-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FbmvO8gXpbnHw9mUdW8NW8JuqohoeeFwE4RMmaPAOU2QC8wMGvEYdahe3V8py602 PVlrwU2nh4HMit0HQJ1LTw== 0000905718-06-000254.txt : 20060720 0000905718-06-000254.hdr.sgml : 20060720 20060720103533 ACCESSION NUMBER: 0000905718-06-000254 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20060720 DATE AS OF CHANGE: 20060720 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AEOLUS PHARMACEUTICALS, INC. CENTRAL INDEX KEY: 0001261734 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 561953785 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-79369 FILM NUMBER: 06970808 BUSINESS ADDRESS: STREET 1: 23811 INVERNESS PLACE CITY: LAGUNA NIGUEL STATE: CA ZIP: 92677 BUSINESS PHONE: 9494819825 MAIL ADDRESS: STREET 1: 23811 INVERNESS PLACE CITY: LAGUNA NIGUEL STATE: CA ZIP: 92677 FORMER COMPANY: FORMER CONFORMED NAME: INCARA PHARMACEUTICALS CORP DATE OF NAME CHANGE: 20031205 FORMER COMPANY: FORMER CONFORMED NAME: INCARA INC DATE OF NAME CHANGE: 20030828 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: XMARK ASSET MANAGEMENT LLC CENTRAL INDEX KEY: 0001118481 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: CARNEGIE HALL TOWER STREET 2: 152 W 57TH ST 21ST FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2122478200 MAIL ADDRESS: STREET 1: CARNEGIE HALL TOWER STREET 2: 152 W 57TH ST 21ST FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 FORMER COMPANY: FORMER CONFORMED NAME: BROWN SIMPSON ASSET MANAGEMENT LLC DATE OF NAME CHANGE: 20000707 SC 13D/A 1 aeolus13dam7.txt SC13DAM7 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 7)* AEOLUS PHARMACEUTICALS, INC. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $0.01 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 45325S-10-1 - -------------------------------------------------------------------------------- (CUSIP Number) with a copy to: Mitchell D. Kaye Peter D. Greene, Esq. Xmark Asset Management, LLC Lowenstein Sandler PC 301 Tresser Boulevard, Suite 1320 1251 Avenue of the Americas Stamford, CT 06901 New York, NY 10020 (203) 653-2500 (973) 262-6700 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) June 5, 2006 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule l3G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Cusip No. 45325S-10-1 - -------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only): Xmark Asset Management, LLC 13-3954392 - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions): (a) (b) X - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions): WC - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): Not Applicable - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization: New York, United States - -------------------------------------------------------------------------------- Number of 7. Sole Voting Power: 9,365,311* ------------------------------------------- Shares Beneficially 8. Shared Voting Power: * ------------------------------------------- Owned by Each Reporting 9. Sole Dispositive Power: 8,365,311* ------------------------------------------ Person With 10. Shared Dispositive Power: * ------------------------------------------ - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 9,365,311* - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): Not Applicable - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11): 32.1%* - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions): IA - -------------------------------------------------------------------------------- * This is a joint filing by Xmark Asset Management, LLC, a New York limited liability company ("XAM"), and Xmark Opportunity Partners, LLC, a Delaware limited liability company ("Opportunity Partners" and together with XAM the "Reporting Persons"). Mitchell D. Kaye, the Chief Executive Officer of XAM, exercises sole voting and investment power with respect to all securities beneficially owned by XAM, and Mr. Kaye and David C. Cavalier, the Chief Executive Officer and Chief Operating Officer, respectively, of Opportunity Partners, share voting and investment power with respect to all securities beneficially owned by Opportunity Partners. As of June 5, 2006, Xmark Fund, L.P., a Delaware limited partnership ("Xmark LP"), held 143,354 shares of common stock, par value $0.01 per share ("Common Stock"), of Aeolus Pharmaceuticals, Inc., a Delaware corporation, formerly known as Incara Pharmaceuticals Corporation (the "Company"). As of June 5, 2006, Xmark Fund, Ltd., a Cayman Islands exempted company ("Xmark Ltd"), held 114,898 shares of Common Stock of the Company. XAM is the investment manager of Xmark LP and Xmark Ltd and, as such, possesses sole power to vote and direct the disposition of all securities of the Company held by Xmark LP and Xmark Ltd. As of June 5, 2006, Goodnow Capital, L.L.C., a Delaware limited liability company ("Goodnow"), held 8,107,059 shares of Common Stock of the Company. XAM is the sole manager of Goodnow and, as such, possesses sole power to vote and direct the disposition of all securities of the Company held by Goodnow. As of June 