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| x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|--------------------------------------------------------------------------------------|

|  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|----------|------------------------------------------------------------------------------------------|

|                                                          |   |                                |
|---------------------------------------------------------------|--------|-------------------------------------|
| Delaware                                                      |   | 94-1620407                          |
| (State or Other Jurisdiction ofIncorporation or Organization) |   | (I.R.S. EmployerIdentification No.) |

|                                                    |   |            |   |   |
|---------------------------------------------------------|--------|-----------------|--------|--------|
| 468 N. Camden Drive, 2nd Fl., Beverly Hills, California |   | 90210           |
| (Address of Principal Executive Offices)                |   | (Zip Code) |

|   |   |   |
|--------|--------|--------|

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|          |         |                                                                                                         |         |      |
|---------------|--------------|--------------------------------------------------------------------------------------------------------------|--------------|-----------|
|          |    |                                                                                                         |    | Page      |
| PART I        |    | CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS                                                       |    |   1  |
|          |         |                                                                                                         |
| ITEM 1.  |    | BUSINESS                                                                                                     |    | 1         |
| ITEM 1A.      |    | RISK FACTORS                                                                                                 |    |   10 |
| ITEM 1B.      |    | UNRESOLVED STAFF COMMENTS                                                                                    |    |   16 |
| ITEM 2.       |    | PROPERTIES                                                                                                   |    |   16 |
| ITEM 3.       |    | LEGAL PROCEEDINGS                                                                                            |    |   16 |
| ITEM 4.       |    | RESERVED                                                                                                     |    |   16 |
|          |         |                                                                                                         |
| PART II  |    |                                                                                                         |    |      |
| ITEM 5.       |    | MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |    |   17 |
| ITEM 6.       |    | SELECTED FINANCIAL DATA                                                                                      |    |   18 |
| ITEM 7.       |    | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                        |    |   18 |
| ITEM 7A.      |    | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                   |    |   25 |
| ITEM 8.       |    | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                  |    |   26 |
| ITEM 9.       |    | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                         |    |   26 |
| ITEM 9A.      |    | CONTROLS AND PROCEDURES                                                                                      |    |   26 |
| ITEM 9B.      |    | OTHER INFORMATION                                                                                            |    |   27 |
|          |         |                                                                                                         |
| PART III |    |                                                                                                         |    |      |
| ITEM 10.      |    | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                       |    |   28 |
| ITEM 11.      |    | EXECUTIVE COMPENSATION                                                                                       |    |   31 |
| ITEM 12.      |    | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS               |    |   35 |
| ITEM 13.      |    | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE                                     |    |   37 |
| ITEM 14.      |    | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                       |    |   38 |
| ITEM 15.      |    | EXHIBITS, FINANCIAL STATEMENT SCHEDULES                                                                      |    |   39 |
| Signatures    |    |   42                                                                                                    |

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CAUTIONARY 

| ITEM 1. | BUSINESS |
|---------|----------|

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----

----

----

| 1. | Conserve and maintain the levels of other antioxidants such as Vitamin E, Vitamin C and glutathione; |
|----|-----------------------------------------------------------------------------------------------------------|

| 2. | Increase respiration and the oxidation of fat (possibly contributing to increased energy and exercise capacity); |
|----|------------------------------------------------------------------------------------------------------------------|

| 3. | Protect the mitochondria from damage; |
|----|---------------------------------------|

| 4. | Protect against environmental ultraviolet radiation (likely to be important in protecting the eyes against cataract producing oxidative injury); and, |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5. | Neutralize increased oxidative stress by providing an ROS (radical oxygen species) and RNS (radical nitrogen species) scavenging capacity that protects key molecules in the body. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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----

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|  | U.S. Patent 5,438,151 issued August 1, 1995 entitled “Process for the Preparation of Ergothioneine” will expire on February 8, 2014.                                                                |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | U.S. Patent 6,103,746 issued August 8, 2000 entitled “Methods and Compositions for the Protection of Mitochondria” will expire on February 19, 2018.                                                |
|  | Mexican Patent 211035 issued October 25, 2002 entitled “Methods and Compositions for the Protection of Mitochondria” will expire on February 19, 2018. OXIS Ergothioneine Pending Applications |
|  | U.S. Application 12/595,506 filed October 9, 2009 entitled “Ergothioneine and/or its Derivatives as a Cell Preservative”.                                                                           |
|  | Canadian Application (Number not yet assigned) filed October 9, 2009 entitled “Ergothioneine and/or its Derivatives as a Cell Preservative”.                                                        |

|  | U.S. Patent 5,968,920 issued October 19, 1999 entitled “Novel Compounds having a Benzoisoelen-Azoline and -Azine Structure, Method for Preparing Same and Therapeutic Uses Thereof” will expire on April 7, 2015. |
|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | U.S. Patent 6,093,532 issued July 25, 2000 entitled “Method for Storing a Biological Organ Transplant Graft Using a Benzisoelen-Azoline or -Azine Compound” will expire on April 7, 2015.                         |
|  | U.S. Patent 5,973,009 issued October 26, 1999 entitled “Aromatic Diselenides and Selenosulfides, their Preparation and their Uses, more Particularly their Therapeutic Use” will expire on December 23, 2017.     |
|  | U.S. Patent 6,525,040 issued February 25, 2003 entitled “Cyclic Organoselenium Compounds, their Preparation and their Uses” will expire on December 23, 2017.                                                |

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ITEM 

|   | Risks Related To Our Business |
|--------|-------------------------------|

----

|   | · | requirements for the reformulation of certain or all products to meet new standards, |
|--------|--------|--------------------------------------------------------------------------------------|

|   | · | the recall or discontinuance of certain or all products, |
|--------|--------|----------------------------------------------------------|

|   | · | additional record keeping, |
|--------|--------|----------------------------|

|   | · | expanded documentation of the properties of certain or all products, |
|--------|--------|----------------------------------------------------------------------|

----

|   | · | expanded or different labeling, |
|--------|--------|---------------------------------|

|   | · | adverse event tracking and reporting, and |
|--------|--------|-------------------------------------------|

|   | · | additional scientific substantiation. |
|--------|--------|---------------------------------------|

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----

|   | Risks Related to Our Securities |
|--------|---------------------------------|

----

|   | · | our merger with or into another company; |
|--------|--------|------------------------------------------|

|   | · | a sale of substantially all of our assets; and |
|--------|--------|------------------------------------------------|

|   | · | amendments to our certificate of incorporation. |
|--------|--------|-------------------------------------------------|

|   | · | announcements by us of new product releases, or the delay in releasing new products; |
|--------|--------|--------------------------------------------------------------------------------------|

|   | · | developments with respect to our patents or proprietary rights; |
|--------|--------|-----------------------------------------------------------------|

|   | · | announcements of new products or new contracts by our competitors; |
|--------|--------|--------------------------------------------------------------------|

|   | · | actual or anticipated variations in our operating results; |
|--------|--------|------------------------------------------------------------|

|   | · | changes in financial estimates by securities analysts and whether our earnings meet or exceed such estimates; |
|--------|--------|---------------------------------------------------------------------------------------------------------------|

