Title of each Class of Securities to be Registered | Proposed Maximum Aggregate Offering Price(1) | Amount of Registration Fee | |||
Class A Units consisting of: | $12,000,000 | $1,208.40 | |||
(i) Common stock, par value $0.001 per share(2) | |||||
(ii) Warrants to purchase common stock | |||||
Exercise price of Class A Unit Warrants (2) | $12,000,000 | $1,208.40 | |||
Class B Units consisting of: | $12,000,000 | $1,208.40 | |||
(i) Series J Convertible Preferred Stock, par value $0.001 per share | |||||
(ii) Warrants to purchase common stock | |||||
Common stock issuable upon conversion of Series J Convertible Preferred Stock (2) | |||||
Exercise price of Class B Unit Warrants (2) | $12,000,000 | $1,208.40 | |||
Exercise price of Placement Agent Warrants (2) | $1,920,000 | $193.35 | |||
Total | $49,920,000 | $5,026.95(3) | |||
(1) | Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended. | ||||
(2) | Pursuant to Rule 416 under the Securities Act, the securities being registered hereunder include such indeterminate number of additional shares of common stock as may be issued after the date hereof as a result of stock splits, stock dividends or similar transactions. | ||||
(3) | Calculated in accordance with Rule 457(o) and Rule 457(g) of the Securities Act at the statutory rate of $100.70 per $1,000,000 of securities registered. |
Per Share | Per Class A Unit (one share of common stock and a Series A warrant for one share of common stock) | Per Class B Unit (one shae of Series J Preferred and a Series A warrant for ten shares of common stock) | Total | |
Public offering price | $ | $ | $ | $ |
Placement agent's fees(1) | $ | $ | $ | $ |
Proceeds, before expenses, to Oxis International, Inc. | $ | $ | $ | $ |
(1) | We have agreed to reimburse the placement agent for certain of its expenses and to issue common stock purchase warrants to the placement agent. See "Plan of Distribution" on page 20 of this prospectus for a description of the compensation payable to the placement agent. |
Page | ||
PROSPECTUS SUMMARY | 5 | |
RISK FACTORS | 8 | |
USE OF PROCEEDS | 12 | |
MARKET FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS | 12 | |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 13 | |
BUSINESS | 19 | |
MANAGEMENT | 23 | |
EXECUTIVE COMPENSATION | 25 | |
VOTING SECURITIES AND PRINCIPAL HOLDERS | 26 | |
PLAN OF DISTRIBUTION | 29 | |
DESCRIPTION OF CAPITAL STOCK | 31 | |
LEGAL MATTERS | 31 | |
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES | 31 | |
EXPERTS | 32 | |
WHERE YOU CAN FIND MORE INFORMATION | 32 | |
INDEX TO FINANCIAL STATEMENTS | 33 |
Class A Units offered by us | We are offering up to 60,000,000 Class A Units. Each Class A Unit will consist of one share of our common stock and a Series A warrant to purchase one share of our common stock at an exercise price equal to the public offering price of the Class A Units, ("Series A warrant"). The Class A Units will not be certificated and the share of common stock and warrants part of such unit are immediately separable and will be issued separately in this offering. This prospectus also relates to the offering of shares of our common stock issuable upon the exercise of the Series A warrants part of the Class A Units. Assuming we sell all 60,000,000 Class A Units (and no Class B Units) being offered in this offering and a public offering price of $0.20, the reported closing price of our common stock on August 18, 2016, we would issue in this offering an aggregate of 60,000,000 shares of our common stock and Series A warrants to purchase 60,000,000 shares of our common stock. | |
Class B Units offered by us | We are also offering to those purchasers, if any, whose purchase of Class A Units in this offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% of our outstanding common stock immediately following the consummation of this offering, the opportunity, in lieu of purchasing Class A Units, to purchase Class B Units. Each Class B Unit will consist of one share of our Series J Convertible Preferred Stock, or the Series J Preferred, convertible into ten shares of our common stock at the public offering price of the Class A Units times ten, together with the equivalent number of Series A warrants as would have been issued to such purchaser if they had purchased Class A Units based on the public offering price. The Series J Preferred do not generally have any voting rights but are convertible into shares of common stock. The Class B Units will not be certificated and the share of Series J Preferred and warrants part of such unit are immediately separable and will be issued separately in this offering. This prospectus also relates to the offering of shares of our common stock issuable upon conversion of the Series J Preferred Stock and upon exercise of the Series A warrants part of the Class B Units. | |
Series A Warrants | Each Series A warrant included in the Units will have an exercise price equal to the public offering price of the Class A Units, will be exercisable upon issuance, and will expire five years from the date of issuance. | |
Common stock outstanding before this offering | 30,241,305 shares | |
