SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q X Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange - --- Act of 1934 for the quarterly period ended June 30, 2000. or ___ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ___ to _______. Commission File Number O-8092 OXIS INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Delaware 94-1620407 - --------------------------------------- ------------------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6040 N. Cutter Circle, Suite 317, Portland, Oregon 97217 - ----------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (503) 283-3911 ---------------------------------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ___ --- At June 30, 2000, the issuer had outstanding the indicated number of shares of common stock: 9,370,677 PART I. FINANCIAL INFORMATION Item 1. Financial Statements.
Consolidated Statements of Operations (Unaudited) Three Months Ended Six Months Ended June 30 June 30 ------------------------- ------------------------- 2000 1999 2000 1999 Revenues $ 779,000 $ 2,701,000 $ 1,722,000 $ 4,157,000 Costs and expenses: Cost of product sales 833,000 1,406,000 1,685,000 2,413,000 Cost of technology sold -- 1,279,000 -- 1,279,000 Research and development 447,000 952,000 785,000 1,722,000 Selling, general and administrative 642,000 830,000 1,364,000 1,688,000 ----------- ----------- ----------- ----------- Total costs and expenses 1,922,000 4,467,000 3,834,000 7,102,000 ----------- ----------- ----------- ----------- Operating loss (1,143,000) (1,766,000) (2,112,000) (2,945,000) Interest income 65,000 7,000 87,000 25,000 Interest expense (23,000) (23,000) (44,000) (53,000) ----------- ----------- ----------- ----------- Net loss (1,101,000) (1,782,000) (2,069,000) (2,973,000) Other comprehensive income (loss) - foreign currency translation adjustments 6,000 (43,000) (20,000) (31,000) ----------- ----------- ----------- ----------- Comprehensive loss $(1,095,000) $(1,825,000) $(2,089,000) $(3,004,000) =========== =========== =========== =========== Net loss per share - basic and diluted $ (.12) $ (.23) $ (.24) $ (.38) =========== =========== =========== =========== Weighted average number of shares used in computation - basic and diluted 9,324,735 7,871,196 8,794,943 7,858,631 =========== =========== =========== ===========
2 CONSOLIDATED BALANCE SHEETS (Unaudited) June 30, December 31, 2000 1999 ASSETS Current assets: Cash and cash equivalents $4,564,000 $ 789,000 Accounts receivable 665,000 1,072,000 Inventories 1,245,000 1,327,000 Prepaid and other 81,000 37,000 ---------- ---------- Total current assets 6,555,000 3,225,000 Furniture and equipment, net 689,000 808,000 Technology for developed products 773,000 864,000 Other assets 321,000 287,000 ---------- ---------- Total assets $8,338,000 $5,184,000 ========== ========== 3 CONSOLIDATED BALANCE SHEETS (Unaudited)
June 30, December 31, 2000 1999 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Notes payable $ 446,000 $ 681,000 Accounts payable 479,000 1,131,000 Accrued payroll, payroll taxes and other 482,000 395,000 Current portion of long-term debt 95,000 94,000 ------------ ------------ Total current liabilities 1,502,000 2,301,000 Long-term debt due after one year 168,000 194,000 Shareholders' equity: Preferred stock - $.01 par value; 15,000,000 shares authorized: Series B - 428,389 shares issued and outstanding at June 30, 2000 (liquidation preference of $1,000,000) 4,000 4,000 Series C - 608,536 shares issued and outstanding at June 30, 2000 6,000 6,000 Common stock - $.001 par value; 95,000,000 shares authorized; 9,370,677 shares issued and outstanding at June 30, 2000 (7,928,784 at December 31, 1999) 9,000 8,000 Additional paid in capital 58,823,000 52,756,000 Accumulated deficit (51,819,000) (49,750,000) Accumulated other comprehensive loss - foreign currency translation adjustment (355,000) (335,000) ------------ ------------ Total shareholders' equity 6,668,000 2,689,000 ------------ ------------ Total liabilities and shareholders' equity $ 8,338,000 $ 5,184,000 ============ ============