----

|   | · | conditions and trends in the nutraceutical, cosmeceutical and other industries; |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | new accounting standards; |
|--------|--------|---------------------------|

|   | · | general economic, political and market conditions and other factors; and |
|--------|--------|--------------------------------------------------------------------------|

|   | · | the occurrence of any of the risks described in this report. |
|--------|--------|--------------------------------------------------------------|

ITEM1B

| ITEM 2. | PROPERTIES |
|---------|------------|

| ITEM 3. | LEGAL PROCEEDINGS |
|---------|-------------------|

| ITEM 4. | RESERVED |
|---------|----------|

----

| ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. |
|---------|---------------------------------------------------------------------------------------------------------------------|

| YEAR             | PERIOD         |   | HIGH   |   |   | LOW    |   |
|------------------|----------------|--------|--------|--------|--------|--------|--------|
| Fiscal Year 2008 | First Quarter  |   | $      | 0.13   |   |   | $      | 0.06 |   |
|             | Second Quarter |   | $      | 0.13   |   |   | $      | 0.01 |   |
|             | Third Quarter  |   | $      | 0.05   |   |   | $      | 0.02 |   |
|             | Fourth Quarter |   | $      | 0.07   |   |   | $      | 0.03 |   |
|             |           |   |   |   |   |   |   |   |   |
| Fiscal Year 2009 | First Quarter  |   | $      | 0.06   |   |   | $      | 0.04 |   |
|             | Second Quarter |   | $      | 0.15   |   |   | $      | 0.04 |   |
|             | Third Quarter  |   | $      | 0.17   |   |   | $      | 0.07 |   |
|             | Fourth Quarter |   | $      | 0.40   |   |   | $      | 0.16 |   |

----

| ITEM 6. | SELECTED FINANCIAL DATA |
|---------|-------------------------|

| ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|---------|---------------------------------------------------------------------------------------------|

----

|   | · | 0% Convertible Debentures in the aggregate principal amount of $2,000,000 (the “Convertible Debentures”), convertible into an aggregate of up to 40,000,000  shares of the Company’s common stock at a per share conversion price equal to $0.05 per share. The Convertible Debenture is not secured by any collateral and become due and payable on September 30, 2011. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | “Series A Warrants” to purchase an aggregate of up to 20,000,000 shares of the Company’s common stock. The Series A Warrants have an exercise price of $0.0625 per share and expire on September 30, 2014. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | “Series B Warrants” to purchase an aggregate of up to 20,000,000 shares of the Company’s common stock.  The Series B Warrants have an exercise of $0.0750 per share and expire on September 30, 2014. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|             |   |   |   |   | Decrease from 2008 |   |
|------------------|--------|--------|--------|--------|--------------------|--------|
|             |   | 2009   |   |   | 2008               |   |   | Amount |   |   | % |   |
|             |   |   |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Product revenues |   | $      | 48,000 |   |               | $      | 1,143,000 |   |   | $ | (1,095,000 | ) |   |   | (95.8 | ) |

----

|                     |   |   |   |   | Decrease from 2008 |   |
|--------------------------|--------|--------|--------|--------|--------------------|--------|
|                     |   | 2009   |   |   | 2008               |   |   | Amount |   |   | % |   |
|                     |   |   |   |   |               |   |   |   |   |   |   |   |
| Cost of product revenues |   | $      | 50,000 |   |               | $      | 909,000 |   |   | $ | (859,000 | ) |   |   | (94.5 | ) |

----

----

----

ITEM

----

| ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
|---------|---------------------------------------------|

| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. |
|---------|---------------------------------------------------------------------------------------|

ITEM

| ·   | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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ITEM

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| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
|----------|--------------------------------------------------------|

| Name                                 |   | Age |   | Position                                          |   |
|--------------------------------------|--------|-----|--------|---------------------------------------------------|--------|
| Anthony J. Cataldo (1)               |   | 57  |   | Chairman of the Board and Chief Executive Officer |   |
| Gary M. Post (2)                     |   | 61  |   | Director and Secretary                            |   |
| Anshuman “Andy” Dube (3) |   | 33  |   | Director                                          |   |
| Bernard Landes(4)                    |   | 60  |   | President                                         |   |
| Michael Handelman(4)                 |   | 51  |   | Chief Financial Officer and Treasurer             |   |

| (1) | Appointed Chairman and Chief Executive Officer on March 26, 2009. |
|-----|-------------------------------------------------------------------|

| (2) | Resigned as Chief Operating Officer on June 20, 2008 and was elected Secretary on August 17, 2009. |
|-----|----------------------------------------------------------------------------------------------------|

| (3) | Appointed to the Board of Directors on March 5, 2010. |
|-----|-------------------------------------------------------|

| (4) | Appointed effective March 1, 2010. |
|-----|------------------------------------|

----

|   | · | Anthony J Cataldo was late in filing the Form 3 that he is required to be filed upon becoming an officer or director or a public company, and, |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Theorem Group LLC was late filing the Form 3 it is required to file upon acquiring beneficial ownership of more than 10% of this company’s equity securities. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | the quality and integrity of our financial statements and reports; |
|--------|--------|--------------------------------------------------------------------|

|   | · | the independent auditors’ qualifications and independence; and |
|--------|--------|----------------------------------------------------------------------|

|   | · | the performance of our internal audit function and independent auditors. |
|--------|--------|--------------------------------------------------------------------------|

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| ITEM 11. | EXECUTIVE COMPENSATION |
|----------|------------------------|

| Name and Principal Position                                       |   | Year     |   | Salary                                         |   | Bonus                                          |   | StockAwards                                    |   | Option/Warrant Awards (1)                      |   | Non-Equity Incentive Plan Compensation Earnings |   | Nonqualified Deferred Compensation Earnings    |   | All Other Compensation                         |   | Total                                          |
|-------------------------------------------------------------------|--------|----------|--------|------------------------------------------------|--------|------------------------------------------------|--------|------------------------------------------------|--------|------------------------------------------------|--------|-------------------------------------------------|--------|------------------------------------------------|--------|------------------------------------------------|--------|------------------------------------------------|
| Maurice Spitz,President, Acting Chief Executive Officer (2)  |   | 20092008 |   | $ –––$ ––– |   | $ –––$ ––– |   | $ –––$ ––– |   | $ –––$ ––– |   | $ –––$ –––  |   | $ –––$ ––– |   | $ –––$ ––– |   | $ –––$ ––– |
| Anthony J. Cataldo, Chairman, Chief Executive Officer (3)    |   | 20092008 |   | $ –––$ ––– |   | $ –––$ ––– |   | $ –––$ ––– |   | $ –––$ ––– |   | $ –––$ –––  |   | $ –––$ ––– |   | $ –––$ ––– |   | $ –––$ ––– |

| (1) | This column represents the aggregate grant date fair value of 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 8 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. Spitz was appointed by the board as President and Acting Chief Executive Officer on July 30, 2008 and resigned from this position on March 26, 2009 when he was appointed a Vice President , but resigned this position on July 13, 2009 Mr. Spitz resigned from the Board on March1, 2010. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Mr. Cataldo was appointed Chairman and Chief Executive Officer on March 26, 2009. |
|-----|-----------------------------------------------------------------------------------|