5, 2006, Biomedical Value Fund, L.P., a Delaware limited partnership, and Biomedical Offshore Value Fund, Ltd., a Cayman Islands exempted company (together the "Biomedical Value Funds"), held 1,000,000 shares of Common Stock of the Company (the "Biomedical Shares") that are subject to a Voting Trust Agreement, dated April 19, 2004, by and among (i) the Biomedical Value Funds, (ii) XAM and (iii) the Company. Pursuant to the Voting Trust Agreement, XAM is the Voting Trustee and, as such, possesses sole power to vote the Biomedical Shares. While XAM may be deemed to be the beneficial owner of the Biomedical Shares pursuant to its power to vote the Biomedical Shares, XAM does not own, and expressly disclaims any pecuniary interest in, the Biomedical Shares. XAM does not exercise any investment authority with respect to the Biomedical Shares. The Biomedical Value Funds, in their capacity as the holders of voting and/or investment authority of more than 5% of the Common Stock of the Company, separately and/or in the aggregate, pursuant to Reg. 13d-3 (jointly, together with certain other reporting persons) file statements separately from the Reporting Persons pursuant to Section 13 of the Securities Exchange Act of 1934, as amended. As a result of the foregoing, for purposes of Reg. Section 240.13d-3, XAM is deemed to beneficially own 9,365,311 shares of Common Stock of the Company as of June 5, 2006, or 32.1% of the shares of Common Stock of the Company deemed issued and outstanding as of such date. Cusip No. 45325S-10-1 - -------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only): Xmark Opportunity Partners, LLC 20-2052197 - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions): (a) (b) X - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions): WC - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): Not Applicable - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization: Delaware, United States - -------------------------------------------------------------------------------- Number of 7. Sole Voting Power: 6,505,388* ------------------------------------------- Shares Beneficially 8. Shared Voting Power: * ------------------------------------------- Owned by Each Reporting 9. Sole Dispositive Power: 6,505,388* ------------------------------------------ Person With 10. Shared Dispositive Power: * ------------------------------------------ - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 6,505,388* - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): Not Applicable - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11): 18.2%* - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions): IA - -------------------------------------------------------------------------------- * This is a joint filing by Xmark Asset Management, LLC, a New York limited liability company ("XAM"), and Xmark Opportunity Partners, LLC, a Delaware limited liability company ("Opportunity Partners" and together with XAM the "Reporting Persons"). Mitchell D. Kaye, the Chief Executive Officer of XAM, exercises sole voting and investment power with respect to all securities beneficially owned by XAM, and Mr. Kaye and David C. Cavalier, the Chief Executive Officer and Chief Operating Officer, respectively, of Opportunity Partners, share voting and investment power with respect to all securities beneficially owned by Opportunity Partners. As of June 5, 2006, Xmark Opportunity Fund, L.P., a Delaware limited partnership ("Opportunity LP"), held 14,322 shares of common stock, par value $0.01 per share ("Common Stock"), of Aeolus Pharmaceuticals, Inc., a Delaware corporation, formerly known as Incara Pharmaceuticals Corporation (the "Company"). As of June 5, 2006, Xmark Opportunity Fund, Ltd., a Cayman Islands exempted company ("Opportunity Ltd"), held 21,482 shares of Common Stock of the Company. As of June 5, 2006, Xmark JV Investment Partners, LLC, a Delaware limited liability company ("JV Partners"), held 10,850 shares of Common Stock of the Company. As of June 5, 2006, Opportunity LP held 330,000 shares of Series A Convertible Preferred Stock (the "Series A Preferred") of the Company, which are convertible into 1,320,000 shares of Common Stock of the Company at a conversion price of $0.50 per share. As of June 5, 2006, Opportunity Ltd held 495,000 shares of Series A Preferred, which are convertible into 1,980,000 shares of Common Stock of the Company at a conversion price of $0.50 per share. As of June 5, 2006, JV Partners held 250,000 shares of Series A Preferred, which are convertible into 1,000,000 shares of Common Stock of the Company at a conversion price of $0.50 per share. As of June 5, 2006, Opportunity LP held warrants to purchase 660,000 shares of Common Stock of the Company at an exercise price of $0.50 per share. As of June 5, 2006, Opportunity Ltd held warrants to purchase 990,000 shares of Common Stock of the Company at an exercise price of $0.50 per share. As of June 5, 2006, JV Partners held warrants to purchase 500,000 shares of Common Stock of the Company at an exercise price of $0.50 per share. All of the warrants held by Opportunity LP, Opportunity Ltd and JV Partners are exercisable within 60 days of the date of event which required the filing of this Amendment No. 7 to Schedule 13D. Opportunity Partners is the sole member of the investment manager of Opportunity LP and Opportunity Ltd and, as such, possesses sole power to vote and direct the disposition of all securities of the Company held by Opportunity LP and Opportunity Ltd. Opportunity Partners is the investment manager of JV Partners and, as such, possesses sole power to vote and direct the disposition of all securities of the Company held by JV Partners. As a result of the foregoing, for purposes of Reg. Section 240.13d-3, Opportunity Partners is deemed to beneficially own 6,505,388 shares of Common Stock of the Company as of June 5, 2005, or 18.2% of the shares of Common Stock of the Company deemed issued and outstanding as of such date. THIS AMENDMENT NO. 7 TO SCHEDULE 13D IS BEING FILED JOINTLY BY XMARK ASSET MANAGEMENT, LLC, A NEW YORK LIMITED LIABILITY COMPANY ("XAM"), AND XMARK OPPORTUNITY PARTNERS, LLC, A DELAWARE LIMITED LIABILITY COMPANY ("OPPORTUNITY PARTNERS", AND TOGETHER WITH XAM, THE "REPORTING PERSONS"), PURSUANT TO RULE 13d-1(k) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"). THIS STATEMENT CONSTITUTES AMENDMENT NO. 7 TO THE SCHEDULE 13D, AS PREVIOUSLY AMENDED, FILED JOINTLY BY THE REPORTING PERSONS ON JANUARY 31, 2006. NEITHER THE FILING OF THIS SCHEDULE 13D, AS AMENDED, NOR ANY OF ITS CONTENTS SHALL BE DEEMED TO CONSTITUTE AN ADMISSION BY THE REPORTING PERSONS OR ANY OTHER PERSON THAT IT IS THE BENEFICIAL OWNER OF THE SECURITIES OF THE COMPANY BENEFICIALLY OWNED BY ANY OTHER PERSON (INCLUDING THE OTHER REPORTING PERSON) FOR PURPOSES OF SECTION 13(d) OF THE EXCHANGE ACT OR FOR ANY OTHER PURPOSE, AND SUCH BENEFICIAL OWNERSHIP IS EXPRESSLY DISCLAIMED. Item 3. Source and Amount of Funds or Other Consideration. ------------------------------------------------- Item 3 of the Schedule 13D is hereby further amended by adding the following at the end thereof: According to the terms of the Certificate of Designations, Preferences and Rights of the Series A Convertible Preferred Stock (the "Series A Preferred"), on each of January 1, 2006 and April 1, 2006, the Company paid certain dividends on the shares of Series A Preferred Stock, which were paid in shares of Common Stock of the Company. As a result of these dividends, Opportunity LP received, in the aggregate, 17,003 shares of Common Stock of the Company, Opportunity Ltd received, in the aggregate, 25,504 shares of Common Stock of the Company and JV Partners received, in the aggregate, 12,881 shares of Common Stock of the Company. On June 5, 2006, the Company entered into a private placement of shares of Common Stock of the Company and warrants to purchase shares of Common Stock of the Company. Pursuant to the terms of the Certificate of Designations, Preferences and Rights of the Series A Preferred, the conversion price of the Series A Preferred automatically was decreased from $1.00 to $0.50 per share, effective as of June 5, 2006. As a result, as of June 5, 2006, the 330,000 shares of Series A Preferred held by Opportunity LP were convertible into 1,320,000 shares of Common Stock of the Company at a conversion price of $0.50 per share. In addition, as of June 5, 2006, the 495,000 shares of Series A Preferred held by Opportunity Ltd were convertible into 1,980,000 shares of Common Stock of the Company at a conversion price of $0.50 per share and the 250,000 shares of Series A Preferred held by JV Partners were convertible into 1,000,000 shares of Common Stock of the Company at a conversion price of $0.50 per share. The shares of Series A Preferred were immediately convertible as of June 5, 2006. As a result of the Company's private placement of shares of Common Stock of the Company and warrants to purchase shares of Common Stock of the Company on June 5, 2006, pursuant to the terms of the warrants held by each of Opportunity LP, Opportunity Ltd and JV Partners, the exercise price of such warrants automatically was decreased from $1.00 to $0.50, effective as of June 5, 2006. The warrants held by Opportunity LP, Opportunity Ltd and JV Partners were exercisable immediately as of June 5, 2006 and expire on November 21, 2015 (i.e., 10 years from the date of purchase). Item 4. Purpose of Transaction. ---------------------- Item 4 of the Schedule 13D is hereby further amended by deleting such item in its entirety and substituting the following in lieu thereof: Each of the Reporting Persons intends to separately evaluate the performance of the shares of Common Stock of the Company as an investment. Each of the Reporting Persons pursues an investment objective that seeks capital appreciation. In pursuing this investment objective, each Reporting Person separately analyzes the operations, capital structure and markets of companies in which such Reporting Person's clients invest, including the Company, on a continuous basis through, among other