Common stock outstanding after this offering | shares(1) | |
Use of proceeds | We intend to use the net proceeds from this offering for general corporate purposes and working capital. | |
Risk factors | You should read the "Risk Factors" beginning on page 7 of this Prospectus for a discussion of factors to consider before deciding to purchase the securities we are offering. | |
OTC Markets symbol for our common stock | OXIS |
(1) | Assumes only Class A Units are sold in this offering. To the extent we sell any Class B Units, the same aggregate number of common stock equivalents resulting from this offering would be convertible under the Series J Preferred issued as part of the Class B Units. |
Balance Sheet Summary | September 30, 2016 (Unaudited) | December 31, 2015 (Audited) | |
Cash | $ 154,000 | $ 47,000 | |
Prepaid expenses | 2,000 | 2,000 | |
Property and equipment, net | 4,000 | 5,000 | |
Total assets | 160,000 | 54,000 | |
Total liabilities | 17,366,000 | 61,888,000 | |
Total Stockholders' Deficit | (17,206,000) | (61,834,000) | |
Statement of Operations Summary | Nine Months Ended September 30, 2016 (Unaudited) | Nine Months Ended September 30, 2015 (Unaudited) | |
Revenues | $ - | 27,000 | |
Gross profit | - | - | |
Research and development | 725,000 | 475,000 | |
General and administrative expenses | 7,827,000 | 5,571,000 | |
Other income/(loss) | 32,414,000 | 10,671,000 | |
Net income/(loss) | 23,862,000 | 4,652,000 |
Pat./Pub. No. | Title | Country | Status |
U.S. Patent Application USSN 62/237,835 | Therapeutic compounds and its uses | US | Pending |
Pat./Pub. No. | Title | Country | Status |
U.S. Patent Application USSN 13/256,812 | Methods and compositions for bi-specific targeting of cd19/cd22 | US | Issued |
(i) | filing of an investigational new drug application with a competent regulatory authority anywhere in the world -- $50,000; |
Pat./Pub. No. | Title | Country | Status |
U.S. Patent Application USSN 14/237,494 | P62-zz chemical inhibitor | US | Pending |
China Patent Application CN201280048718 | P62-zz chemical inhibitor | China | Pending |
YEAR | PERIOD | HIGH | LOW |
Fiscal Year 2014 | First Quarter | 2.50 | 0.75 |
Second Quarter | 0.80 | 3.25 | |
Third Quarter | 6.25 | 1.25 | |
Fourth Quarter | 7.50 | 2.50 | |
Fiscal Year 2015 | First Quarter | 13.50 | 5.13 |
Second Quarter | 11.78 | 5.03 | |
Third Quarter | 6.23 | 3.50 | |
Fourth Quarter | 5.23 | 2.93 | |
Fiscal Year 2016 | First Quarter | 3.20 | 0.41 |
Second Quarter | 0.60 | 0.31 |
Our common stock is also quoted on several European based exchanges including Berlin (OXI.BE), Frankfurt (OXI.DE), the Euronext (OXI.NX) and Paris, (OXI.PA). The foregoing trading prices exclude trading on these foreign stock markets.
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) | |||
Equity compensation plans approved by security holders (1) | 374,781 | $4.78 | 133,445 | |||
Equity compensation plans not approved by security holders | - | - | - | |||
Total | 374,781 | $4.78 | 133,445 |
(1) | As of September 30, 2016, we had options issued and outstanding to purchase 967 shares of common stock under our 2003 Stock Incentive Plan, -0- shares of our common stock under the 2010 Plan and 373,833 shares of common stock under our 2014 Stock Incentive Plan. |
Name | Age | Position | ||
Anthony J. Cataldo | 65 | Chief Executive Officer and Chairman of the Board | ||
Steven Weldon | 40 | Chief Financial Officer and Director |
1) | the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; |
2) | convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); |
3) | subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or |
4) | found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law. |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards | Option Awards(1) ($) | Non-Equity Incentive Plan Compensation Earnings ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total | |||||||||
Anthony J. Cataldo, | 2015 | $216,000 | $134,000 | $ ---- | $ 102,535 | $ ––– | $ ––– | $ ––– | $ 452,535 | |||||||||
Chairman(2) | 2014 | $154,000 | $ ––– | $ 402,291 | $ 139,079 | $ ––– | $ ––– | $ ––– | $ 695,370 | |||||||||
Kenneth Eaton, | 2015 | $ ––– | $ ––– | $ ––– | $ ––– | $ ––– | $ ––– | $ ––– | $ ––– | |||||||||
Chief Executive Officer (Principal Executive Officer) (3) | 2014 | $ 224,560 | $ ––– | $ ––– | $ ––– | $ ––– | $ ––– | $ ––– | $ 224,560 | |||||||||
Steven Weldon, | 2015 | $168,000 | $ ––– | $ 197,845 | $ ––– | $ ––– | $ ––– | $ ––– | $365,845 | |||||||||
Chief Financial Officer (Principal Financial Officer) (4) | 2014 | $ 25,500 | $ ––– | $ 57,945 | $ ––– | $ ––– | $ ––– | $ ––– | $83,445 |
(1) | This column represents option awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures related to service-based vesting conditions. For additional information on the valuation assumptions with respect to the option grants, refer to Note 1 of our financial statements in this Annual Report. These amounts do not correspond to the actual value that will be recognized by the named executives from these awards. |
(2) | Mr. Cataldo served as our Chief Executive Officer from March 2009 to August 2011 and again in November 2014, and was appointed Chairman of the Board of Directors on July 25, 2014. |