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| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
|----------|------------------------------------------------------------------------------------------------|

| Name and Address of Beneficial Owner                                                                                    |   | Number of Shares of Common Stock Beneficially Owned |       |   | Percent of Shares of Outstanding Common Stock |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|------------|--------|-----------------------------------------------|--------|
| Bristol Investment Fund, Ltd. (1)Bristol Capital Advisors, LLC10990 Wilshire Boulevard, Suite 1410Los Angeles, CA 90024 |   |                                                | 43,371,025 |   |                                          |   | 40.64 | % |
| Theorem Group, LLC (2)2049 Century Park East, Suite 3630Los Angeles, California 90067                                   |   |                                                | 82,500,000 |   |                                          |   | 52.41 | % |
| Marvin S. Hausman, M.D. (3)                                                                                             |   |                                                | 4,938,775  |   |                                          |   | 6.00 | % |
| Anthony J. Cataldo (4)                                                                                                  |   |                                                | 6,704,081  |   |                                          |   | 8.66 | % |
| Gary M. Post (5)                                                                                                        |   |                                                | 3,871,418  |   |                                          |   | 4.90 | % |
| Anshuman Dube (2)2049 Century Park East, Suite 3630Los Angeles, California 90067                                        |   |                                                |       |   |                                          |   |   |   |
| Bernard Landes (6)                                                                                                      |   |                                                | 2,220,453  |   |                                          |   | 2.87 | % |
| Michael Handelman (7)                                                                                                   |   |                                                | 250,000    |   |                                          |   | * |   |
| Executive officers and directors as a group — 5 persons (8)                                                       |   |                                                | 95,545,952 |   |                                          |   | 58.59 | % |
|                                                                                                                    |   |                                                |       |   |                                          |   |   |   |

| (1) | The holdings of Bristol Investment Fund, Ltd. include 3,849,882 shares of common stock as reported on SC 13G/A filed with the SEC on February 12, 2010, 10,200,000 shares of common stock issued subsequent to the SC 13G/A reporting period, warrants to purchase 717,143 shares of common stock at a purchase price of $0.35 per share, and warrants to purchase 28,604,000 shares of common stock at a purchase price of $0.01 per share. 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) | The holdings of Theorem Group, LLC include 40,000,000 shares issuable upon the voluntary conversion by Theorem Group, LLC of a convertible debenture at the current conversion price of $0.05 per share, 25,000 shares of Series H Convertible Preferred Stock, which can convert into 2,500,000 shares of common stock, warrants to purchase 20,000,000 shares of common stock at a purchase price of $0.0625 per share, and warrants to purchase 20,000,000 shares of common stock at a purchase price of $0.075 per share.  Anshuman Dube, managing director of Theorem Group, LLC, has voting and investment control over the securities held by Theorem Group, LLC.  Mr. Dube disclaims beneficial ownership of these securities. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The holdings of Marvin S. Hausman, M.D. include 2,224,080 shares of common stock, 1,209,695 shares issuable upon exercise of options that are exercisable currently or within 60 days of March 30, 2010, and 1,505,000 warrant shares exercisable currently or within 60 days of March 30, 2010. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | None of the holdings are exercisable currently or within 60 days of March 30, 2010. |
|-----|-------------------------------------------------------------------------------------|

| (5) | The holdings include 1,500,000 shares of common stock, 851,469 shares issuable upon exercise of options that are exercisable currently or within 60 days of March 30, 2010 and 831,608 warrant shares exercisable currently or within 60 days of March 30, 2010. Options and warrants totaling 1,261,191 shares of Mr. Post’s holdings are registered in the name of Ambient Advisors, LLC.  Mr. Post is a Managing Director of Ambient Advisors, LLC and is the beneficial owner of all shares held in Ambient’s name. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | None of the holdings are exercisable currently or within 60 days of March 30, 2010. |
|-----|-------------------------------------------------------------------------------------|

| (7) | None of the holdings are exercisable currently or within 60 days of March 30, 2010. |
|-----|-------------------------------------------------------------------------------------|

| (8) | The holdings of the executive officers and directors as a group include an aggregate 1,500,000 shares of common stock, 845,918 shares issuable upon exercise of options that are exercisable currently or within 60 days of March 30, 2010, 40,831,608 warrant shares exercisable currently or within 60 days of March 30, 2010, 40,000,000 shares issuable upon the voluntary conversion by Theorem Group, LLC of a convertible debenture, and 25,000 shares of Series H Convertible Preferred Stock, which can convert into 2,500,000 shares of common stock. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 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)     |   |                                                                                            | 3,255,032 |   |                                                                            | $      | 0.34   |                                                                                                                                                 |   |   | 2,245,130 |   |
| Equity compensation plans not approved by security holders (2) |   |                                                                                            | 3,461,333 |   |                                                                            | $      | 0.22   |                                                                                                                                                 |   |   | — |   |
| Total                                                          |   |                                                                                            | 6,716,365 |   |                                                                            |   |   |                                                                                                                                                 |   |   | 2,245,130 |   |

----

| (1) | As of December 31, 2009, we had options issued and outstanding to purchase 3,056,282 shares of common stock under our 2003 Stock Incentive Plan and 198,750 shares of common stock under the 1994 Stock Incentive Plan. Our 1994 Stock Incentive Plan terminated on April 30, 2004 and no additional grants may be made under that plan. As approved by stockholders, we may grant additional options to purchase up to 2,245,130 shares of common stock under our 2003 Stock Incentive Plan as of December 31, 2009.  The number of shares reserved for issuance pursuant to options under the 2003 Stock Incentive Plan was increased by 300,000 shares on January 1, 2009 pursuant to an evergreen provision in the stock option plan. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | As of December 31, 2009, we had options and warrants issued and outstanding for the purchase of an aggregate of 3,461,333 shares of our common stock to officers, directors, consultants and advisors outside of our 1994 Stock Incentive Plan and our 2003 Stock Incentive Plan, which were issued on a case by case basis at the discretion of the board of directors. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE |
|----------|--------------------------------------------------------------------------|