things, analysis of documentation and discussions with knowledgeable industry and market observers and with representatives of such companies. Each Reporting Person intends to continuously assess the Company's business, financial condition, results of operations and prospects, general economic conditions, the securities markets in general and those for the shares of Common Stock of the Company in particular, other developments and other investment opportunities. Depending on such assessments, each Reporting Person may acquire additional securities of the Company or may determine to sell or otherwise dispose of all or some of the securities of the Company presently held by Xmark LP, Xmark Ltd, Goodnow, Opportunity LP, Opportunity Ltd and/or JV Partners, as applicable, in the open market or in private transactions. Such actions will depend upon a variety of factors, including, without limitation, current and anticipated future trading prices for the shares of Common Stock of the Company, the financial condition, results of operations and prospects of the Company, alternative investment opportunities, general economic, financial market and industry conditions and other factors that each Reporting Person may deem material to its investment decision. David C. Cavalier, the Chief Operating Officer of Opportunity Partners, is currently a director and Chairman of the Board of the Company. In addition, the Reporting Persons in the aggregate, through one or more intermediate entities, possess the power to vote and direct the disposition of more than fifty percent of the outstanding shares (and the shares deemed outstanding for purposes of Reg. Section 240.13d-3) of Common Stock of the Company. As such, the Reporting Persons can control the outcome of matters that may be submitted to the vote of the Company's stockholders at annual or special meetings of stockholders. The Reporting Persons also can initiate, through the calling of a special meeting of stockholders or through action by written consent in lieu of a stockholders' meeting, corporate actions that are subject to the vote of the Company's stockholders. Such corporate actions may include, without limitation, the approval of each of the types of events described in clauses (a) through (j) under Item 4 of Schedule 13D. Except as otherwise described herein, the Reporting Persons, separately or together, do not presently have any plans or proposals which relate to, or would result in the types of events described in, clauses (a) through (j) under Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer. ------------------------------------ Item 5 of the Schedule 13D is hereby further amended by deleting such item in its entirety and substituting the following in lieu thereof: As of June 5, 2006, Xmark LP held 143,354 shares of Common Stock of the Company. As of June 5, 2006, Xmark Ltd held 114,898 shares of Common Stock of the Company. XAM is the investment manager of Xmark LP and Xmark Ltd and, as such, possesses sole power to vote and direct the disposition of all securities of the Company held by Xmark LP and Xmark Ltd. As of June 5, 2006, Goodnow held 8,107,059 shares of Common Stock of the Company. XAM is the sole manager of Goodnow and, as such, possesses sole power to vote and direct the disposition of all securities of the Company held by Goodnow. As of June 5, 2006, Biomedical Value Fund, L.P., a Delaware limited partnership, and Biomedical Offshore Value Fund, Ltd., a Cayman Islands exempted company (together the "Biomedical Value Funds"), held 1,000,000 shares of Common Stock of the Company (the "Biomedical Shares") that are subject to a Voting Trust Agreement, dated April 19, 2004, by and among (i) the Biomedical Value Funds, (ii) XAM and (iii) the Company. Pursuant to the Voting Trust Agreement, XAM is the Voting Trustee and, as such, possesses sole power to vote the Biomedical Shares. While XAM may be deemed to be the beneficial owner of the Biomedical Shares pursuant to its power to vote the Biomedical Shares, XAM does not own, and expressly disclaims any pecuniary interest in, the Biomedical Shares. XAM does not exercise any investment authority with respect to the Biomedical Shares. The Biomedical Value Funds, in their capacity as the holders of voting and/or investment authority of more than 5% of the Common Stock of the Company, separately and/or in the aggregate, pursuant to Reg. 13d-3 (jointly, together with certain other reporting persons) file statements separately from the Reporting Persons pursuant to Section 13 of the Securities Exchange Act of 1934, as amended. On June 5, 2006, Opportunity LP held 17,003 shares of Common Stock of the Company, Opportunity Ltd held 25,504 shares of Common Stock of the Company and JV Partners held 12,881 shares of Common Stock of the Company. As of June 5, 2006, Opportunity LP held 330,000 shares of Series A Preferred, which are convertible into 1,320,000 shares of Common Stock of the Company at a conversion price of $0.50 per share. As of June 5, 2006, Opportunity Ltd held 495,000 shares of Series