(3) | Mr. Eaton was appointed Chief Executive Officer in November 2013 and resigned in November 2014. |
(4) | Mr. Weldon was appointed Chief Financial Officer on November 3, 2014. |
Option Awards | Stock Awards | ||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
Anthony Cataldo | 321,833 | - | - | $2.50 | 07/01/19 | ||||
Anthony Cataldo | 321,833 | - | - | $5.00 | 07/01/19 | ||||
Anthony Cataldo | 321,833 | 321,833 | - | $7.50 | 07/01/19 |
Name and Address of Beneficial Owner | Number of Shares of Common Stock Beneficially Owned | Percent of Shares of Outstanding Common Stock | |
Security Ownership of Certain Beneficial Owners: | |||
Bristol Investment Fund, Ltd. | 1,525,472 (1) | 5.44% | |
Theorem Group, LLC (2) | 2,096,480 (2) | 7.47% | |
Alpha Capital Anstalt | 2,034,830(3) | 7.25% | |
James W. Heavener | 1,684,100(4) | 6.00% | |
Security Ownership of Management: | |||
Anthony J. Cataldo | 4,030,731 | 15.22% | |
Steven Weldon | 601,610 | 2.27% | |
Executive officers and directors as a group — 2 persons | 4,632,341 | 17.49% |
(1) | As reported on SC 13G/A filed with the SEC on April 4, 2016. Paul Kessler, manager of Bristol Capital Advisors, LLC, the investment advisor to Bristol Investment Fund, Ltd., has voting and investment control over the securities held by Bristol Investment Fund, Ltd. Mr. Kessler disclaims beneficial ownership of these securities. |
(2) | As reported on SC 13D/A filed with the SEC on January 26, 2016. Anshuman Dube, manager of Theorem Group, LLC, has voting and investment control over the securities. Mr. Dube disclaims beneficial ownership of these securities. |
(3) | As reported on SC 13G filed with the SEC on January 26, 2016 Konrad Ackermann, director of Alpha Capital Anstalt, has voting and investment control over the securities. |
(4) | As reported on SC 13G filed with the SEC on February 9, 2016 James W. Heavener has voting and investment control over the securities. |
• | decreasing the market price of our common stock; |
• | restricting dividends on our common stock; |
• | diluting the voting power of our common stock; |
• | impairing the liquidation rights of our common stock; or |
• | delaying or preventing a change in control of us without further action by our stockholders. |
· | As previously disclosed, the holder of the Series H Preferred is entitled to vote with the common stock, and is entitled to a number of votes equal to (i) the number of shares of common stock it can convert into (without any restrictions or limitations on such conversion), (ii) multiplied by 100. | |
· | The holder of the Series H Preferred cannot convert such preferred stock into shares of common stock if the holder and its affiliates after such conversion would own more than 9.9% of the Company's then issued and outstanding shares of common stock. | |
· | The Series G Preferred contained a limitation that the holder of the Series G Preferred could not convert such preferred shares into more than 19.999% of the issued and outstanding shares of common stock without the approval of the stockholders if the rules of the principal market on which the common stock is traded would prohibit such a conversion. Since the rules of the Company's principal market did not require such a limitation, that provision has been deleted. |
• | senior to all of our common stock to the extent of its liquidation preference of $0.001 per share; |
• | senior to any class or series of our capital stock hereafter created specifically ranking by its terms junior to the Series J Preferred Stock to the extent of its liquidation preference of $0.001 per share; |
• | on parity to any class or series of our capital stock hereafter created specifically ranking by its terms on parity with the Series J Preferred Stock. |
Per Class A Unit | $ | |||
Per Class B Unit | $ | |||
Total | $ |
• | by operation of law or by reason of reorganization of our company; |
• | to any FINRA member firm participating in the offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction set forth above for the remainder of the time period; |
• | if the aggregate amount of securities of our company held by the holder of the compensation warrants or related persons do not exceed 1% of the securities being offered; |
• | that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided that no participating member manages or otherwise directs investments by the fund, and participating members in the aggregate do not own more than 10% of the equity in the fund; or |
• | the exercise or conversion of any security, if all securities received remain subject to the lock-up restriction set forth above for the remainder of the time period. |
September 30, 2016 | December 31, 2015 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 154,000 | $ | 47,000 | ||||
Prepaid expenses | 2,000 | 2,000 | ||||||
Total Current Assets | 156,000 | 49,000 | ||||||
Fixed assets, net | 4,000 | 5,000 | ||||||
Total Other Assets | 4,000 | 5,000 | ||||||
TOTAL ASSETS | $ | 160,000 | $ | 54,000 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
Current Liabilities: | ||||||||
Accounts payable | 1,814,000 | 893,000 | ||||||