----

| ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
|----------|----------------------------------------|

|                   |   | 2008   |    |   | 2009   |   |
|------------------------|--------|--------|---------|--------|--------|--------|
| Audit Fees (1)         |   | $      | 59,398  |   |   | $      | 55,000 |   |
| Audit-Related Fees (2) |   |   | — |   |   |   | — |   |
| Tax Fees (3)           |   |   | — |   |   |   | — |   |
| All Other Fees         |   |   | — |   |   |   | — |   |
| Total                  |   | $      | 59,398  |   |   | $      | 55,000 |   |

| (1) | Audit fees represent fees for professional services provided in connection with the audit of our annual financial statements and the review of our financial statements included in our Form 10-Q and 10-QSB quarterly reports and services that are normally provided in connection with statutory or regulatory filings for the 2008 and 2009 fiscal years. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Audit-related fees represent fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and not reported above under “Audit Fees.” |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Tax fees represent fees for professional services related to tax compliance, tax advice and tax planning. |
|-----|-----------------------------------------------------------------------------------------------------------|

----

| ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES |
|----------|-----------------------------------------|

|          |   |                                                                                                                          |   | Incorporated by Reference |
|---------------|--------|-------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|
| ExhibitNumber |   |  Exhibit Description                                                                                                     |   | Form                      |   | Date |   | Number |   | FiledHerewith |
|          |   |                                                                                                                          |   |                      |   |   |   |   |   |   |
| 3.1           |   | Restated Certificate of Incorporation as filed in Delaware September 10, 1996 and as thereafter amended through March 1, 2002 |   | 10-KSB                    |   | 04/01/02 |   | 3.A |   |   |
|          |   |                                                                                                                          |   |                      |   |   |   |   |   |   |
| 3.2           |   | Bylaws, as restated effective September 7, 1994 and as amended through April 29, 2003                                         |   | 10-QSB                    |   | 08/13/03 |   | 3 |   |   |
|          |   |                                                                                                                          |   |                      |   |   |   |   |   |   |
| 3.3           |   | Certificate of Designation dated February 5, 2010                                                                             |   | 8-K                       |   | 2/16/10 |   | 3.1 |   |   |
|          |   |                                                                                                                          |   |                      |   |   |   |   |   |   |
| 4.1           |   | Convertible Demand Promissory Note dated April 7, 2009                                                                        |   | 8-K                       |   | 4/13/09 |   | 4.1 |   |   |
|          |   |                                                                                                                          |   |                      |   |   |   |   |   |   |
| 4.2           |   | Form of Warrant to Purchase Common Stock dated April 7, 2009                                                                  |   | 8-K                       |   | 4/13/09 |   | 4.2 |   |   |
|          |   |                                                                                                                          |   |                      |   |   |   |   |   |   |
| 4.3           |   | Oxis International, Inc. 2003 Stock Incentive Plan                                                                            |   | 14A                       |   | 5/8/2003 |   |   |   |   |
|          |   |                                                                                                                          |   |                      |   |   |   |   |   |   |
| 4.4           |   | Form of Convertible Debenture dated October 1, 2009                                                                           |   | 8-K                       |   | 10/09/09 |   | 4.2 |   |   |
|          |   |                                                                                                                          |   |                      |   |   |   |   |   |   |
| 4.5           |   | Form Of Series A Common Stock Purchase Warrant dated October 1, 2009                                                          |   | 8-K                       |   | 10/09/09 |   | 4.3 |   |   |
|          |   |                                                                                                                          |   |                      |   |   |   |   |   |   |
| 4.6           |   | Form Of Series B Common Stock Purchase Warrant dated October 1, 2009                                                          |   | 8-K                       |   | 10/09/09 |   | 4.4 |   |   |
|          |   |                                                                                                                          |   |                      |   |   |   |   |   |   |
| 10.1          |   | Form of Indemnification Agreement between OXIS International, Inc. and its Officers and Directors                             |   | SB-2                      |   | 02/25/05 |   | 10.P |   |   |
|          |   |                                                                                                                          |   |                      |   |   |   |   |   |   |
| 10.2          |   | Engagement Letter with Ambient Advisors                                                                                       |   | 8-K                       |   | 5/31/06 |   | 10.1 |   |   |
|          |   |                                                                                                                          |   |                      |   |   |   |   |   |   |
| 10.3          |   | Common Stock Purchase Warrant dated June 2, 2006.                                                                             |   | 8-K                       |   | 7/26/06 |   | 10.2 |   |   |
|          |   |                                                                                                                          |   |                      |   |   |   |   |   |   |
| 10. 4         |   | Amendment #2 to Exclusive License and Supply Agreement dated July 19, 2006.                                                   |   | 8-K                       |   | 7/26/06 |   | 10.3 |   |   |
|          |   |                                                                                                                          |   |                      |   |   |   |   |   |   |
| 10.5          |   | Form of Secured Convertible Debenture dated October 25, 2006.                                                                 |   | 8-K                       |   | 10/26/06 |   | 10.2 |   |   |
|          |   |                                                                                                                          |   |                      |   |   |   |   |   |   |
| 10.6          |   | Form of Series A, B, C, D, E Common Stock Purchase Warrant dated October 25, 2006.                                            |   | 8-K                       |   | 10/26/06 |   | 10.3 |   |   |

