkon, Torp, Galen, Marmaduke & Booth, a law firm which represents
the Company. Figure in first column also includes 78,333 shares which
may be acquired by exercise of options.
(21) See Note (20) above.
(22) Includes 793 shares which may be acquired on exercise of options.
(23) Includes 7,500 shares which may be acquired on exercise of options.
(24) Includes 32,301 shares which may be acquired on exercise of options.
(25) Includes 20,000 shares which may be acquired on exercise of options.
(26) Includes 18,424 shares which may be acquired on exercise of options.
(27) The number in the first column in each case includes the number of shares
of Common Stock which may be acquired by the holder of Series C Preferred
Stock currently (within 60 days), as follows: Innolion (136,842 shares),
Alta-Berkeley L.P. II (199,342 shares), Sofinova S.A. (62,700 shares),
Sofinova Capital FCPR (94,051 shares) and Finovelec (155,555 shares). The
number in the second column in each case includes the maximum number of
shares which may be issued pursuant to the terms of the Company's Series
C Preferred Stock based on the adjustable conversion price of the Series
C Preferred (see footnote 47), as follows: Innolion (197,661 shares),
Alta-Berkeley L.P. II (287,938 shares), Sofinova S.A. (90,567 shares),
Sofinova Capital FCPR (135,851 shares) and Finovelec (224,691 shares).
The foregoing holders acquired the foregoing shares of Series C Preferred
Stock in exchange for cancellation of promissory notes.
(28) Includes 16,452 shares which may be acquired on exercise of options.
(29) Includes 4,792 shares which may be acquired on exercise of options.
(30) Includes 7,184 shares which may be acquired on exercise of options.
27
(31) Includes 2,786 shares which may be acquired on exercise of options.
(32) Jean Chaudiere resigned as an executive officer of the Company
during 1995.
(33) Includes 5,963 shares which may be acquired upon exercise of
options.
(34) Includes 5,963 shares which may be acquired upon exercise of
options.
(35) Includes 23,854 shares which may be acquired on exercise of options.
(36) Includes 18,947 shares which may be acquired on exercise of options.
(37) Includes 122,763 shares which may be acquired on exercise of
warrants issued in connection with the sale of Common Stock, and 85,632
shares which may be acquired on exercise of warrants issued in connection
with the sale of certain shares of Series C Preferred Stock.
(38) Includes 214,194 shares issuable upon conversion of Series B
Preferred Stock.
(39) Includes 428,389 shares issuable upon conversion of Series B
Preferred Stock.
(40) Includes 1,666 shares which may be acquired on exercise of options.
(41) Includes 8,000 shares issuable upon exercise of warrants.
(42) Includes 16,000 shares issuable upon exercise of warrants.
(43) Includes 32,000 shares issuable upon exercise of warrants.
(44) Includes 24,000 shares issuable upon exercise of warrants.
(45) Includes 6,400 shares issuable upon exercise of warrants.
(46) Includes 2,400 shares issuable upon exercise of warrants.
(47) The number in the first column in each case constitutes the number of
shares of Common Stock which may be acquired by the holder of Series C
Preferred Stock currently (within 60 days). The number in the second
column in each case constitutes the maximum number of shares which may be
issued pursuant to the terms of the Company's Series C Preferred Stock,
which provide that if at any time after six (6) months following the
final sale of Series C Preferred Stock (such sale having occured on May
9, 1996), any holder converts the Series C Preferred Stock, then the
Series C Preferred Stock conversion price ("Series C Conversion Price")
applicable to such holder's shares shall be the lesser of (i) $1.30, or
(ii) the greater of (x) .90 or (y) 80% of the average closing bid price
of the Common Stock for the fifteen (15) consecutive trading days ending
on the date immediately preceding the date notice of conversion is given.
The Series C Conversion Price may only adjust once for each holder.