Accrued interest | 3,480,000 | 2,391,000 | ||||||
Accrued expenses | 597,000 | 4,326,000 | ||||||
Line of credit | 31,000 | 31,000 | ||||||
Warrant liability | 184,000 | 44,531,000 | ||||||
Settlement note payable | 691,000 | 691,000 | ||||||
Demand notes payable | 452,000 | 452,000 | ||||||
Convertible debentures, current portion, net of discount of $1,596,000 and $900,000 | 8,678,000 | 6,820,000 | ||||||
Convertible debentures | 1,039,000 | 1,039,000 | ||||||
Total current liabilities | 16,966,000 | 61,174,000 | ||||||
Long term liabilities: | ||||||||
Convertible debt, net of discount of $470,000 and $2,536,000 | 400,000 | 714,000 | ||||||
Total long term liabilities | 400,000 | 714,000 | ||||||
Total liabilities | 17,366,000 | 61,888,000 | ||||||
Stockholders' Deficit: | ||||||||
Convertible preferred stock - $0.001 par value; 15,000,000 shares authorized: | ||||||||
Series C - 96,230 and 96,230 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 1,000 | 1,000 | ||||||
Series H – 25,000 and 25,000 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively | - | - | ||||||
Series I – 1,666,667 and 1,666,667 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 2,000 | 2,000 | ||||||
Common stock - $0.001 par value; 150,000,000 shares authorized; 28,218,365 and 2,400,000 shares issued and outstanding at September 30, 2016 and December 31, 2015 | 28,000 | 2,000 | ||||||
Additional paid-in capital | 104,752,000 | 84,012,000 | ||||||
Accumulated deficit | (121,820,000 | ) | (145,682,000 | ) | ||||
Noncontrolling interest | (169,000 | ) | (169,000 | ) | ||||
Total Stockholders' Deficit | (17,206,000 | ) | (61,834,000 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 160,000 | $ | 54,000 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Product revenues | $ | - | $ | - | $ | - | $ | - | ||||||||
License revenue | - | - | - | 27,000 | ||||||||||||
Total revenue | - | - | - | 27,000 | ||||||||||||
Cost of product revenue | - | - | - | - | ||||||||||||
Gross profit | - | - | - | 27,000 | ||||||||||||
Operating expenses | ||||||||||||||||
Research and development | 250,000 | 225,000 | 725,000 | 475,000 | ||||||||||||
Selling, general and administrative expenses | 2,280,000 | 2,552,000 | 7,827,000 | 5,571,000 | ||||||||||||
Total operating expenses | 2,530,000 | 2,777,000 | 8,552,000 | 6,046,000 | ||||||||||||
Loss from operations | (2,530,000 | ) | (2,777,000 | ) | (8,552,000 | ) | (6,019,000 | ) | ||||||||
Other income (expense) | ||||||||||||||||
Change in value of warrant and derivative liabilities | 436,000 | 2,809,000 | 37,195,000 | 20,683,000 | ||||||||||||
Interest expense | (1,536,000 | ) | (1,724,000 | ) | (4,781,000 | ) | (10,012,000 | ) | ||||||||
Total other income (expense) | 1,100,000 | 1,085,000 | 32,414,000 | 10,671,000 | ||||||||||||
Income before minority interest and provision for income taxes | (3,630,000 | ) | (1,692,000 | ) | 23,862,000 | 4,652,000 | ||||||||||
Plus: net (income) loss attributable to the noncontrolling interest | - | - | - | - | ||||||||||||
Income before provision for income taxes | (3,630,000 | ) | (1,692,000 | ) | 23,862,000 | 4,652,000 | ||||||||||
Provision for income tax | - | - | - | - | ||||||||||||
Net income | (3,630,000 | ) | (1,692,000 | ) | 23,862,000 | 4,652,000 | ||||||||||
Weighted average common shares outstanding – basis and diluted | ||||||||||||||||
Basic | 27,462,111 | 2,400,000 | 22,656,666 | 2,392,683 | ||||||||||||
Diluted | 27,462,111 | 2,400,000 | 22,656,666 | 4,764,753 | ||||||||||||
Net income per share | ||||||||||||||||
Basic | $ | 0.13 | $ | 0.71 | $ | 1.05 | $ | 1.94 | ||||||||
Diluted | $ | 0.13 | $ | 0.71 | $ | 1.05 | $ | 0.98 | ||||||||
Nine months Ended September 30, | ||||||||
2016 (unaudited) | 2015 (unaudited) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income/(loss) | $ | 23,862,000 | $ | 4,652,000 | ||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Depreciation | 1,000 | 1,000 | ||||||
Amortization of intangible assets | - | - | ||||||
Stock compensation expense for options and warrants issued to employees and non-employees | 5,812,000 | 1,820,000 | ||||||
Non-cash interest expense | 1,697,000 | 7,717,000 | ||||||
Amortization of debt discounts | 1,625,000 | 1,732,000 | ||||||
Change in value of warrant and derivative liabilities | (37,195,000 | ) | (20,683,000 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | - | - | ||||||
Other assets | - | 25,000 | ||||||
Accounts payable and accrued expenses | 2,403,000 | 1,023,000 | ||||||
Net cash used in operating activities | (1,795,000 | ) | (3,713,000 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Repayment of note payable | - | - | ||||||
Proceeds of notes payable | 1,902,000 | 2,900,000 | ||||||
Net cash provided by financing activities | 1,902,000 | 2,900,000 | ||||||
Minority interest | - | - | ||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | 107,000 | (813,000 | ) | |||||
CASH AND CASH EQUIVALENTS - Beginning of period | 47,000 | 855,000 | ||||||
CASH AND CASH EQUIVALENTS - End of period | $ | 154,000 | $ | 42,000 | ||||
Supplemental Disclosures | ||||||||
Interest paid | $ | - | $ | - | ||||
Income taxes paid | $ | - | $ | - | ||||