----

|          |   |                                                                                                                         |   | Incorporated by Reference |
|---------------|--------|------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|
| ExhibitNumber |   |  Exhibit Description                                                                                                    |   | Form                      |   | Date |   | Number |   | FiledHerewith |
|          |   |                                                                                                                         |   |                      |   |   |   |   |   |   |
| 10.7          |   | Advisory Agreement between OXIS International, Inc. and Ambient Advisors, LLC dated November 6, 2006.                        |   | 8-K                       |   | 11/13/06 |   | 10.2 |   |   |
|          |   |                                                                                                                         |   |                      |   |   |   |   |   |   |
| 10.8          |   | Amended and Restated Exclusive License Agreement between OXIS and Alteon, Inc. dated April 2, 2007                           |   | 10-QSB                    |   | 8/14/07 |   | 10.1 |   |   |
|          |   |                                                                                                                         |   |                      |   |   |   |   |   |   |
| 10.9          |   | Amendment to Advisory Agreement between OXIS and Ambient Advisors, Inc. dated October 11, 2007                               |   | 8-K                       |   | 10/16/07 |   | 10.1 |   |   |
|          |   |                                                                                                                         |   |                      |   |   |   |   |   |   |
| 10.10         |   | Secured Promissory Note from Percipio Biosciences, Inc. dated December 11, 2008                                              |   | 8-K                       |   | 12/18/08 |   | 10.2 |   |   |
|          |   |                                                                                                                         |   |                      |   |   |   |   |   |   |
| 10.11         |   | Securities Purchase Agreement dated October 1, 2009                                                                          |   |                      |   |   |   |   |   |   |
|          |   |                                                                                                                         |   |                      |   |   |   |   |   |   |
| 10.12         |   | Waiver Agreement dated October 1, 2009                                                                                       |   | 8-K                       |   | 10/09/09 |   | 10.1 |   |   |
|          |   |                                                                                                                         |   |                      |   |   |   |   |   |   |
| 10.13         |   | Standstill And Forbearance Agreement Dated October 1, 2009                                                                   |   | 8-K                       |   | 10/09/09 |   | 10.2 |   |   |
|          |   |                                                                                                                         |   |                      |   |   |   |   |   |   |
| 10.14         |   | Escrow Agreement by and among OXIS, Theorem Group, LLC, Theorem Capital, LLC and  Law Offices of Jacques Chen.     |   |                      |   |   |   |   |   | X |
|          |   |                                                                                                                         |   |                      |   |   |   |   |   |   |
| 10.15         |   | Exchange Agreement dated February 10, 2010                                                                                   |   | 8-K                       |   | 02/16/10 |   | 10/1 |   |   |
|          |   |                                                                                                                         |   |                      |   |   |   |   |   |   |
| 10.16         |   | Assignment and Assumption Agreement, dated April 7, 2009, between Oxis International, Inc. and Bristol Investment Fund, Ltd. |   | 8-K                       |   | 4/13/09 |   | 99.1 |   |   |
|          |   |                                                                                                                         |   |                      |   |   |   |   |   |   |
| 10.17         |   | Employment Agreement by and between OXIS and Michael Handelman, dated March 11, 2010                                         |   |                      |   |   |   |   |   | X  |
|          |   |                                                                                                                         |   |                      |   |   |   |   |   |   |
| 10.18         |   | Employment Agreement, dated March 29, 2010, between Oxis International, Inc. and Anthony J. Cataldo                          |   |                      |   |   |   |   |   | X |
|          |   |                                                                                                                         |   |                      |   |   |   |   |   |   |
| 10.19         |   | Advisory Agreement, between Oxis International, Inc. and Gary M. Post, dated March 29, 2010                                  |   |                      |   |   |   |   |   | X |
|          |   |                                                                                                                         |   |                      |   |   |   |   |   |   |
|  10.20   |   |  Employment Agreement by and between OXIS and Bernard Landes, dated March 11, 2010                                      |   |                      |   |   |   |   |   |  X |

----

|          |   |                                                                                                                                                         |   | Incorporated by Reference |
|---------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|
| ExhibitNumber |   |  Exhibit Description                                                                                                                                    |   | Form                      |   | Date |   | Number |   | FiledHerewith |
|          |   |                                                                                                                                                         |   |                      |   |   |   |   |   |   |
|  16.1    |   |  Letter from Williams & Webster, P.S. dated December 8, 2008                                                                                        |   |  8-K                 |   |  12/8/08 |   |  16.1 |   |   |
|          |   |                                                                                                                                                         |   |                      |   |   |   |   |   |   |
|  21.1    |   |  Subsidiaries of OXIS International, Inc.                                                                                                               |   |                      |   |   |   |   |   |  X |
|          |   |                                                                                                                                                         |   |                      |   |   |   |   |   |   |
| 31.1          |   | Certification of the Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |   |                      |   |   |   |   |   | X |
|          |   |                                                                                                                                                         |   |                      |   |   |   |   |   |   |
| 31.2          |   | Certification of the Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |   |                      |   |   |   |   |   | X |
|          |   |                                                                                                                                                         |   |                      |   |   |   |   |   |   |
| 32.1          |   | Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.   |   |                      |   |   |   |   |   | X |
|          |   |                                                                                                                                                         |   |                      |   |   |   |   |   |   |
| 32.2          |   | Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.   |   |                      |   |   |   |   |   | X |
|          |   |                                                                                                                                                         |   |                      |   |   |   |   |   |   |
|          |   |                                                                                                                                                         |   |                      |   |   |   |   |   |   |

----

SIGNATURES

| Dated: March 30, 2010  | OXIS International, Inc. By:   /s/ Anthony J. Cataldo                                                              Anthony J. CataldoChief Executive Officer |
|-----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                                                                                                                                                                                                                                                                                           |   | Position                                                                  |   | Date                 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|----------------------|
|                                                                                                                                                                                                                                                                                           |   |                                                                      |   |                 |
| /s/ Anthony J. Cataldo                                        Anthony J. Cataldo  |   | Chief Executive Officer and Director (Principal Executive Officer)   |   | March 30, 2010  |
| /s/ Michael Handelman                                       Michael Handelman          |   | Chief Financial Officer and Treasurer (Principal Financial Officer)  |   | March 30, 2010       |
| /s/ Gary M. Post                                        Gary M. Post              |   | Secretary and Director                                                    |   | March 30, 2010       |
| /s/ Anshuman Dube                                        Anshuman Dube                 |   | Director                                                                  |   | March 30, 2010       |

----

|                                                                                                        | Page   |
|-------------------------------------------------------------------------------------------------------------|--------|
| Report of Independent Registered Public Accounting Firm                                                     |   |
| Seligson & Giannattasio, LLP                                                                            | F-1    |
| Consolidated Financial Statements                                                                           |   |
| Balance Sheets as of December 31, 2009 and 2008                                                   | F-2    |
| Statements of Operations For Years Ended December 31, 2009 and 2008                          | F-3    |
| Statement of Stockholders’ Equity (Deficit) For Years Ended December 31, 2009 and 2008 | F-4    |
| Statements of Cash Flows For Years Ended December 31, 2009 and 2008                          | F-5    |
| Notes To Consolidated Financial Statements                                                                  | F-6    |