4 CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended June 30, ------------------------- 2000 1999 Cash flows from operating activities: Net loss $(2,069,000) $(2,973,000) Adjustments to reconcile net loss to cash used for operating activities: Depreciation and amortization 276,000 550,000 Gain on sale of land and building -- (16,000) Loss on sale of technology -- 368,000 Cash proceeds from sale of technology -- 342,000 Changes in assets and liabilities: Accounts receivable 405,000 80,000 Inventories 82,000 124,000 Other current assets (45,000) 163,000 Accounts payable (651,000) (111,000) Customer deposits -- (120,000) Accrued payroll, payroll taxes and other 119,000 (127,000) ----------- ----------- Net cash used for operating activities (1,883,000) (1,720,000) Cash flows from investing activities: Proceeds from sale of land and building -- 1,959,000 Purchases of equipment (55,000) (142,000) Additions to other assets (65,000) (59,000) Other, net 5,000 (4,000) ----------- ----------- Net cash provided by (used for) investing activities (115,000) 1,754,000 Cash flows from financing activities: Proceeds from issuance of stock, net of related costs 5,868,000 -- Repayment of short-term borrowings (75,000) -- Repayment of long-term debt (26,000) (1,517,000) ----------- ----------- Net cash provided by (used for) financing activities 5,767,000 (1,517,000) Effect of exchange rate changes on cash 6,000 17,000 ----------- ----------- Net increase (decrease) in cash and cash equivalents 3,775,000 (1,466,000) Cash and cash equivalents - beginning of period 789,000 2,575,000 ----------- ----------- Cash and cash equivalents - end of period $ 4,564,000 $ 1,109,000 =========== =========== Non-cash transactions: Issuance of common stock in exchange for cancellation of notes and accrued interest $ 202,000 $ -- Note received as part of proceeds from sale of technology -- 569,000
5 CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. FINANCIAL STATEMENTS AND CONDENSED NOTES The unaudited consolidated financial statements, which have been prepared in accordance with the instructions to Form 10-Q, do not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. All adjustments considered necessary by management for a fair presentation have been included. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. An annual report (Form 10-K) has been filed with the Securities and Exchange Commission ("Commission") for the year ended December 31, 1999. That report contains, among other information, a description of the Company's business, audited financial statements, notes to the financial statements, the report of the independent auditors and management's discussion and analysis of results of operations and financial condition. Readers of this report are presumed to be familiar with that annual report. 2. INVENTORIES Inventories are stated at the lower of cost or market. Cost has been determined by using the first-in, first-out method. Inventories at June 30, 2000 and December 31, 1999, consisted of the following: June 30, December 31, 2000 1999 Raw materials $ 682,000 $ 492,000 Work in process 364,000 438,000 Finished goods 199,000 397,000 ---------- ---------- Total $1,245,000 $1,327,000 ========== ========== 3. SHAREHOLDERS' EQUITY In April 2000 the Company completed a private placement of units, consisting of one share of the Company's common stock plus warrants to purchase two shares of the Company's common stock (the "Units"), primarily to a series of institutional investors. The Units were priced at the Nasdaq closing price for the Company's common stock the day prior to the signing of the subscription agreements relating to the purchase of such Units. The price per Unit ranged from $3.94 to $4.75. A total of 1,376,950 common shares and warrants to purchase 2,753,000 common shares were issued in exchange for gross proceeds of $6,050,000 in cash and conversion of $202,000 of short-term notes and accrued interest payable. The exercise price of one-half of the warrants issued in the private placement is 6 equal to 125% of the price paid per Unit. The exercise price of the other half of the warrants is equal to 150% of the price paid per Unit. The Company has agreed to issue additional warrants to its placement agents giving the agents the right to acquire 155,000 common shares at an exercise price of $5.94 per share. The Company has filed a preliminary registration statement with the Commission registering the common shares, and the common shares issuable upon exercise of the warrants, issued in the private placement. 4. STOCK OPTIONS The Company has a stock incentive plan under which 1,365,000 shares of the Company's common stock are reserved for issuance (the "Plan"). The Plan permits the Company to grant stock options to acquire shares of the Company's common stock, award stock bonuses of the Company's common stock, and grant stock appreciation rights. During the six months ended June 30, 2000, options to purchase 225,000 shares at an exercise price of $1.9125 have been issued under the Plan. Options to purchase an additional 400,000 common shares at an exercise price of $1.9125 have also been issued, subject to shareholder approval of an amendment to the Plan. The Company's board of directors has also approved an additional option grant to purchase 