Supplemental non-cash activities: | ||||||||
Common stock issued upon conversion of convertible notes | $ | 1,794,000 | $ | - | ||||
Common stock issued upon conversion of accrued interest and penalty | $ | 346,000 | $ | 247,000 |
Description | Level 1 | Level 2 | Level 3 | |||||||||
Assets | ||||||||||||
$ | — | $ | — | $ | — | |||||||
Liabilities | ||||||||||||
Warrant liability | — | 184,000 | — |
Options Outstanding | Weighted Average Exercise Price | |||||||
Outstanding as of December 31, 2015 | 374,800 | $ | 4.88 | |||||
Granted | - | - | ||||||
Forfeited | 20 | 67.5 | ||||||
Exercised | - | - | ||||||
Outstanding as of September 30, 2016 | 374,780 | $ | 4.88 |
Warrants Outstanding | Weighted Average Exercise Price | |||||||
Outstanding as of December 31, 2015 | 12,525,721 | $ | 1.25 | |||||
Granted | 5,101,500 | 0.45 | ||||||
Forfeited | (339,932) | 1.25 | ||||||
Exercised | (12,610,183) | 1.25 | ||||||
Outstanding as of September 30, 2016 | 4,677,106 | $ | 0.45 |
OXIS International, Inc. and Subsidiaries | ||||||||
December 31, 2015 and 2014 | ||||||||
Consolidated Balance Sheets | ||||||||
December 31, 2015 | December 31, 2014 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 47,000 | $ | 855,000 | ||||
Prepaid expenses | 2,000 | 27,000 | ||||||
Total Current Assets | 49,000 | 882,000 | ||||||
Fixed assets, net | 5,000 | 6,000 | ||||||
Total Other Assets | 5,000 | 6,000 | ||||||
TOTAL ASSETS | $ | 54,000 | $ | 888,000 | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 893,000 | $ | 412,000 | ||||
Accrued interest | 2,391,000 | 2,025,000 | ||||||
Accrued expenses | 4,326,000 | 3,085,000 | ||||||
Line of credit | 31,000 | 28,000 | ||||||
Warrant liability | 44,531,000 | 21,581,000 | ||||||
Settlement note payable | 691,000 | 691,000 | ||||||
Demand notes payable, net of discount of $-0- and $-0- | 452,000 | 252,000 | ||||||
Convertible debentures, net of discount of $900,000 and $-0-, current portion | 6,820,000 | 1,207,000 | ||||||
Convertible debentures | 1,039,000 | 547,000 | ||||||
Total Current Liabilities | 61,174,000 | 29,828,000 | ||||||
Long term liabilities: | ||||||||
Convertible debentures, net of discount of $2,536,000 and $2,302,000 | 714,000 | 634,000 | ||||||
Total long term liabilities | 714,000 | 634,000 | ||||||
Total liabilities | 61,888,000 | 30,462,000 | ||||||
Stockholders’ Deficit: | ||||||||
Convertible preferred stock - $0.001 par value; 15,000,000 shares authorized: | ||||||||
Series C - 96,230 and 96,230 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively | 1,000 | 1,000 | ||||||
Series H – 25,000 and 25,000 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively | — | — | ||||||
Series I – 1,666,667 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively | 2,000 | 2,000 | ||||||
Common stock - $0.001 par value; 2,400,000 shares authorized; and 2,400,000 and 2,366,588 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively | 2,000 | 2,000 | ||||||
Additional paid-in capital | 84,012,000 | 83,546,000 | ||||||
Accumulated deficit | (145,682,000) | (112,956,000) | ||||||
Noncontrolling interest | (169,000) | (169,000) | ||||||
Total Stockholders’ Deficit | (61,834,000) | (29,574,000) | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | 54,000 | $ | 888,000 |
OXIS International, Inc. and Subsidiaries | ||||||||
December 31, 2015 and 2014 | ||||||||
Statements of Operations | ||||||||
December 31, | ||||||||
2015 | 2014 | |||||||
Revenue: | ||||||||
Product revenues | $ | - | $ | 28,000 | ||||
License revenues | 27,000 | 33,000 | ||||||
TOTAL REVENUE | 27,000 | 61,000 | ||||||
Cost of Product Revenue | - | 57,000 | ||||||
Gross profit | 27,000 | 4,000 | ||||||
Operating Expenses: | ||||||||
Research and development | 1,000,000 | - | ||||||
Selling, general and administrative | 7,954,000 | 2,400,000 | ||||||
Total operating expenses | 8,954,000 | 2,400,000 | ||||||
Loss from Operations | (8,927,000 | ) | (2,396,000 | ) | ||||
Other income (expense) | ||||||||
Change in value of warrant and derivative liabilities | (6,760,000 | ) | (15,963,000 | ) | ||||
Interest expense/income | (17,039,000 | ) | (5,146,000 | ) | ||||
Total Other Income (Expense) | (23,799,000 | ) | (21,109,000 | ) | ||||
Loss before minority interest and provision for income taxes | (32,726,000 | ) | (23,505,000 | ) | ||||
Less: Net loss attributable to the noncontrolling interests | 0 | 16,000 | ||||||
Loss before provision for income taxes | (32,726,000 | ) | (23,489,000 | ) | ||||
Provision for income taxes | - | - | ||||||
Net loss | (32,726,000 | ) | (23,489,000 | ) | ||||
Loss Per Share – basic and diluted | $ | (13.67 | ) | $ | (10.09 | ) | ||
Weighted Average Shares Outstanding – basic and diluted | 2,394,540 | 2,327,873 |
OXIS INTERNATIONAL, INC. AND SUBSIDIARIES |
Consolidated Statement of Stockholders' Deficit |
For the Years Ended December 31, 2015 and 2014 |
Preferred Stock | Common Stock | Additional Paid-in | Accumulated | |||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | |||||||||||||||||||
Balance at December 31, 2013 | 1,787,897 | $ | 3,000 | 2,292,206 | $ | 2,000 | $ | 83,281,000 | $ | (89,467,000 | ) | |||||||||||||