(48) Number in first column constitutes maximum number of shares of Common
Stock issuable upon conversion of Series D Preferred Stock and exercise
of warrants issued in connection with such Series D Preferred Stock. An
aggregate of 810,126 shares of Common Stock are issuable on exercise of
warrrants. The Series D Preferred Stock entitles the holder thereof to
receive a number of shares of Common Stock determined by dividing the
stated value of the Series D Preferred Stock (i.e., $1,000 per share),
plus a premium in the amount of 8% per annum of the stated value from the
date of issuance (unless the Company chooses to redeem the shares
otherwise issuable in respect of that premium), by a conversion price
equal to the lesser of (i) $2.30 and (ii) a percentage (ranging from 100%
on or before June 24, 1996 to 75% after July 3, 1996) of the average of
the closing bid prices for shares of Common Stock for the five trading
days immediately prior to conversion, subject to adjustment upon the
occurrence of certain dilutive events. Under the applicable conversion
formula, the number of shares of Common Stock currently issuable upon
conversion of the Series D Preferred Stock (869,565) would be higher if
the market price of the Common Stock at the time of conversion decreases
to a point at which the conversion price falls below the fixed conversion
price. However, the maximum number of shares of Common Stock issuable
upon conversion of the Series D Preferred Stock is 2,424,884 shares
(subject to adjustment upon the occurrence of certain dilutive events).
Additional shares of Common Stock may also be issued to, and sold
hereunder by, Capital Ventures International pursuant to the anti-
dilution provisions contained in the Series D Preferred
28
Stock and warrants. Pursuant to the terms of the Series D Preferred Stock
and the warrants issued in connection therewith, the holder thereof can
only acquire shares of Common Stock upon conversion of the Series D
Preferred Stock and exercise of the warrants to the extent that the
number of shares of Common Stock thereby issuable, together with a number
of shares of Common Stock then held by such holder and its affiliates
(not including shares of Common Stock underlying unconverted shares of
Series D Preferred Stock and unexercised warrants) would not exceed 4.9%
of the then outstanding Common Stock as determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended.
Accordingly, the number of shares of Common Stock set forth herein to be
sold by Capital Ventures International may exceed the actual number of
shares of Common Stock that it could own beneficially at any time through
its ownership of Series D Preferred Stock and such warrants.
(49) Number in first column constitutes 35,000 shares which may be
acquired on exercise of options.
(50) Includes 108,400 shares issuable upon exercise of warrants.
(51) America Health Care Fund, L.P. is a limited partnership of which
James McCamant, a director of the Company, is the general partner.
29
PLAN OF DISTRIBUTION
The Company is registering the shares of Common Stock offered by the
Selling Stockholders hereunder in certain instances on a voluntary basis and
otherwise pursuant to (i) the terms of the offering of convertible debentures
with warrants concluded in December 1995, (ii) the Registration Rights
Agreements entered into on September 7, 1994 with respect to the acquisitions of
Bioxytech S.A. and International BioClinical, Inc., (iii) Registration Rights
Agreements entered into on July 18, 1995 in connection with the acquisition of
Therox Pharmaceuticals, Inc. and the sale of Series B Preferred Stock (the
"Restricted Registration Rights Agreements"), (iv) the terms of warrants dated
March 13, 1987 through August 21, 1988, (v) engagement letters providing for
warrants for the Company's placement agent dated May 23, 1995 and June 27, 1995,
as amended, (vi) contractual agreement to register the underlying shares of
Common Stock in connection with the offering and sale of Series C Convertible
Preferred Stock concluded May 9, 1996, and (vii) the Registration Rights
Agreement entered into on May 15, 1996 with respect to the Common Stock
underlying the Series D Convertible Preferred Stock and warrants to purchase
Common Stock sold in connection with such Series D Convertible Preferred Stock.
Pursuant to the terms of the Restricted Registration Rights Agreements, no
Selling Stockholders party to the Restricted Registration Rights Agreements may
sell during (i) any three month period while this Registration Statement is in
effect, a number of shares of Common Stock which are Registrable Securities (as
defined in the Restricted Registration Rights Agreements) that is greater than
one percent (1%) of the number of issued and outstanding Common Stock at such
time and (ii) any single month while this Registration Statement is in effect, a
number of shares of Registrable Securities that is more than one-third (1/3) of
one percent (1%) of the number of issued and outstanding Common Stock at such
time. Within ten (10) days following the last day of any month in which a
Selling Stockholder party to the Restricted Registration Rights Agreements sells
Registrable Securities, any such Selling Stockholder must notify the Company of
the number of shares of Registrable Securities sold by such Selling Stockholder.
The Restricted Registration Rights Agreements also provide that if the
Company proposes to register any of its stock or other securities under the
Securities Act in connection with an underwritten public offering of such
securities solely for cash, the Company shall, at such time, promptly give each
Selling Stockholder party to the Restricted Registration Rights Agreements
written notice of such registration, and in connection with such public
offering, the Selling Stockholders party to the Restricted Registration Rights
Agreements have agreed not to sell any of the Registrable Securities during such
customary lock-up period requested by the Company's underwriters who are
underwriting such public offering. The Selling Stockholders party to the
Restricted Registration Rights Agreements shall have no right to participate in
any such public offering.