400,000 common shares at an exercise price of $1.5625. This option grant is not issued pursuant to the Plan. 5. OPERATING SEGMENTS The following table presents information about the Company's two operating segments: Health Therapeutic Products Development Total ----------- ------------ ------------ Quarter ended June 30, 2000: Revenues from external customers $ 779,000 $ -- $ 779,000 Intersegment revenues -- -- -- Net loss (736,000) (365,000) (1,101,000) As of June 30, 2000 - Total assets 2,970,000 5,368,000 8,338,000 7 Health Therapeutic Products Development Total ------------ ------------ ------------ Quarter ended June 30, 1999: Revenues from external customers $ 2,655,000 $ 46,000 $ 2,701,000 Intersegment revenues -- 279,000 279,000 Net loss (834,000) (948,000) (1,782,000) As of June 30, 1999 - Total assets 5,067,000 1,220,000 6,287,000 Six months ended June 30, 2000: Revenues from external customers $ 1,722,000 $ -- $ 1,722,000 Intersegment revenues -- -- -- Net loss (1,365,000) (704,000) (2,069,000) Six months ended June 30, 1999: Revenues from external customers $ 4,083,000 $ 74,000 $ 4,157,000 Intersegment revenues -- 303,000 303,000 Net loss (1,243,000) (1,730,000) (2,973,000) 6. SUBSEQUENT EVENT At a meeting held August 1, 2000, the Company's board of directors decided to develop additional information as to the value of the Company's Health Products segment, for the purpose of reaching a final decision on whether to continue operations or develop a formal plan for disposal of this business segment. To this end, the board has received a nonexclusive offer from two employees to purchase the Health Products assets. As a result, a special committee of the board has been charged with the responsibility of completing a full due diligence investigation of this offer, as well as other avenues of sale and reporting back to the full board with its recommendation. At the present time, the specter of a sale as well as specific terms are not defined sufficiently to quantify the financial results of any agreed upon disposition or whether continuing operations is a preferable alternative. The Company believes that it is reasonable for the special committee to complete its work and to issue its recommendation during the balance of calendar 2000, at which time it is expected to be clearer as to whether a sale of this business segment is appropriate. 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. CERTAIN STATEMENTS SET FORTH BELOW CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. STATEMENTS THAT EXPRESSLY OR BY IMPLICATION PREDICT FUTURE RESULTS, PERFORMANCE OR EVENTS ARE FORWARD-LOOKING. THE WORDS "BELIEVES," "PLANS," "EXPECTS," "ANTICIPATES," "ESTIMATES," AND SIMILAR EXPRESSIONS ALSO IDENTIFY FORWARD- LOOKING STATEMENTS. THE FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY OR INDUSTRY RESULTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THE FORWARD-LOOKING STATEMENTS. WITH RESPECT TO THE COMPANY, THESE FACTORS INCLUDE UNCERTAINTY OF ADDITIONAL FUNDING; LOSS OR IMPAIRMENT OF SOURCES OF CAPITAL; DEPENDENCE ON STRATEGIC PARTNERS; UNCERTAINTIES RELATING TO PATENTS AND PROPRIETARY INFORMATION; DEPENDENCE ON KEY PERSONNEL; TECHNOLOGICAL CHANGE AND COMPETITION AND CHANGES IN LAWS OR REGULATIONS. GIVEN THESE UNCERTAINTIES READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THE FORWARD-LOOKING STATEMENTS. THE COMPANY DOES NOT INTEND TO UPDATE ANY FORWARD-LOOKING STATEMENTS. FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES The Company's working capital increased during the first half of 2000 by $4,129,000, from $924,000 at December 31, 1999 to $5,053,000 at June 30, 2000. The increase in working capital resulted primarily from the net proceeds from issuance of common stock of $5,868,000, offset in part by the effect of the net loss for the period ($2,069,000 less non-cash charges of $276,000). Cash and cash equivalents increased from $789,000 at December 31, 1999 to $4,564,000 at June 30, 2000. While the Company believes that its new therapeutic products and technologies show considerable promise, its ability to realize significant revenues therefrom is dependent upon the Company's success in developing business alliances with biotechnology and/or pharmaceutical companies that have the required resources to develop and market certain of these products. There is no assurance that the Company's effort to develop such business alliances will be successful. The Company expects to continue to report losses in 2000 as the level of expenses is expected to continue to exceed revenues. The Company can give no assurances as to when and if its revenues will exceed its expenses. 