Issuance of stock options | 162,000 | |||||||||||||||||||||||
Issuance of common stock for accrued expenses | 74,652 | - | 103,000 | |||||||||||||||||||||
Net loss | (501,000 | ) | ||||||||||||||||||||||
Balance at December 31, 2014 | 1,787,897 | $ | 3,000 | 2,366,588 | $ | 2,000 | $ | 83,546,000 | $ | (112,956,000 | ) | |||||||||||||
Issuance of stock options | 220,000 | |||||||||||||||||||||||
Issuance of common stock for accrued expenses | 33,412 | 246,000 | (32,680,000 | ) | ||||||||||||||||||||
Net loss | ||||||||||||||||||||||||
Balance at December 31, 2015 | 1,787,897 | $ | 3,000 | 2,400,00 | $ | 2,000 | $ | 84,012,000 | $ | (145,682,000 | ) | |||||||||||||
OXIS INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||
Consolidated Statements of Cash Flows | ||||||||
For the Years Ended December 31, 2015 and 2014 | ||||||||
2015 | 2014 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (32,726,000) | $ | (23,489,000) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation | 2,000 | - | ||||||
Amortization of intangible assets | - | 22,000 | ||||||
Stock compensation expense for options and warrants issued to employees and non-employees | 3,761,000 | 2,630,000 | ||||||
Note Allonges | 3,667,000 | - | ||||||
Amortization of debt discounts | 2,494,000 | 2,759,000 | ||||||
Non-cash interest expense | 9,840,000 | 2,764,000 | ||||||
Change in value of warrant and derivative liabilities | 7,400,000 | 13,962,000 | ||||||
Note settlement | - | (176,000) | ||||||
Changes in operating assets and liabilities: | ||||||||
Inventory | - | 42,000 | ||||||
Other assets | 25,000 | 13,000 | ||||||
Accounts payable and accrued liabilities | 880,000 | (276,000) | ||||||
Net cash used in operating activities | (4,657,000) | (1,749,000) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Acquisition of fixed assets | (1,000) | (6,000) | ||||||
Net cash used by investing activities | (1,000) | (6,000) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from notes payable | 3,850,000 | 2,589,000 | ||||||
Repayment of note payable | - | (6,000) | ||||||
Net cash provided by financing activities | 3,850,000 | 2,583,000 | ||||||
Minority interest | - | (16,000) | ||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (808,000) | 812,000 | ||||||
CASH AND CASH EQUIVALENTS - Beginning of period | 855,000 | 43,000 | ||||||
CASH AND CASH EQUIVALENTS - End of period | $ | 47,000 | $ | 855,000 |
· | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. The Company's Level 1 assets include cash equivalents, primarily institutional money market funds, whose carrying value represents fair value because of their short-term maturities of the investments held by these funds. |
· | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. The Company's Level 2 liabilities consist of liabilities arising from the issuance of convertible securities and in accordance with ASC 815-40: a warrant liability for detachable warrants, as well as an accrued derivative liability for the beneficial conversion feature. These liabilities are remeasured each reporting period. Fair value is determined using the Black-Scholes valuation model based on observable market inputs, such as share price data and a discount rate consistent with that of a government-issued security of a similar maturity. |
· | Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
Description | Level 1 | Level 2 | Level 3 | |||||||||
Assets | ||||||||||||
$ | — | $ | — | $ | — | |||||||
Liabilities | ||||||||||||
Warrant liability | — | 44,531,000 | — | |||||||||
Accrued expense | 4,326,000 |
December 30, 2015 | December 31, 2014 | |||||||
Capitalized patent costs | $ | 642,000 | $ | 642,000 | ||||
Accumulated amortization | (642,000 | ) | (642,000 | ) | ||||
$ | - | $ | - |
· | 0% Convertible Debentures in the principal amount of $2,000,000 due 24 months from the date of issuance (the " 2009 Debentures"), convertible into shares of the Company's common stock at a per share conversion price equal to $12.50 per share; |
· | Series A warrant to purchase such number of shares of the Company's common stock equal to 50% of the principal amount invested by each 2009 Investor (the "2009 Class A Warrants" ) resulting in the issuance of Class A Warrants to purchase 80,000 shares of common stock of the Company. |
· | Series B warrant to purchase such number of shares of the Company's common stock equal to 50% of the principal amount invested by each 2009 Investor (the "2009 Class B Warrants") resulting in the issuance of Class B Warrants to purchase 80,000 shares of common stock of the Company. |
· | 12% Convertible Debentures in the principal amount of $500,000 due April 15, 2012, convertible into shares of the Company's common stock at a per share conversion price equal to $25.00 per share; and |
· | Warrants to purchase 20,000 of shares of the Company's common stock. The warrants are exercisable, on a cash or cashless basis, for up to two years from the date of issue at a per share exercise price equal to $37.50. During 2015, the exercise price was adjusted to $1.25 and the exercise date was extended to June 2019. |
