Oxygen Biotherapeutics Reports Second Quarter FY2013 Financial Results

  Oxygen Biotherapeutics Reports Second Quarter FY2013 Financial Results

 -Management to host teleconference to discuss financial results on December
                                     17-

Business Wire

MORRISVILLE, N.C. -- December 17, 2012

Oxygen Biotherapeutics, Inc. (NASDAQ: OXBT), a development stage biomedical
company focused on developing oxygen-rich intravenous and topical products,
today announced results for the three and six months ended October 31, 2012.
Oxygen’s management will host a live teleconference on Monday, December 17,
2012 at 11 a.m. EST to discuss the results. (See access details below.)

Highlights (through Dec. 14, 2012)

  *We completed one study that showed that Oxycyte^® had little to no effect
    on platelet activation, aggregation or adhesion when tested in vitro at
    clinically relevant concentrations on normal human blood. We have
    initiated a repeat study using blood from traumatic brain injury patients.
  *Revenue earned under our U.S. Army funded research grant was $509,000 for
    the second quarter of 2013 compared to $78,000 for the three months ended
    October 31, 2011.
  *Initiated four studies to assess the impact of Oxycyte on the overall
    health of the immune system, bacterial opsonization and phagocytic
    activity, innate immunity, and its effect on the primary immune response
    cells of the liver and spleen.
  *Net cash used in operating activities was $1.1 million for the second
    quarter of 2013 compared to $2.5 million for the same period in the prior
    year.
  *Reduced financial loss from operations to $0.7 million for the second
    quarter of 2013 compared to $2.1 million for same period last year.
  *Secured a new Cooperative R&D Agreement with the U.S. Navy to research
    using Oxycyte PFC Emulsion as an intravenous treatment for infected wounds
    and related injuries.
  *Engaged global contract research organization Pharmaceutical Product
    Development (PPD) to manage STOP-TBI Phase IIb trial for Oxycyte PFC
    Emulsion.

Second-Quarter Results

Oxygen Biotherapeutics reported net revenue of $514,872 for the second quarter
of fiscal 2013, compared to $95,159 for the comparable quarter in the previous
fiscal year. The increase was due primarily to direct cost reimbursements for
work performed under our preclinical Oxycyte PFC studies funded by the U.S.
Army, partially offset by a decrease in product sales. The decrease in product
sales was due to a reduction in the size of our internal sales force during
the quarter and termination of existing distribution agreements in the prior
year.

Total operating expenses for the three months ended October 31, 2012 were
$1,197,715 compared to $2,149,387 for the same period in 2011. The reduction
in total operating expenses for the quarter was due primarily to decreases in
marketing and sales and general and administrative expenses of approximately
$80,000, and $1.2 million, respectively, partially offset by an increase of
approximately $120,000 in research and development expense. Additionally,
during the quarter, we recorded approximately $170,000 in restructuring costs
associated with the closure of our California lab facility that were not
incurred during the same period in the prior year.

Marketing and sales expense for the three months ended October 31, 2012 was
$53,293 compared to $134,035 for the same period in the prior year. The
decrease in marketing and sales expense for the quarter was driven primarily
by reductions in compensation costs, direct marketing and advertising costs,
fees paid to a third-party public relations firm and travel and marketing
sample expenses.

General and administrative expense for the three months ended October 31, 2012
were $369,550 compared to $1,526,775 for the same period in 2011. The
reduction in general and administrative expense for the quarter was due
primarily to decreases in compensation costs, legal and professional fees and
facilities costs, partially offset by a slight increase in depreciation and
amortization expenses. Additionally, during the quarter, we reduced our
estimate of potential costs associated with our contingent liability, related
to Section 409A of the Internal Revenue Code, by approximately $530,000.

Research and development expense for the three months ended October 31, 2012
were $604,574 compared to $488,577 for the same period in 2011. The increase
in research and development expense for the period was due primarily to an
increase in costs incurred for preclinical studies and Oxycyte development,
partially offset by decreases in costs incurred for compensation, consulting
fees, lab supplies and facilities costs.

Interest and other expenses for the three months ended October 31, 2012 were
$874,435 compared to $875,695 for the same period in 2011.

For the second quarter ended October 31, 2012, the Company reported a net loss
of $1,557,278, or $0.05 per share, compared to a net loss of $2,929,923, or
$0.12 per share, for the same period in the prior year.

Six-Month Results

Total net revenue for the six months ended October 31, 2012 was $786,968
compared to total revenue of $120,032 for the same period in fiscal year 2012.
The increase was due primarily to direct cost reimbursements for work
performed under our preclinical Oxycyte PFC studies, partially offset by a
decrease in product sales. The decrease in product sales was due to a
reduction in the size of our sales force during the quarter and termination of
existing distribution agreements in the prior year.