9 RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 2000 COMPARED WITH THREE MONTHS ENDED JUNE 30, 1999 Possible Divestiture of Assets At a meeting held August 1, 2000, the Company's board of directors decided to develop additional information as to the value of the Company's Health Products segment, for the purpose of reaching a final decision on whether to continue operations or develop a formal plan for disposal of this business segment. To this end, the board has received a nonexclusive offer from two employees to purchase the Health Products assets. As a result, a special committee of the board has been charged with the responsibility of completing a full due diligence investigation of this offer, as well as other avenues of sale and reporting back to the full board with its recommendation. At the present time, the specter of a sale as well as specific terms are not defined sufficiently to quantify the financial results of any agreed upon disposition or whether continuing operations is a preferable alternative. The Company believes that it is reasonable for the special committee to complete its work and to issue its recommendation during the balance of calendar 2000, at which time it is expected to be clearer as to whether a sale of this business segment is appropriate. Although a formal plan for this possible divestiture has not been put in place, it is anticipated that all of the assets that are currently generating revenues for the Company may either be sold to a third party or spun off to the Company's shareholders. Upon completion of such a restructuring, the Company would no longer have a source of current revenues and the Company's continued operations would be wholly dependent upon additional capital financing until such time as revenues can be generated from its therapeutic development programs. Revenues The Company's revenues for the quarters ended June 30, 2000 and 1999 were as follows: 2000 1999 Research assays and fine chemicals $ 293,000 $ 330,000 Therapeutic drug monitoring assays 174,000 599,000 Instruments 292,000 308,000 Bovine superoxide dismutase (bSOD) for research and human use -- 456,000 Sale of rights to therapeutic drug monitoring assays -- 911,000 Other 20,000 97,000 ---------- ---------- $ 779,000 $2,701,000 ========== ========== Sales of research assays and fine chemicals declined by $37,000 from $330,000 in the second quarter of 1999 to $293,000 in the second quarter of 2000 due to a decline in sales volumes. 10 Revenues from sales of therapeutic drug monitoring assays declined in the second quarter of 2000 as compared to the second quarter of 1999 resulting in a decrease in sales of $425,000. Effective June 28, 1999, the Company sold the intellectual property, contract rights and finished goods inventory relating to its therapeutic drug monitoring assays. Sales of therapeutic drug monitoring assays for the second quarter of 1999 include $158,000 for the sale of the therapeutic drug monitoring finished goods inventory. Therapeutic drug monitoring assay revenues in the second quarter of 2000 represent contract sales of assays and services to the purchaser of the rights to this technology. Such revenues are expected to continue to be less than the level prior to July 1999. Revenues from therapeutic drug monitoring assay sales and related services may terminate at the end of the third quarter of 2000, when the contract to manufacture product for the purchaser of the technology expires. Revenue from instrument sales and development declined by $16,000, from $308,000 in the second quarter of 1999 to $292,000 in the second quarter of 2000. This decrease resulted from reduced orders from customers. Since early 1999, the Company has not invested in any significant marketing efforts to replace lost instrument customers. Sales of bSOD in the second quarter of 1999 were primarily the result of one shipment of bulk bSOD which has not been repeated in 2000. Costs and Expenses Cost of sales was 99% of revenues for the second quarter 1999 and increased to 107% of revenues for the second quarter of 2000. Revenues for the second quarter of 1999 include $911,000 for the sale of rights to the Company's therapeutic drug monitoring assays, and expenses include $1,279,000 for the cost of that technology. Excluding the sale of the therapeutic drug monitoring technology and related cost, cost of sales for the second quarter of 1999 was approximately 79% of revenues. The increase in the cost of sales as a percentage of sales in the second quarter of 2000 is due primarily to the effect of the fixed manufacturing costs for the Company's products being spread over a lower manufacturing and sales volume. Cost of product sales declined from $1,406,000 in the second quarter of 1999 to $833,000 in the second quarter of 2000, but this decrease was not in proportion to the decrease in sales volumes. Research and development expenses decreased from $952,000 in the second quarter of 1999 to $447,000 in the second quarter of 2000. The decrease in research and development expenses resulted primarily from the closure of the Company's French research laboratory in the second quarter of 1999. Selling, general and administrative expenses decreased from $830,000 in the second quarter of 1999 to $642,000 in the second quarter of 2000. A reduction in personnel costs contributed approximately $128,000 to this decrease. 