Oxygen Biotherapeutics Reports Financial Results for the Third Quarter FY2013

  Oxygen Biotherapeutics Reports Financial Results for the Third Quarter
  FY2013

Business Wire

MORRISVILLE, N.C. -- March 18, 2013

Oxygen Biotherapeutics, Inc. (NASDAQ: OXBT), a development stage biomedical
company focused on developing oxygen-carrying intravenous and topical
products, today announced financial results for the three and nine month
periods ending January 31, 2013.

Third Quarter 2013 Financial Snapshot

  *Cash and cash equivalents were $0.8 million at January 31, 2013.
  *Net product sales from Dermacyte^® were $2,900 for the third quarter of
    2013 compared to $4,700 for the three months ended January 31, 2012.
  *Revenue earned under our U.S. Army research grant increased to $221,051
    for the third quarter of 2013 compared to $146,101 for the three months
    ended January 31, 2012.
  *Net loss from operations decreased 16% for the third quarter of 2013 to
    $1.6 million compared to $1.9 million for the three months ended January
    31, 2012.
  *Net cash used for operating activities decreased to $700,000 for the third
    quarter of 2013 compared to $2.3 million for the three months ended
    January 31, 2012.

“Activities during our most recent quarter related to three primary and time
consuming achievements needed to resume our Phase IIb traumatic brain injury
studies abroad, to further our preclinical studies designed to elaborate the
safety profile of Oxycyte, our leading drug candidate, and capital raising
activities that resulted in securing enough cash to finance activities to help
us achieve the next major milestones necessary to drive our company forward, ”
said Michael Jebsen, Interim Chief Executive Officer, Chief Financial Officer
and President.

Oxygen Biotherapeutics reported net revenue of $222,388 and $1,009,356 for the
three and nine months ended January 31, 2012, respectively compared to
$148,262 and $268,294 for the same periods in the comparable periods in fiscal
2012. This increase is primarily due to government grant revenue earned under
the U.S. Army-funded grant awarded to the company in June 2011 to conduct
preclinical studies for Oxycyte® perfluorocarbon (PFC) emulsion.

These preclinical studies are designed to address safety concerns expressed by
the U.S. Food and Drug Administration (FDA)and to develop a more robust and
comprehensive safety profile for Oxycyte. The results will be used to respond
to questions posed by the FDA which led to Oxycyte being placed on clinical
hold in the United States in 2008. The Company expects to complete this
two-year preclinical program in July with results being publicly reported soon
thereafter.

Dermacyte cosmetic sales revenue declined as the company moved resources out
of this non-core business. The decrease was primarily due to the elimination
of our internal sales force and the suspension of our direct marketing and
advertising programs. In addition, during the fourth quarter, the Company
licensed Dermacyte products to Valor Cosmetics of Lausanne, Switzerland. Valor
has exclusive worldwide rights to distribute, market and sell Dermacyte either
under the Dermacyte brand or its own brand name and packaging.

Selling, general and administrative expenses were $1,441,500 for the quarter
ended January 31, 2013 compared to $1,422,103 for the same period in the prior
year. The slight increase for the period was due primarily to the accrual for
litigation settlement costs offset by decreases in costs incurred for legal
and professional fees, facilities, and other general and administrative
expenses.

Research and Development expenses were $369,447 for the quarter ended January
31, 2013 compared to $599,935 for the same period in the prior year. The
decrease for the period was due primarily to reductions in costs incurred for
personnel, consultants, facilities and other general expenses.

Selling, general and administrative expenses were $3,127,133 for the nine
months ended January 31, 2013, compared to $4,883,903 for the same period in
the prior year. The decrease for the period was due primarily to the reversal
of accrued 409A costs and reductions in the costs incurred for personnel,
legal and professional fees, facilities, and other general and administrative
expenses; partially offset by the accrual for litigation settlement costs.

Research and Development expenses were $1,611,293 for the nine months ended
January 31, 2013, compared to $4,883,903 for the same period in the prior
year. The decrease for the period was due primarily to reductions in costs
incurred for personnel, consultants, facilities and other general expenses;
partially offset by an increase in costs associated with clinical and
preclinical development of Oxycyte.

As of January 31, 2013, the Company had cash and cash equivalents totaling
$828,811 compared to $1,879,872 at April 30, 2012.