----

----

| OXIS International, Inc. and SubsidiariesConsolidated Balance SheetsDecember 31, 2009 and 2008 |
|----------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                             |   | December 31, 2009 |           |   | December 31, 2008 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|----------------|--------|-------------------|--------|
| ASSETS                                                                                                                                                                           |   |              |           |   |              |   |
| Current Assets:                                                                                                                                                                  |   |              |           |   |              |   |
| Cash and cash equivalents                                                                                                                                                        |   | $                 | 1,293,000      |   |              | $      | 22,000 |   |
| Inventory                                                                                                                                                                        |   |              |   — |   |              |   | 3,000 |   |
| Note receivable                                                                                                                                                                  |   |              |   — |   |              |   | 250,000 |   |
| Total Current Assets                                                                                                                                                             |   |              | 1,293,000      |   |              |   | 275,000 |   |
| Property, plant and equipment, net                                                                                                                                               |   |              |   — |   |              |   | — |   |
| Patents, net                                                                                                                                                                     |   |              | 84,000         |   |              |   | 308,000 |   |
| Goodwill and other assets, net                                                                                                                                                   |   |              | 7,000          |   |              |   | 7,000 |   |
| Total Other Assets                                                                                                                                                               |   |              | 91,000         |   |              |   | 315,000 |   |
| TOTAL ASSETS                                                                                                                                                                     |   | $                 | 1,384,000      |   |              | $      | 590,000 |   |
| LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                                                                                      |   |              |           |   |              |   |   |   |
| Current Liabilities:                                                                                                                                                             |   |              |           |   |              |   |   |   |
| Accounts payable                                                                                                                                                                 |   | $                 | 925,000        |   |              | $      | 919,000 |   |
| Accrued expenses                                                                                                                                                                 |   |              | 1,404,000      |   |              |   | 1,029,000 |   |
| Warrant liability                                                                                                                                                                |   |              | 2,405,000      |   |              |   | 174,000 |   |
| Demand note payable                                                                                                                                                              |   |              | 180,000        |   |              |   | 25,000 |   |
| Convertible debentures, net of discounts of $0 and $552,000                                                                                                                      |   |              | 1,945,000      |   |              |   | 2,123,000 |   |
| Total Current Liabilities                                                                                                                                                        |   |              | 6,859,000      |   |              |   | 4,270,000 |   |
| Convertible debentures, net of discount of $1,750,685                                                                                                                            |   |              | 249,000        |   |              |   | -- |   |
|      Total Liabilities                                                                                                                                  |   |              | 7,108,000      |   |              |   | 4,270,000 |   |
| Stockholders’ Deficit:                                                                                                                                                     |   |              |           |   |              |   |   |   |
| Convertible preferred stock - $0.01 par value; 15,000,000 shares authorized:                                                                                                     |   |              |   — |   |              |   | — |   |
| Series C - 96,230 and 96,230 shares issued and outstanding at December 31, 2009 and December 31, 2008, respectively                                                              |   |              | 1,000          |   |              |   | 1,000 |   |
| Series G – 25,000 and 25,000 shares issued and outstanding at December 31, 2009 and December 31, 2008, respectively                                                        |   |              | —        |   |              |   | — |   |
| Common stock - $0.001 par value; 150,000,000 shares authorized; 67,040,809 and 46,850,809 shares issued and outstanding at December 31, 2009 and December 31, 2008, respectively |   |              | 67,000         |   |              |   | 47,000 |   |
| Additional paid-in capital                                                                                                                                                       |   |              | 71,308,000     |   |              |   | 71,126,000 |   |
| Accumulated deficit                                                                                                                                                              |   |              | (77,100,000    | )      |              |   | (74,854,000 | ) |
| Total Stockholders’ Deficit                                                                                                                                                |   |              | (5,724,000     | )      |              |   | (3,680,000 | )  |
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                                                                                |   | $                 | 1,384,000      |   |              | $      | 590,000 |   |

----

| OXIS International, Inc. and SubsidiariesConsolidated Statements of OperationsYears Ended December 31, 2009 and 2008  |
|-------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | December 31 |          |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|---------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | 2009        |          |   | 2008 |   |
| Revenue:                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |        |          |   |   |   |
| Product revenues                                                                                                                                                                                                                |   |        | 48,000        |   |   | $ | 1,143,000 |   |
| License revenues                                                                                                                                                                                                                |   |        | —       |   |   |   | — |   |
| TOTAL REVENUE                                                                                                                                                                                                                   |   |        | 48,000        |   |   |   | 1,143,000 |   |
| Cost of Product Revenue                                                                                                                                                                                     |   |        | 50,000        |   |   |   | 909,000 |   |
| Gross profit                                                                                                                                                                                                               |   |        | (2,000        | ) |   |   | 234,000 |   |
| Operating Expenses:                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |        |          |   |   |   |   |   |
| Research and development                                                                                                                                                                                              |   |        | —  |   |   |   | 44,000 |   |
| Selling, general and administrative                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |        | 1,154,000     |   |   |   | 1,401,000 |   |
| Total operating expenses                                                                                                                                                                                                   |   |        | 1,154,000     |   |   |   | 1,445,000 |   |
| Loss from Operations                                                                                                                                                                                   |   |        | (1,156,000    | ) |   |   | (1,211,000 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |        |          |   |   |   |   |   |
| Interest income                                                                                                                                                                                                       |   |        | 4,000         |   |   |   | — |   |
| Other income                                                                                                                                                                                                          |   |        | 16,000        |   |   |   | — |   |
|  Change in value of warrant and derivative liabilities                                                                                                                                                                                                                                                                                                                                                                                                                |   |        | 26,000        |   |   |   | 159,000 |   |
| Interest expense                                                                                                                                                                                                      |   |        | (1,136,000    | ) |   |   | (1,657,000 | ) |
| Total Other Income (Expense)                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |        | (1,090,000    | ) |   |   | (1,498,000 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |        |          |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |        |          |   |   |   |   |   |
| Loss before provision for income taxes                                                                       |   |        | (2,246,000    | ) |   |   | (2,709,000 | ) |
| Provision for income taxes                                                                                                                                                                        |   |        | —  |   |   |   | 77,000 |   |
| Net loss from continuing operations                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |        | (2,246,000    | ) |   |   | (2,786,000 | ) |
| Loss from discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |        |          |   |   |   |   |   |
| Net income from discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |        | —       |   |   |   | 758,000 |   |
| Net loss on disposal of discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                            |   |        | —       |   |   |   | (2,978,000 | ) |
| Net loss from discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |        | —       |   |   |   | (2,220,000 | ) |
| Net loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |        | (2,246,000    | ) |   |   | (5,006,000 | ) |
| Loss Per Share – basic and diluted                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |        |          |   |   |   |   |   |
| Continuing operations                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | $           | (0.05         | ) |   | $ | (0.06 | ) |
| Discontinued operations                                                                                                                                                                                                    |   |        | —       |   |   | $ | (0.05 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $           | (0.05         | ) |   | $ | (0.11 | ) |
| Weighted Average Shares Outstanding                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |        |          |   |   |   |   |   |
| Basic                                                                                                                            |   |        | 48,619,165    |   |   |   | 46,850,809 |   |
| Diluted                                                                                                                          |   |        | 48,619,165    |   |   |   | 46,850,809 |   |