11 Interest Income Interest income for the second quarter of 2000 was more than for the second quarter of 1999 because the Company had more cash available for investment during 2000. Net Loss The Company continued to experience losses in the second quarter of 2000. The second quarter 2000 net loss of $1,101,000 ($.12 per share-basic and diluted) was $681,000 less than the $1,782,000 ($.23 per share-basic and diluted) net loss for the second quarter of 1999. The decrease in the net loss is primarily due to the decreases in research and development and selling, general and administrative costs. The Company expects to incur a substantial net loss for 2000. If the Company develops substantial new revenue sources or if substantial additional capital is raised through further sales of securities, the Company plans to continue to invest in research and development activities and incur sales, general and administrative expenses in amounts greater than its anticipated near-term product margins. If the Company is unable to raise sufficient additional capital or to develop new revenue sources, it will have to cease, or severely curtail, its operations. In this event, while expenses will be reduced, expense levels, and the potential write down of various assets, would still be in amounts greater than anticipated revenues. The Company expects that additional capital will be required in 2001. 12 RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 2000 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1999 Revenues The Company's revenues for the six-month periods ended June 30, 2000 and 1999 were as follows: 2000 1999 Sales Research assays and fine chemicals $ 609,000 $ 736,000 Therapeutic drug monitoring assays 464,000 1,083,000 Instruments 625,000 795,000 Bovine superoxide dismutase (bSOD) for research and human use -- 460,000 Sale of rights to therapeutic drug monitoring assays -- 911,000 Other 24,000 172,000 ---------- ---------- $1,722,000 $4,157,000 ========== ========== Sales of research assays and fine chemicals declined by $127,000, from $736,000 in the first half of 1999 to $609,000 in the first half of 2000. This decrease was due primarily to the sale of certain products that became surplus when the Company's French laboratory was closed in early 1999. Effective June 28, 1999, the Company sold the intellectual property, contract rights and finished goods inventory relating to its therapeutic drug monitoring assays. The Company recognized $911,000 as compensation for the intellectual property and contract rights. Sales of the Company's therapeutic drug monitoring assays decreased by $619,000, from $1,083,000 in the first six months of 1999 to $464,000 in the first six months of 2000. Sales of therapeutic drug monitoring assays for the six months ended June 30, 1999 include $158,000 for the sale of the therapeutic drug monitoring finished goods inventory. Therapeutic drug monitoring assay revenues in the first six months of 2000 represent contract sales of assays and services to the purchaser of the rights to this technology. Such revenues are expected to continue to be less than the level prior to July 1999. Revenues from therapeutic drug monitoring assay sales and related services may terminate at the end of the third quarter of 2000, when the contract to manufacture product for the purchaser of the technology expires. 