A Preferred, which are convertible into 1,980,000 shares of Common Stock of the Company. As of June 5, 2006, JV Partners held 250,000 shares of Series A Preferred, which are convertible into 1,000,000 shares of Common Stock of the Company at a conversion price of $0.50 per share. The shares of Series A Preferred were immediately convertible as of June 5, 2006. As of June 5, 2006, Opportunity LP held warrants to purchase 660,000 shares of Common Stock of the Company at a conversion price of $0.50 per share. As of June 5, 2006, Opportunity Ltd held warrants to purchase 990,000 shares of Common Stock of the Company at a conversion price of $0.50 per share. As of June 5, 2006, JV Partners held warrants to purchase 500,000 shares of Common Stock of the Company at an exercise price of $0.50 per share. All of the warrants held by Opportunity LP, Opportunity Ltd and JV Partners are exercisable within 60 days of the date of event which required the filing of this Amendment No. 7 to Schedule 13D. Opportunity Partners is the sole member of the investment manager of Opportunity LP and Opportunity Ltd and, as such, possesses sole power to vote and direct the disposition of all securities of the Company held by Opportunity LP and Opportunity Ltd. Opportunity Partners is the investment manager of JV Partners and, as such, possesses sole power to vote and direct the disposition of all securities of the Company held by JV Partners. Based upon information provided by the Company, as of June 5, 2006, there were 29,223,583 shares of Common Stock of the Company issued and outstanding. As a result of the foregoing, for purposes of Reg. Section 240.13d-3, XAM is deemed to beneficially own 9,365,311 shares of Common Stock of the Company as of June 5, 2006, or 32.1% of the shares of Common Stock of the Company deemed issued and outstanding as of such date, and Opportunity Partners is deemed to beneficially own 6,505,388 shares of Common Stock of the Company as of June 5, 2006, or 18.2% of the shares of Common Stock of the Company deemed issued and outstanding as of such date. Except as described in Item 3 of this statement on Schedule 13D, as amended, during the 60 days prior to and including June 5, 2006, there were no purchases or sales of Common Stock of the Company, or securities convertible into, exercisable for or exchangeable for Common Stock of the Company, by the Reporting Persons, or any person or entity controlled by the Reporting Persons or any person or entity for which the Reporting Persons possess voting or investment control over the securities thereof. In addition, except as described in this Schedule 13D, as amended, to the knowledge of the Reporting Persons, no other securities of the Company are owned, beneficially or otherwise, by any other person named in Item 2 of this Schedule 13D, as amended. Except as described in this Schedule 13D, as amended, to the knowledge of the Reporting Persons, no other person named in Item 2 has effected any transactions in shares of Common Stock of the Company, or securities convertible into, exercisable for or exchangeable for shares of Common Stock of the Company, during the 60 days on or prior to June 5, 2006. Neither the filing of this Schedule 13D, as amended, nor any of its contents shall be deemed to constitute an admission by the Reporting Persons or any other person that it is the beneficial owner of the securities of the Company beneficially owned by any other person (including the other Reporting Person) for purposes of Section 13(d) of the Exchange Act or for any other purpose, and such beneficial ownership is expressly disclaimed. Item 7. Material to be Filed as Exhibits. -------------------------------- Item 7 of the Schedule 13D is hereby further amended by adding the following at the end thereof: A. Joint filing agreement, dated as of July 18, 2006, by and among Xmark Asset Management, LLC and Xmark Opportunity Partners, LLC. Signature --------- After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. July 18, 2006 XMARK ASSET MANAGEMENT, LLC /s/ Mitchell D. Kaye ------------------------------------------ Name: Mitchell D. Kaye Title: Chief Executive Officer July 18, 2006 XMARK OPPORTUNITY PARTNERS, LLC /s/ Mitchell D. Kaye ------------------------------------------ Name: Mitchell D. Kaye Title: Chief Executive Officer Attention: Intentional misstatements or omissions of fact constitute Federal criminal violations (See 18 U.S.C. 1001). Exhibit A --------- JOINT FILING AGREEMENT ---------------------- The undersigned agree that this Schedule 13D Amendment No. 7 relating to the shares of common stock of Aeolus Pharmaceuticals, Inc. is filed jointly on behalf of each of the undersigned pursuant to Rule 13d-1(k). Dated: July 18, 2006 XMARK ASSET MANAGEMENT, LLC By:/s/ Mitchell D. Kaye --------------------------------- Name: Mitchell D. Kaye Title: Chief Executive Officer XMARK OPPORTUNITY PARTNERS, LLC By:/s/ Mitchell D. Kaye --------------------------------- Name: Mitchell D. Kaye Title: Chief Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----