Subject to the foregoing restrictions with respect to those Selling
Stockholders which are parties to the Restricted Registration Rights Agreements,
the shares of Common Stock offered hereunder may be sold from time to time by
the Selling Stockholders, or by pledgees, donees, transferees or other
successors in interest. Such sales may be made on the Nasdaq National Market or
in the over-the-counter market or otherwise at prices and on terms then
prevailing or related to the then current market price, or in negotiated
transactions. The shares of Common Stock may be sold to or through one or more
broker-dealers, acting as agent or principal in
30
underwriting offerings, block trades, agency placements, short sales, exchange
distributions, brokerage transactions or otherwise, or in any combination of the
foregoing.
The Company is bearing the costs relating to the registration of the shares
of Common Stock offered hereby. In connection with any transaction involving the
Common Stock, broker-dealers or others may receive from the Selling
Stockholders, and may in turn pay to other broker-dealers or others,
compensation in the form of commissions, discounts or concessions in amounts to
be negotiated at the time. 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 Act in connection with such distribution, and any such
commissions, discounts or concessions may be deemed to be underwriting discounts
or commissions under the Act.
Any or all of the sales or other transactions involving the Common Stock
described above, whether effected by the Selling Stockholders, any broker dealer
or others, may be made pursuant to this Prospectus. In addition, any shares of
Common Stock that qualify for sale pursuant to Rule 144 under the Act may be
sold under Rule 144 rather than pursuant to this Prospectus.
In order to comply with the securities laws of certain states, if
applicable, the Common Stock may be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, shares of Common Stock
may not be sold unless they have been registered or qualified for sale or an
exemption from registration or qualification requirements is available and is
complied with under applicable state securities laws.
The Company and certain of the Selling Stockholders have agreed, and
hereafter may further agree, to indemnify certain persons, including certain of
the Selling Stockholders, persons controlling certain Selling Stockholders and
the underwriters for such Selling Stockholders, broker-dealers or others,
against certain liabilities in connection with any offering of the Common Stock,
including liabilities arising under the Act.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Jackson Tufts Cole & Black, LLP, San Jose, California. Jackson Tufts
Cole & Black, LLP is the beneficial owner of options to purchase 35,000 shares
of the Common Stock of the Company.
EXPERTS
The financial statements and schedules incorporated by reference in this
Prospectus from the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995, as amended, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report which is incorporated herein by
reference (which report expresses an unqualified opinion and includes an
explanatory paragraph referring to the Company's ability to continue as a going
concern), and the financial statements of Therox Pharmaceuticals, Inc.
incorporated by reference in this Prospectus from the Company's Current Report
on Form 8-K/A filed with the Commission on September 29, 1995, have been audited
by Barna, Kowall & Company. Such
31
financial statements and schedules have been so incorporated in reliance upon
the reports of such firms given upon their authority as experts in accounting
and auditing.
INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Company, the
Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
32
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses, other than the underwriting
discounts and commissions, payable by the Registrant in connection with the sale
of the Common Stock being registered. All the amounts shown are estimates except
for the registration fee.
Registration fee $ 8,202
Blue sky qualification fees and expenses 5,000
Printing and engraving expenses 5,000
Legal fees and expenses 25,000
Accounting fees and expenses 5,000
Miscellaneous 5,000
------
Total $53,202
======
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
The Company has the power, pursuant to Section 102(7) of the Delaware
General Corporation Law, to limit the liability of directors of the Company for
certain breaches of fiduciary duty and, pursuant to Section 145 of the Delaware
General Corporation Law, to indemnify its officers and directors and other
persons for certain acts.
The Company's Restated Certificate of Incorporation includes the
following provisions:
"A director of the Company shall not be personally liable to the company
or its stockholders for monetary damages for breach of fiduciary duty as
a director, except for liability (i) for any breach of the director's
duty of loyalty to the Company or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director
derived an improper personal benefit. If the Delaware General
Corporation Law is amended to authorize corporate action further
eliminating or limiting the personal liability of directors, then the
liability of a director of the Company shall be eliminated or limited to
the fullest extent permitted by the Delaware General Corporation Law, as
so amended. Any repeal or modification of this Article by the
stockholders of the Company shall not adversely affect any right or
protection of a director of the Company existing at the time of such
repeal or modification."