Total operating expenses for the six months ended October 31, 2012 were
$3,145,252 compared to $4,602,337 for the same period in 2011. The reduction
in total operating expenses for the period was due primarily to decreases in
marketing and sales and general and administrative expenses of approximately
$271,000 and $1.5 million, respectively, partially offset by an increase of
approximately $100,000 in research and development expense. Additionally,
during the period, we recorded approximately $218,000 in restructuring costs
associated with the closure of our California lab facility that were not
incurred during the same period in the prior year.

Marketing and sales expense for the six months ended October 31, 2012 was
$91,898 compared to $363,368 for the same period in the prior year. The
decrease in marketing and sales expense for the period was driven by
reductions in compensation costs, direct marketing and advertising costs, fees
paid to a third-party public relations firm and travel and marketing sample
expenses.

General and administrative expense for the six months ended October 31, 2012
was $1,593,734 compared to $3,098,431for the same period in 2011. The
reduction in general and administrative expense for the period was due
primarily to decreases in compensation costs, legal and professional fees,
facilities costs and depreciation and amortization expenses. Additionally,
during the period, we reduced our estimate of potential costs associated with
our contingent liability, related to Section 409A of the Internal Revenue
Code, by approximately $530,000.

Research and development expense for the six months ended October 31, 2012 was
$1,241,846 compared to $1,140,538 for the same period in 2011. The increase in
research and development expense for the period was due primarily to an
increase in costs incurred for preclinical studies and Oxycyte development,
partially offset by decreases in costs incurred for compensation, consulting
fees, lab supplies and facilities costs.

Interest and other expenses for the six months ended October 31, 2012 were
$2,785,535 compared to $1,316,687 for the same period in 2011. The increase in
interest and other expenses for the period was due primarily to the non-cash
interest charges for dividends and fair value adjustments on our outstanding
Series A convertible preferred stock that was not incurred in the prior year,
partially offset by the non-cash interest charges for the accretion of the
discount on our notes payable which were not incurred in the current period.

The Company reported a net loss of $5,143,819, or $0.17 per share for the six
month period ended October 31, 2012, compared to a net loss of $5,798,992, or
$0.25 per share for the same period in 2011.

As of October 31, 2012, the Company had cash and cash equivalents totaling
$1,511,513, compared to $1,879,872 at April 30, 2012.

“Focus is one of the most important drivers of success,” said Michael Jebsen,
Chief Financial Officer and Interim Chief Executive Officer, “and that is what
we have strived to do over the last 18 months. Our focus has been on
developing our most advanced product candidate, Oxycyte. We are progressing
towards completion of our preclinical work to assess the impact of Oxycyte on
platelet function, immune response and thrombocytopenia; the results of which
we believe will support our response to the FDA’s existing hold on our NDA. We
believe we are nearing the completion of the preliminary steps necessary to
resume our Phase IIb clinical trials to evaluate the Safety and Tolerability
of Oxycyte in Patients with Traumatic Brain Injury (STOP-TBI) in Israel and
Switzerland. Our company’s focus is reflected in our financial results and we
remain committed to investing a substantial amount of our resources on
development of the programs that will lead us to success and build stockholder
value.”

Conference Call Dial-In, Webcast Information

Management will host a conference call on Monday, December 17, 2012 at 11 a.m.
EST. To access the live teleconference dial (800) 299-9630 (U.S. and Canada)
or (617) 786-2904 (international.) The participant passcode is 40837151. A
live webcast will be available on our web site
http://www.oxybiomed.com/investors.htm.

A replay of the webcast will be available on the Oxygen Biotherapeutics
website, or by phone for a limited time. To access the replay by phone, call
(888) 286-8010 (U.S. and Canada) or (617) 801-6888 (international) for a
limited time. The passcode for the replay is 90794929.

OXYGEN BIOTHERAPEUTICS, INC.
(a development stage enterprise)
BALANCE SHEETS
                                                          
                                       October 31, 2012       April 30, 2012
                                       (Unaudited)            
                                                              
ASSETS
Current assets
Cash and cash equivalents              $ 1,511,513            $ 1,879,872
Accounts receivable                      17,193                 13,385
Government grant receivable              42,306                 35,650
Inventory                                109,357                83,370
Prepaid expenses                         291,359                455,946
Other current assets                    145,195              162,809      
Total current assets                     2,116,923              2,631,032
Property and equipment, net              247,525                293,606
Debt issuance costs, net                 214,351                278,659
Intangible assets, net                   904,498                872,971
Other assets                            58,262               65,666       
Total assets                           $ 3,541,559           $ 4,141,934    
                                                              