----

| OXIS International, Inc. and SubsidiariesConsolidated Statement of Stockholders’ Equity (Deficit)Years Ended December 31, 2009 and 2008 |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                  |            |    |         |   |               |   |        |       |    |   |    |   |
|-----------------------------------------------------------------------|-----------------|---------|--------------|--------|--------------------|--------|-------------|------------|---------|--------|---------|--------|
|                                                                  |            |    |         |   |               |   |        |       |    |   |    |   |
|                                                                  | Preferred Stock |    | Common Stock |   | Additional Paid-in |   | Accumulated |       |
|                                                                  | Shares          |    | Amount       |   | Shares             |   | Amount      |       | Capital |   | Deficit |   |
| Balance, December 31, 2007                                            |            | 96,230  |         | $      | 1,000              |   |        | 46,850,809 |    | $      | 47,000  |   | $ | 70,980,000 |   | $ | (69,848,000 | ) |
| Issuance of preferred series G                                        |            | 25,000  |         |   |               |   |        |       |    |   |    |   |   | 19,000 |   |   |   |   |
| Stock compensation expense for options issued to non-employees        |            |    |         |   |               |   |        |       |    |   |    |   |   | 77,000 |   |   |   |   |
| Stock compensation expense for  options issued to employees |            |    |         |   |               |   |        |       |    |   |    |   |   | 50,000 |   |   |   |   |
| Net loss                                                              |            |    |         |   |               |   |        |       |    |   |    |   |   |   |   |   | (5,006,000 | )  |
| Balance, December 31, 2008                                            |            | 121,230 |         |   | 1,000              |   |        | 46,850,809 |    |   | 47,000  |   |   | 71,126,000 |   |   | (74,854,000 | ) |
|                                                                  |            |    |         |   |               |   |        |       |    |   |    |   |   |   |   |   |   |   |
| Issuance of common  stock                                   |            |    |         |   |               |   |        | 20,190,000 |    |   | 20,000  |   |   | 182,000 |   |   |   |   |
| Net loss                                                              |            |    |         |   |               |   |        |       |    |   |    |   |   |   |   |   | (2,246,000 | ) |
| Balance, December 31, 2009                                            |            | 121,230 |         | $      | 1,000              |   |        | 67,040,809 |    | $      | 67,000  |   | $ | 71,308,000 |   | $ | (77,100,000 | ) |

----

| OXIS INTERNATIONAL, INC. AND SUBSIDIARIESConsolidated Statements of Cash FlowsFor the Years Ended December 31, 2009 and 2008  |
|------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                    |   |   |       |
|---------------------------------------------------------------------------------------------------------|--------|--------|------------|
|                                                                                                    |   | 2009   |       |   | 2008 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                                   |   |   |       |   |   |   |
| Net loss                                                                                                |   | $      | (2,246,000 | ) |   | $ | (5,006,000 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities:Loss on disposition of asset |   |   |       |   |   |   | 2,978,000 |   |
| Depreciation of property, plant and equipment                                                           |   |   |       |   |   |   | 45,000 |   |
| Amortization of intangible assets                                                                       |   |   | 55,000     |   |   |   | 206,000 |   |
| Impairment of patents                                                                                   |   |   | 169,000    |   |   |   | — |   |
| Stock compensation expense for options and warrants issued to employees and non-employees          |   |   |       |   |   |   | 146,000 |   |
| Amortization of debt discounts                                                                          |   |   | 679,000    |   |   |   | 552,000 |   |
| Change in value of warrant and derivative liabilities                                                   |   |   | 26,000     |   |   |   | (159,000 | ) |
| Default costs on convertible debt                                                                       |   |   |       |   |   |   | 508,000 |   |
| Changes in operating assets and liabilities:                                                            |   |   |       |   |   |   |   |   |
| Accounts receivable                                                                                     |   |   |       |   |   |   | 145,000 |   |
| Inventory                                                                                               |   |   | 3,000      |   |   |   | 255,000 |   |
| Prepaid expense and other current assets                                                                |   |   |       |   |   |   | 119,000 |   |
| Net assets held for sale                                                                                |   |   |       |   |   |   | (334,000 | ) |
| Accounts payable                                                                                        |   |   | 5,000      |   |   |   | 252,000 |   |
| Accrued expenses                                                                                        |   |   | 372,000    |   |   |   | 124,000 |   |
| Net cash flows from operating activities                                                                |   |   | (937,000   | ) |   |   | (169,000 | ) |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                                   |   |   |       |   |   |   |   |   |
| Proceeds from convertible notes payable                                                                 |   |   | 2,233,000  |   |   |   |   |   |
| Repayment of demand notes payable                                                                       |   |   | (25,000    | )  |   |   | — |   |
| Net cash flows from financing activities                                                                |   |   | 2,208,000  |   |   |   | — |   |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                    |   |   | 1,271,000  |   |   |   | (169,000 | ) |
| CASH AND CASH EQUIVALENTS - Beginning of period                                                         |   |   | 22,000     |   |   |   | 191,000 |   |
| CASH AND CASH EQUIVALENTS - End of period                                                               |   | $      | 1,293,000  |   |   | $ | 22,000 |   |

----

----

----

----

|   | · | 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 two liabilities arising from the issuance of a convertible debenture in 2006 and in accordance with EITF 00-19: a warrant liability for detachable warrants, as well as an accrued derivative liability for the beneficial conversion feature. These liabilities are remeasured on a quarterly basis. 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            |   |    |      |   |    |   |      |    |   |
| Cash equivalents  |   | $       | 1,293,000 |   |    | $      | -         |    |   | $ | - |   |
| Liabilities       |   |    |      |   |    |   |      |    |   |   |   |   |
| Warrant liability |   |    | -         |   |    | $      | 2,405,000 |    |   |   | - |   |

----

----

|            |   | December 31, |    |
|-----------------|--------|--------------|---------|
|            |   | 2009         |    |   | 2008 |   |
| Raw materials   |   | $            | — |   |   | $ | — |   |
| Work in process |   |         |    |   |   |   | — |   |
| Finished goods  |   |         | — |   |   |   | 3,000 |   |
|            |   | $            | — |   |   | $ | 3,000 |   |

| 3. | Note Receivable |
|----|-----------------|

| 4. | Patents |
|----|---------|

|                     | December 31, |   |
|--------------------------|--------------|--------|
|                     | 2009         |   | 2008 |   |
| Capitalized patent costs |         | $      | 655,000 |   |   | $ | 1,110,000 |   |
| Accumulated amortization |         |   | (571,000 | ) |   |   | (802,000 | ) |
|                     |         | $      | 84,000 |   |   | $ | 308,000 |   |