"The Company shall indemnify any and all persons whom it has the power to
indemnify pursuant to the General Corporation Law of Delaware against any
and all expenses, judgments, fines, amounts paid in settlement, and any
other liabilities to the fullest extent permitted by such law and may at
the discretion of the Board of Directors, purchase and maintain
insurance, at its expense, to protect itself and such persons against any
expense, judgment, fine, amount paid
II-1
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 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 Law, a corporation generally has
the power to indemnify its present and former directors, officers, employees and
agents against expenses incurred by them in connection with any suit to which
they are, or are threatened to be made, a party by reason of their serving in
such positions so long as they acted in good faith and in a manner they
reasonably believed to be in, or not opposed to, the best interests of a
corporation, and with respect to any criminal action, they had no reasonable
cause to believe their conduct was unlawful.
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's board of directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act.
Article III of the Company's Bylaws provides that the Company, by action of
the Board of Directors, may, to the fullest extent permitted by the General
Corporation Law of Delaware, indemnify any and all persons who it shall have
power to indemnify against any and all of the expenses, liabilities or other
matters.
The Company has purchased and maintains an insurance policy covering the
officers and directors of the Company with respect to certain liabilities
arising under the Securities Act or otherwise.
ITEM 16. EXHIBITS
(a) Exhibits.
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------ -----------------------
5.1 Opinion of Jackson Tufts Cole & Black LLP.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Jackson Tufts Cole & Black, LLP.
Reference is made to Exhibit 5.1.*
- ----------------
Previously filed
II-2
23.3 Consent of Barna, Kowall & Company.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Company pursuant
to provisions described in Item 15, or otherwise, the Company has been advised
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Act, each
filing of the Company's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) That, for purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Company pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Act shall be deemed to be part of this Registration Statement as of
the time it was declared effective.
(6) To deliver or cause to be delivered with the Prospectus, to each
person to whom the Prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the Prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Exchange Act; and, where interim financial information required to be
presented by Article 3 of Regulation S-X are not set forth in the Prospectus, to
deliver, or cause to be delivered to each person to whom the Prospectus is sent
or given, the latest quarterly report
II-3
that is specifically incorporated by
reference in the Prospectus to provide such interim financial information.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Portland, State of
Oregon, on the 27th day of August, 1996.
OXIS INTERNATIONAL, INC.
By: /s/ Anna D. Barker
----------------------------
Anna D. Barker, Ph.D.
President and Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Anna D. Barker
--------------------- Director; President and Chief August 27, 1996
Anna D. Barker Executive Officer
(Principal Executive Officer)
/s/ Jon S. Pitcher*
--------------------- Chief Financial Officer August 27, 1996
Jon S. Pitcher and Secretary
(Principal Financial and
Accounting Officer)
/s/ Ray R. Rogers*
--------------------- Director; Chairman of the Board August 27, 1996
Ray R. Rogers
/s/ Gerald D. Mayer*
---------------------- Director August 27, 1996
Gerald D. Mayer
/s/ James McCamant*
--------------------- Director August 27, 1996
James McCamant
/s/ Stuart Lang*
--------------------- Director August 27, 1996
Stuart Lang
/s/ David Needham*
--------------------- Director August 27, 1996
David Needham
II-5
/s/ A.R. Sitaraman*
---------------------- Director August 27, 1996
A.R. Sitaraman
/s/ Timothy G. Biro*
----------------------- Director August 27, 1996
Timothy G. Biro
* Anna D. Barker, by signing her name hereto, does sign this Amendment
No. 3 to Registration Statement on behalf of each of the persons
indicated above pursuant to the powers of attorney duly executed by such
persons and filed with the Securities and Exchange Commission.
/s/ Anna D. Barker
-------------------
Anna D. Barker
Attorney-in-Fact
II-6
INDEX TO EXHIBITS
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
------ ----------- ----------
5.1 Opinion of Jackson Tufts Cole & Black, LLP *
23.1 Consent of Deloitte & Touche LLP 40
23.2 Consent of Jackson Tufts Cole & Black, LLP.
Reference is made to Exhibit 5.1 *
23.3 Consent of Barna, Kowall & Company 41
- --------------------------------------------------------------------------------
* Previously filed.