HispanicBusiness

                        AEOLUS PHARMACEUTICALS, INC.                   CONDENSED CONSOLIDATED BALANCE SHEETS                   (In thousands, except per share data)                                                December 31,  September 30,                                                    2012           2012                                               -------------  -------------                                                (Unaudited)                    ASSETSCurrent assets:  Cash and cash equivalents                    $           2  $         281  Accounts receivable                                  1,550            882  Prepaids and other current assets                       54             61                                               -------------  -------------    Total current assets                               1,606          1,224Investment in CPEC LLC                                    32             32                                               -------------  -------------    Total assets                               $       1,638  $       1,256                                               =============  =============     LIABILITIES AND STOCKHOLDERS' DEFICITCurrent liabilities:  Accounts payable and accrued expenses        $       3,064  $       2,272                                               -------------  -------------    Total current liabilities                          3,064          2,272Warrant liability                                     14,809         19,319                                               -------------  -------------    Total liabilities                                 17,873         21,591Commitments and contingencies (Note H)Stockholders' deficit:  Preferred stock, $.01 par value per share,   10,000,000 shares authorized:  Series B nonredeemable convertible preferred   stock, 1,600,000 and 1,600,000 shares   authorized as of December 31, 2012 and   September 30, 2012, respectively; 526,080   and 526,080 shares issued and outstanding   as of December 31, 2012 and September 30,   2012, respectively                                      5              5  Common stock, $.01 par value per share,   200,000,000 shares authorized; 62,731,963   and 62,731,963 shares issued and   outstanding as of December 31, 2012 and   September 30, 2012, respectively                      627            627  Additional paid-in capital                         159,819        159,747  Accumulated deficit                               (176,686)      (180,714)                                               -------------  -------------    Total stockholders' deficit                      (16,235)       (20,335)                                               -------------  -------------    Total liabilities and stockholders'     deficit                                   $       1,638  $       1,256                                               =============  =============                        AEOLUS PHARMACEUTICALS, INC.              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                                (Unaudited)                   (In thousands, except per share data)                                                      Three Months Ended                                                         December 31,                                                   ------------------------                                                       2012         2011                                                   -----------  -----------Revenue:  Contract revenue                                 $     1,342  $     2,215Costs and expenses:  Research and development                               1,169        2,070  General and administrative                               655          856                                                   -----------  -----------    Total costs and expenses                             1,824        2,926                                                   -----------  -----------Loss from operations                                      (482)        (711)Non-cash financing charges and change in fair value of warrants (Notes C and E)                       4,510        3,688Interest income (expense), net                              --           --Other income (expense), net                                 --           --                                                   -----------  -----------Net income (loss)                                  $     4,028  $     2,977                                                   ===========  ===========Net income (loss) per weighted share attributable to common stockholders:  Basic                                            $     2,049  $     1,487                                                   -----------  -----------  Diluted                                          $      (200) $      (415)                                                   ===========  ===========  Basic net income (loss) per common share         $      0.03  $      0.02                                                   -----------  -----------  Diluted net income (loss) per common share       $      0.00  $     (0.01)                                                   ===========  ===========Weighted average common shares outstanding:  Basic                                                 62,732       60,471                                                   -----------  -----------  Diluted                                               65,635       78,690                                                   ===========  ===========                        AEOLUS PHARMACEUTICALS, INC.              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                (Unaudited)                               (In thousands)                                                      Three Months Ended                                                         December 31,                                                   ------------------------                                                       2012         2011                                                   -----------  -----------Cash flows from operating activities:  Net income (loss)                                $     4,028  $     2,977  Adjustments to reconcile net income (loss) to   net cash provided by (used in) operating   activities:    Stock-based compensation                                72          197    Change in fair value of warrants                    (4,510)      (3,688)    Change in assets and liabilities:      Accounts receivable                                 (668)         177      Prepaid and other assets                               7            7      Accounts payable and accrued expenses                792          998                                                   -----------  -----------Net cash provided by (used in) operating activities                                               (279)         668                                                   -----------  -----------Net decrease in cash and cash equivalents                 (279)         668Cash and cash equivalents at beginning of period           281          518                                                   -----------  -----------Cash and cash equivalents at end of period         $         2  $     1,186                                                   ===========  ===========