OXIS International, Inc. (OTCMKTS:OXIS) Gets A Patent

OXIS International, Inc. (OTCMKTS:OXIS) managed to climb 22.61% up the charts on the news that it has received a patent for its cancer treatment product. But can it retain its elevated chart position?

At first glance, the chances of just that happening appear significant – OXIS seems to have made quite a few impressive announcements in the last couple of weeks, and if you are to believe them, the company is making breakthrough after breakthrough.

Unfortunately, once you dig deeper and try to do some actual due diligence on the matter, it turns out that OXIS‘s situation is not quite as peachy as it may first appear.

A glance at the company’s latest quarterly report reveals a very strange picture indeed:

• Cash and cash equivalents – $30 thousand
• Total Current Assets – $32 thousand
• Total Current Liabilities – $19 MILLION
• No revenues
• Net cash used in operating activities during the last reported quarter – $167 thousand

Suffice it to say that these numbers are extremely confusing and more than a bit suspicious. What sort of functioning entity engaged in cancer-related research spends just below $170 thousand per quarter? That sum is between ten and fifty times smaller than what is usually the norm for that sort of serious research. This fact alone should ring quite a few bells for investors.

The fact that the company has next to no cash on hand is also quite disturbing. It hints of the possibility that OXIS may need to take on even more debt soon to finance its operations – and it has already been burdened with quite a bit of convertible notes. The good news for current investors is that most of said notes were issued at a time when the ticker was trading between $3 and $10, and even though said debt was extremely toxic at the time, it has become less of a threat to investor value lately, what with OXIS‘s fall below the dollar mark. 

But then there’s that one note from ten years ago for about $1.7 million that was adjusted to convert at a rate of “60% of the average of the lowest three trading prices occurring at any time during the 20 trading days preceding conversion“.

Another thing to consider is the fact that even if OXIS is actually doing good work on the cancer treatment drugs AND its science checks out, it is still in the “Phase 1” of testing, so we may be looking at quite a bit of a wait before it can even start to capitalize on the potential of its product. And, once again, it needs funds to keep functioning in the meantime – and it seems highly unlikely that the $585 thousand it acquired by selling 1.7 million shares of its common stock will last for very long.

In conclusion – there is a discrepancy between OXIS‘s words and its actual situation that investors definitely need to take into account when trying to predict whether the stock will go up or down.