· | 8% Convertible Debentures in the principal amount of $275,000 due in two years, convertible into shares of the Company's common stock at a per share conversion price equal to $12.50 per share; and |
· | Warrants to purchase 22,000 of shares of the Company's common stock. The Class A Warrants and Class B Warrants (collectively, the "Warrants") are exercisable for up to five years from the date of issue at a per share exercise price equal to $15.625 and $18.75 for the Class A Warrants and the Class B Warrants, respectively, on a cash or cashless basis. |
· | 8% Convertible Debentures in the principal amount of $617,500 due in two years, convertible into shares of the Company's common stock at a per share conversion price equal to $12.50 per share; and |
· | Warrants to purchase 49,400 of shares of the Company's common stock. The Class A Warrants and Class B Warrants (collectively, the " March 2012 Warrants") are exercisable for up to five years from the date of issue at a per share exercise price equal $15.625 and $18.75 for the Class A Warrants and the Class B Warrants, respectively, on a cash or cashless basis. |
· | 8% Convertible Debentures in the principal amount of $275,000 due May 2014, convertible into shares of the Company's common stock at a per share conversion price equal to $12.50 per share; and |
· | Warrants to purchase 22,000 of shares of the Company's common stock. The Class A Warrants and Class B Warrants (collectively, the " May 2012 Warrants") are exercisable for up to five years from the date of issue at a per share exercise price equal to $15.625 and $18.75 for the Class A Warrants and the Class B Warrants, respectively, on a cash or cashless basis. |
· | As previously disclosed, the holder of the Series H Preferred is entitled to vote with the common stock, and is entitled to a number of votes equal to (i) the number of shares of common stock it can convert into (without any restrictions or limitations on such conversion), (ii) multiplied by 100. |
· | The holder of the Series H Preferred cannot convert such preferred stock into shares of common stock if the holder and its affiliates after such conversion would own more than 9.9% of the Company's then issued and outstanding shares of common stock. |
· | The Series G Preferred contained a limitation that the holder of the Series G Preferred could not convert such preferred shares into more than 19.999% of the issued and outstanding shares of common stock without the approval of the stockholders if the rules of the principal market on which the common stock is traded would prohibit such a conversion. Since the rules of the Company's principal market did not require such a limitation, that provision has been deleted. |
Number of Warrants | Weighted Average Exercise Price | |||||||
Outstanding, December 31, 2013: | 2,364,183 | $ | 5.00 | |||||
Granted | 1,325,155 | 3.25 | ||||||
Forfeited | (1,037,240 | ) | 2.50 | |||||
Exercised | - | |||||||
Outstanding at December 31, 2014: | 2,652,088 | $ | 2.50 | |||||
Granted | 9,874,833 | 1.25 | ||||||
Forfeited | (1,200 | ) | 0.01 | |||||
Exercised | - | |||||||
Outstanding at December 31, 2015 | 12,525,721 | $ | 1.25 | |||||
Exercisable warrants: | ||||||||
December 31, 2014 | 326,040 | $ | 2.50 | |||||
December 31, 2015 | 12,525,721 | $ | 1.25 |
Number of Options | Weighted Average Exercise Price | |||||||
Outstanding, December 31, 2013 | 117,110 | $ | 15.00 | |||||
Granted | 321,833 | - | ||||||
Exercised | - | |||||||
Expired | (112,903 | ) | 22.50 | |||||
Outstanding, December 31, 2014 | 326,040 | $ | 15.00 | |||||
Granted | 52,000 | 3.29 | ||||||
Exercised | - | |||||||
Expired | (3,240 | ) | 61.00 | |||||
Outstanding, December 31, 2014 | 374,800 | $ | 4.88 | |||||
Exercisable Options: | ||||||||
December 31, 2014 | 326,040 | $ | 15.00 | |||||
December 31, 2015 | 374,800 | $ | 4.88 |
Outstanding Options | Exercisable Options | |||||||||||||||||||||
Range of Exercise Prices | Number of Options | Weighted-Average Remaining Contractual Life | Weighted-Average Exercise Price | Number of Options | Weighted-Average Exercise Price | |||||||||||||||||
$ | 2.50 to $7.50 | 373,833 | 3.34 | $ | 4.76 | 266,555 | $ | 3.66 | ||||||||||||||
$ | 0.10 to $0.20 | 908 | .85 | 50.00 | 908 | 50.00 | ||||||||||||||||
$ | 0.30 to $0.59 | 59 | .71 | 65.54 | 59 | 62.54 | ||||||||||||||||
374,800 | 267,522 |
December 31, | ||||||||
2015 | 2014 | |||||||
Deferred tax assets: | ||||||||
Federal net operating loss carryforward | $ | 15,400,000 | $ | 14,481,000 | ||||
Other | 1,028,000 | 871,000 | ||||||
Patent amortization | (13,000 | ) | (15,000 | ) | ||||
Deferred tax assets before valuation | 16,415,000 | 15,337,000 | ||||||
Valuation allowance | (16,415,000 | ) | (15,337,000 | )) | ||||
Net deferred income tax assets | $ | — | $ | — |
Item | Amount | |||
Registration Statement filing fee | $ | 5,026 | ||
Accountants fees and expenses | 10,000 | |||
Legal fees and expenses | 50,000 | |||
Printing | 5,000 | |||
Miscellaneous | 5,000 | |||
Total | $ | 75,026 |
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) promulgated under the Securities Act of 1933, if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment 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.