13 Revenue from instrument sales and development declined by $170,000, from $795,000 in the first half of 1999 to $625,000 in the first half of 2000. This decrease resulted from reduced orders from customers. Since early 1999, the Company has not invested in any significant marketing efforts to replace lost instrument customers. Sales of bSOD in the first half of 1999 were primarily the result of one shipment of bulk bSOD to the Company's Spanish licensee. No significant sales of bulk bSOD were made during 2000. Other revenues in the first half of 1999 included a $50,000 royalty payment that did not recur in the first half of 2000. Costs and Expenses Cost of sales was 89% of revenues for the first half of 1999 and increased to 98% of product sales for the first half of 2000. Revenues for 1999 include $911,000 for the sale of rights to the Company's therapeutic drug monitoring assays, and expenses include $1,279,000 for the cost of that technology. Excluding the sale of the therapeutic drug monitoring technology and related cost, cost of sales for the first half of 1999 was approximately 74% of revenues. The increase in the cost of sales as a percentage of sales in 2000 is due primarily to the effect of the fixed manufacturing costs for the Company's products being spread over a lower manufacturing and sales volume. Excluding the technology sale, sales volume for the first half of 2000 was approximately 47% less than that of the first half of 1999. Cost of product sales declined from $2,413,000 in the first half of 1999 to $1,685,000 in the first half of 2000, but this decrease was not in proportion to the decrease in sales volumes. Research and development expenses decreased from $1,722,000 in the first half of 1999 to $785,000 in the first half of 2000. The decrease in research and development expenses resulted primarily from costs in the first half of 1999 relating to the closure of the Company's French research facility and termination of its employees. Selling, general and administrative expenses decreased by $324,000, from $1,688,000 in the first half of 1999 to $1,364,000 in the first half of 2000. Personnel reductions accounted for approximately $145,000 of the decrease. Reduced advertising expense contributed an additional $42,000 to the reduction. Interest Income Interest income for the first half of 2000 was more than for the first half of 1999 because the Company had more cash available for investment during 2000. 14 Net Loss The Company continued to experience losses in the first six months of 2000. The first half 2000 net loss of $2,069,000 ($.24 per share-basic and diluted) was $904,000 less than the $2,973,000 ($.38 per share-basic and diluted) net loss for the first half of 1999. The decrease in the net loss is primarily due to reductions in research and development and selling, general and administrative expenses, partially offset by reduced margins on product sales. PART II. OTHER INFORMATION Item 2. Changes in Securities and Use of Proceeds. In March 2000 the Company issued 1,010,868 shares of its common stock and warrants to purchase 2,021,736 shares of its common stock to eight accredited investors. Gross proceeds from the sale of these securities were $4,802,000, including $4,600,000 in cash and $202,000 in exchange for a note and accrued interest. The securities were sold in a private placement pursuant to Regulation D of the rules of the Securities and Exchange Commission. In April 2000 the Company completed the second and final closing of its private placement pursuant to Regulation D by issuing an additional 366,081 shares of its common stock and warrants to purchase 732,162 shares of its common stock to three accredited investors, two of which also acquired shares and warrants in the March closing. Gross proceeds from the April closing were $1,450,000. In total, warrants to purchase 2,753,898 shares of common stock were issued to investors in the private placement. The number of shares subject to the warrants by exercise price is as follows: Exercise Shares subject Price to warrants ----- ----------- $7.13 1,021,394 $5.94 1,021,394 $5.91 355,555 $4.92 355,555 The $5.94 and $4.92 warrants expire one year from issuance. The $7.13 and $5.91 warrants expire two years from issuance. In connection with this sale of securities the Company has paid or will pay to its placement agents $219,000 in cash commissions together with warrants to purchase 155,000 shares of the Company's common stock at an exercise price of $5.94 per share. Item 6. Exhibits and Reports on Form 8-K. 15 (a) Exhibits - See Exhibit Index on page 16. (b) Reports on Form 8-K On April 12, 2000, the Company filed a report on Form 8-K demonstrating compliance with a minimum net tangible asset requirement that had been required by a Nasdaq Listing Qualifications Panel. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. OXIS International, Inc. August 10, 2000 By /s/ Paul C. Sharpe ------------------------------ Paul C. Sharpe Chief Executive Officer August 10, 2000 By /s/ Jon S. Pitcher ------------------------------ Jon S. Pitcher Chief Financial Officer 16 EXHIBIT INDEX Exhibit Page Number Description of Document Number 10(a) Executive Employment Agreement dated April 3, 2000, between the Company and Jon S. Pitcher 10(b) Executive Employment Agreement dated April 3, 2000, between the Company and Humberto V. Reyes 27(a) Financial data schedule