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| 2011 |   | $  | 29,000 |   |
|------|--------|---------|--------|--------|
| 2012 |   |    | 24,000 |   |
| 2013 |   |    | 11,000 |   |
| 2014 |   |    | 4,000  |   |
| 2015 |   |    | 4,000  |   |

| 5. | Goodwill and Other Assets |
|----|---------------------------|

|                  |   | December 31, |    |
|-----------------------|--------|--------------|---------|
|                  |   | 2009         |    |   | 2008 |   |
| Goodwill              |   | $            | — |   |   | $ | — |   |
| Strategic investments |   |         | — |   |   |   | — |   |
| Lease deposits        |   |         | — |   |   |   | — |   |
|                  |   | $            | — |   |   | $ | — |   |

| 6. | Debt |
|----|------|

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| ·   | 0% Convertible Debentures in the principal amount of $2,000,000 due 24 months from the date of issuance (the “Debentures”), convertible into shares of the Company’s common stock at a per share conversion price equal to $0.05 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 investor (the “Class A Warrants” ) resulting in the issuance of Class A Warrants to purchase 20,000,000 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 investor (the “Class B Warrants”) resulting in the issuance of Class B Warrants to purchase 20,000,000 shares of common stock of the Company. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 7. | Stockholders' Equity   |
|----|-----------------------------|

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|                                |   | Number of Warrants |       |   | Weighted Average Exercise Price |   |
|-------------------------------------|--------|--------------------|------------|--------|---------------------------------|--------|
| Outstanding, December 31, 2007 |   |               | 31,562,895 |   |                            | $      | 0.54 |   |
| Granted                             |   |               | 3,379,121  |   |                            |   | .011 |   |
| Exercised                           |   |               | —    |   |                            |   | — |   |
| Expired                             |   |               | (9,681,42  | )      |                            |   | 0.35 |   |
| Outstanding, December 31, 2008 |   |               | 25,260,587 |   |                            | $      | 0.55 |   |
| Granted                             |   |               | 69,241,500 |   |                            |   | 0.04 |   |
| Exercised                           |   |               | —    |   |                            |   | — |   |
| Expired                             |   |               | (1,245,969 | )      |                            |   | 0.86 |   |
| Outstanding, December 31, 2009      |   |               | 93,256,118 |   |                            | $      | 0.17 |   |
|                                |   |               |       |   |                            |   |   |   |
| Exercisable warrants:          |   |               |       |   |                            |   |   |   |
| December 31, 2008              |   |               | 25,088,712 |   |                            | $      | 0.56 |   |
| December 31, 2009                   |   |               | 93,256,118 |   |                            |   | 0.17 |   |

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|                                |   | Number of Options |       |   | Weighted Average Exercise Price |   |
|-------------------------------------|--------|-------------------|------------|--------|---------------------------------|--------|
| Outstanding, December 31, 2007 |   |              | 5,280,272  |   |                            | $      | 0.32 |   |
| Granted                             |   |              | 1,025,217  |   |                            |   | 0.385 |   |
| Exercised                           |   |              | —    |   |                            |   | — |   |
| Expired                             |   |              | (778,235   | )      |                            |   | 0.377 |   |
| Outstanding, December 31, 2008 |   |              | 5,527,254  |   |                            | $      | 0.33 |   |
| Granted                             |   |              | —    |   |                            |   | — |   |
| Exercised                           |   |              | —    |   |                            |   | — |   |
| Expired                             |   |              | (1,172,222 | )      |                            |   | 0.329 |   |
| Outstanding, December 31, 2009 |   |              | 4,355,032  |   |                            | $      | 0.33 |   |
|                                |   |              |       |   |                            |   |   |   |
| Exercisable options:           |   |              |       |   |                            |   |   |   |
| December 31, 2008              |   |              | 5,367,254  |   |                            | $      | 0.33 |   |
| December 31, 2009                   |   |              | 4,355,032  |   |                            | $      | 0.33 |   |

|                    |   | Outstanding Options |      | Exercisable Options                         |   |
|-------------------------|--------|---------------------|-----------|---------------------------------------------|--------|
| Range ofExercise Prices |   | Number ofOptions    |      | Weighted-Average Remaining Contractual Life |   | Weighted-AverageExercise Price |   | Number ofOptions |   | Weighted-AverageExercise Price |   |
| $0.10 to $0.15          |   |                | 8,000     |                                        |   | 6.06 |   |   | $0.12 |   |   | 8,000 |   |   | $0.12 |   |
| $0.20 to $0.42          |   |                | 4,207,587 |                                        |   | 3.64 |   |   | $0.31 |   |   | 4,207,587 |   |   | $0.31 |   |
| $0.53 to $0.88          |   |                | 98,195    |                                        |   | 3.32 |   |   | $0.66 |   |   | 98,195 |   |   | $0.66 |   |
| $1.38 to $1.92          |   |                | 41,250    |                                        |   | 0.26 |   |   | $1.72 |   |   | 41,250 |   |   | $1.72 |   |
|                    |   |                | 4,355,032 |                                        |   |   |   |   |   |   |   | 4,355,032 |   |   |   |   |

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| 8. | Income Taxes |
|----|--------------|

|                                                                                                       |   | December 31, |        |
|------------------------------------------------------------------------------------------------------------|--------|--------------|-------------|
|                                                                                                       |   | 2009         |        |   | 2008 |   |
| Deferred tax assets:                                                                                       |   |         |        |   |   |   |
| Federal net operating loss carryforward                                                                    |   | $            | 9,377,000   |   |   | $ | 8,929,000 |   |
| Temporary deferred tax asset caused by capitalized research and development expenses                       |   |         | —     |   |   |   | — |   |
| Federal R&D tax credit carryforward                                                                    |   |         |        |   |   |   | 235,000 |   |
| State net operating loss carryforward and capitalized research and development expenses                    |   |         | 2,493,000   |   |   |   | 2,363,000 |   |
| Other                                                                                                      |   |         | 1,133,000   |   |   |   | — |   |
| Deferred tax liabilities - book basis in excess and of noncurrent assets acquired in purchase transactions |   |         | (177,000    | ) |   |   | — |   |
| Deferred tax assets before valuation                                                                       |   |         | 12,281,000  |   |   |   | 11,527,000 |   |
| Valuation allowance                                                                                        |   |         | (12,281,000 | ) |   |   | (11,527,000 | ) |
| Net deferred income tax assets                                                                             |   | $            | —     |   |   | $ | — |   |

| 9. | Geographical Reporting |
|----|------------------------|

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|            |   | Year Ended December 31, |   |
|-----------------|--------|-------------------------|--------|
|            |   | 2009                    |   |   | 2008 |   |
| North America   |   | $                       | 48,000 |   |   | $ | 1,235,000 |   |
| EMEA            |   |                    |   |   |   |   | 1,033,000 |   |
| Latin America   |   |                    |   |   |   |   | 339,000 |   |
| Asia Pacific    |   |                    |   |   |   |   | 766,000 |   |
| Other Countries |   |                    |   |   |   |   | 97,000 |   |
|            |   |                    |   |   |   |   |   |   |
| Total           |   | $                       | 48,000 |   |   | $ | 3,470,000 |   |

| 10. | Related Party Transactions |
|-----|----------------------------|

| 11. | Subsequent Events |
|-----|-------------------|

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| · | 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. |

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