(6) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:
The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
Exhibit No. | Exhibit Description |
3.1 | Restated Certificate of Incorporation as filed in Delaware September 10, 1996 and as thereafter amended through March 1, 2002 (filed as Exhibit 3A to the Company's Form 10-KSB as filed with the SEC on April 1, 2002 and incorporated herein by reference). |
3.2 | Certificate of Amendment to Amended and Restated Certificate of Incorporation of Oxis International, Inc. (filed as Exhibit 3.2 to the Company's Form 10-K as filed with the SEC on March 31, 2011 and incorporated herein by reference). |
3.3 | Certificate of Amendment of Certificate of Incorporation (filed as Exhibit 3.3 to the Company's Form S-1/A on August 25, 2016). |
3.4 | Bylaws, as restated effective September 7, 1994 and as amended through April 29, 2003 (filed as Exhibit 3 to the Company's Form 10-QSB as filed with the SEC on August 13, 2003 and incorporated herein by reference). |
4.1 | Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock of Oxis International, Inc. (filed as a section of Exhibit 3A to the Company's Form 10-KSB as filed with the SEC on April 1, 2002 and incorporated herein by reference). |
4.2 | Certificate of Designation of Preferences, Rights and Limitations of Series H Convertible Preferred Stock of Oxis International, Inc. (filed as Exhibit 3.1 to the Company's Form 8-K as filed with the SEC on February 16, 2010 and incorporated herein by reference). |
4.3 | Certificate of Designation of Preferences, Rights and Limitations of Series I Convertible Preferred Stock of Oxis International, Inc. (filed as Exhibit 3.4 to the Company's Form 10-K as filed with the SEC on March 31, 2011 and incorporated herein by reference). |
4.4 | Certificate of Designation of Preferences, Rights and Limitations of Series J Convertible Preferred Stock of Oxis International, Inc. (filed as Exhibit 4.4 to the Company's Form S-1/A on August 25, 2016). |
4.5 | Form of Series A Warrant (see Exhibit 10.10). |
5 | Opinion re legality (filed as Exhibit 5 to the Company's Form S-1/A on October 31, 2016). |
10.1 | Employment Agreement of Steven Weldon (filed as Exhibit 10.1 to the Company's Form 10-K as filed with the SEC on March 30, 2016 and incorporated herein by reference). |
10.2 | Employment Agreement of Anthony Cataldo (filed as Exhibit 10.2 to the Company's Form 10-K as filed with the SEC on March 30, 2016 and incorporated herein by reference). |
10.3 | License Agreement with ID4 Pharna LLC (filed as Exhibit 5 to the Company's Form S-1/A on October 31, 2016). (1`) |
10.4 | License Agreement with the University of Minnesota (filed as Exhibit 5 to the Company's Form S-1/A on October 31, 2016). (1) |
10.5 | License Agreement with Daniel A. Vallera, Ph.D. |
10.6 | License Agreement with MultiCell Immunotherapeutics, Inc. (filed as Exhibit 5 to the Company's Form S-1/A on October 31, 2016). (1) |
10.7 | Note Conversion Agreement (filed as Exhibit 10.7 to the Company's Form S-1/A filed with the SEC on October 3, 2016) |
10.8 | Warrant Conversion Agreement (filed as Exhibit 10.8 to the Company's Form S-1/A filed with the SEC on October 3, 2016) |
10.9 | Preferred Stock Exchange Agreement (filed as Exhibit 10.9 to the Company's Form S-1/A filed with the SEC on October 3, 2016) |
10.10 | Form of Series A Warrant (filed as Exhibit 10.10 to the Company's Form S-1/A filed with the SEC on October 3, 2016) |
10.11 | Placement Agent Agreement with H.C. Wainwright & Co., LLC. (filed as Exhibit 10.11 to the Company's Form S-1/A filed with the SEC on October 3, 2016) |
21 | Subsidiaries of Oxis International, Inc. (filed as Exhibit 21 to the Company's Form S-1/A on August 25, 2016). |
23.1 | Consent of Independent Accounting Firm |
23.2 | Consent of Attorney (see Exhibit 5 above). |
101 | Interactive Data Files (filed as Exhibit 101 to the Company's S-1/A on November 21, 2016. |