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable                       $ 479,300              $ 542,809
Accrued liabilities                      428,817                1,273,837
Convertible preferred stock              429,978                1,247,266
Current portion of notes payable, net   7,195                62,958       
Total current liabilities                1,345,290              3,126,870
Other liabilities                        76,524                 -
Long-term portion of notes payable,     2,177,776            1,361,110    
net
Total liabilities                        3,599,590              4,487,980
                                                              
                                                              
Commitments and contingencies; see
Note 7.
Stockholders' deficit
Preferred stock, undesignated,
authorized 9,992,500 shares; see Note    -                      -
5.
Common stock, par value $.0001 per
share; authorized 400,000,000 shares;
issued                                   3,290                  2,942

and outstanding 32,899,900 and
29,417,718, respectively
Additional paid-in capital               112,710,782            107,279,296
Deficit accumulated during the          (112,772,103 )        (107,628,284 )
development stage
Total stockholders’ deficit             (58,031      )        (346,046     )
Total liabilities and stockholders'    $ 3,541,559           $ 4,141,934    
deficit
                                                                             

OXYGEN BIOTHERAPEUTICS, INC.
(a development stage enterprise)
STATEMENTS OF OPERATIONS
                                                                            
                                                                                      
                     Period from May
                     26,
                                          Three months ended October 31,              Six months ended October 31,
                     1967 (Inception)
                     to
                     October 31,            2012              2011                   2012              2011
                     2012
                     (Unaudited)          (Unaudited)          (Unaudited)            (Unaudited)          (Unaudited)
Product              $ 496,282            $ 14,571             $ 27,415               $ 26,028             $ 86,892
revenue
Cost of sales         324,512            9,134              10,500               15,044             45,104     
Net product            171,770              5,437                16,915                 10,984               41,788
revenue
Government            1,090,499          509,435            78,244               775,984            78,244     
grant revenue
Total net              1,262,269            514,872              95,159                 786,968              120,032
revenue
                                                                                                           
Operating
expenses
Selling,
general, and           48,594,699           422,843              1,660,810              1,685,632            3,461,799
administrative
Research and           23,317,158           604,574              488,577                1,241,846            1,140,538
development
Restructuring          217,774              170,298              -                      217,774              -
expense
Loss on
impairment of         363,691            -                  -                    -                  -          
long-lived
assets
Total
operating              72,493,322           1,197,715            2,149,387              3,145,252            4,602,337
expenses
                                                                                                           
Net operating          71,231,053           682,843              2,054,228              2,358,284            4,482,305
loss
                                                                                                           
Interest               42,516,990           867,524              871,768                2,793,427            1,307,566
expense
Loss on
extinguishment         250,097              -                    -                      -                    -
of debt
Other expense         (1,226,037  )       6,911              3,927                (7,892     )        9,121      
(income)
Net loss             $ 112,772,103       $ 1,557,278         $ 2,929,923           $ 5,143,819         $ 5,798,992  
                                                                                                           
Net loss per                              $ (0.05      )       $ (0.12      )         $ (0.17      )       $ (0.25      )
share, basic
Weighted average number of common           32,074,192           23,805,323             31,161,511           23,604,502
shares outstanding, basic
Net loss per                              $ (0.13      )       $ (0.29      )         $ (0.24      )       $ (0.42      )
share, diluted
Weighted average number of common           34,249,083           25,980,214             33,336,402           25,081,668
shares outstanding, diluted

About Oxygen Biotherapeutics, Inc.

Oxygen Biotherapeutics, Inc. is developing medical and cosmetic products that
efficiently deliver oxygen to tissues in the body. The company has developed a
proprietary perfluorocarbon (PFC) therapeutic oxygen carrier called Oxycyte®
that is currently in clinical and preclinical studies for intravenous delivery
for indications such as traumatic brain injury, decompression sickness and
stroke. The company is also developing PFC-based creams and gels for topical
delivery to the skin for dermatologic conditions and potentially wound care.
In addition, the Company has commercialized its Dermacyte® line of skin care
cosmetics for the anti-aging market.

Caution Regarding Forward-Looking Statements

This news release contains certain forward-looking statements by the company
that involve risks and uncertainties and reflect the company's judgment as of
the date of this release. These statements include the expansion of
development of Oxycyte and the timing of the introduction of this new product.
The forward-looking statements are subject to a number of risks and
uncertainties including matters beyond the company's control that could lead
to delays in new product introductions and customer acceptance of these new
products, and other risks and uncertainties as described in our filings with
the Securities and Exchange Commission, including in the current Form 10-Q
filed on December 14, 2012, and our annual report on Form 10-K filed on July
24, 2012, as well as other filings with the SEC. The company disclaims any
intent or obligation to update these forward-looking statements beyond the
date of this release. This caution is made under the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995.

Contact:

Oxygen Biotherapeutics, Inc.
Ellen Corliss, 919-855-2112
Vice President
Corporate Communications
& Investor Relations
 
Press spacebar to pause and continue. Press esc to stop.