Conference Call

Management will host a conference call and webcast regarding the third quarter
financial results for the three and nine months ending January 31, 2013, on
Tuesday, March 19, 2013, at 11 a.m. ET. To access the live teleconference dial
(866) 277-1184 (U.S. and Canada), or (617) 597-5360 (international.) The
participant pass code is 10084976. Also, a live webcast will be available on
our web site http://www.oxybiomed.com/investors.htm . A replay of the webcast
will be available by phone or on the Oxygen website for a limited time. To
access the replay by phone, call (888) 286-8010 (U.S. and Canada) or (617)
801-6888 (international). The pass code for the replay is 10065352.

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 oxygen-carrying 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 oxygen-rich skin care products for the anti-aging market.

                           Financial Tables Follow

  The accompanying notes found in the company’s Form 10-Q filed with the SEC
    on March 18, 2013 are an integral part of these Financial Statements.



OXYGEN BIOTHERAPEUTICS, INC.
(a development stage enterprise)
BALANCE SHEETS
(unaudited)
                                                        
                                       January 31, 2013       April 30, 2012
                                       (Unaudited)            
                                                              
ASSETS
Current assets
Cash and cash equivalents              $ 828,811              $ 1,879,872
Accounts receivable                      13,642                 13,385
Government grant receivable              87,185                 35,650
Inventory                                107,938                83,370
Prepaid expenses                         341,884                455,946
Other current assets                    272,713              162,809      
Total current assets                     1,652,173              2,631,032
Property and equipment, net              226,808                293,606
Debt issuance costs, net                 182,197                278,659
Intangible assets, net                   923,397                872,971
Other assets                            58,262               65,666       
Total assets                           $ 3,042,837           $ 4,141,934    
                                                              
LIABILITIES AND STOCKHOLDERS’
DEFICIT
Current liabilities
Accounts payable                       $ 807,679              $ 542,809
Accrued liabilities                      1,085,373              1,273,837
Convertible preferred stock              -                      1,247,266
Current portion of notes payable,       98,657               62,958       
net
Total current liabilities                1,991,709              3,126,870
Other liabilities                        65,592                 -
Long-term portion of notes              2,586,109            1,361,110    
payable, net
Total liabilities                        4,643,410              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                           3,365                  2,942

and outstanding 33,650,499 and
29,417,718, respectively
Additional paid-in capital               113,581,120            107,279,296
Deficit accumulated during the          (115,185,058 )        (107,628,284 )
development stage
Total stockholders’ deficit             (1,600,573   )        (346,046     )
Total liabilities and                  $ 3,042,837           $ 4,141,934    
stockholders' deficit
                                                                             
                                                                             

OXYGEN BIOTHERAPEUTICS, INC.
(a development stage enterprise)
STATEMENTS OF OPERATIONS
(unaudited)


                                                                     
                                                                             
               Period from May
               26,
                                     Three months ended January 31,          Nine months ended January 31,
               1967
               (Inception) to
               January 31,           2013            2012                   2013              2012
               2013
               (Unaudited)           (Unaudited)      (Unaudited)            (Unaudited)          (Unaudited)
Product        $ 499,153             $ 2,871          $ 4,673                $ 28,899             $ 91,565
revenue
Cost of sales   326,046             1,534          2,512                16,578             47,616     
Net product      173,107               1,337            2,161                  12,321               43,949
revenue
Government      1,311,550           221,051        146,101              997,035            224,345    
grant revenue
Total net        1,484,657             222,388          148,262                1,009,356            268,294
revenue
                                                                                                  
Operating
expenses
Selling,
general, and     50,036,200            1,441,500        1,422,103              3,127,133            4,883,903
administrative
Research and     23,686,605            369,447          599,935                1,611,293            1,740,473
development
Restructuring    220,715               2,941            -                      220,715              -
expense
Loss on
impairment of   363,691             -              -                    -                  -          
long-lived
assets
Total
operating        74,307,211            1,813,888        2,022,038              4,959,141            6,624,376
expenses
                                                                                                  
Net operating    72,822,554            1,591,500        1,873,776              3,949,785            6,356,082
loss
                                                                                                  
Interest         43,338,767            821,777          5,341,988              3,615,204            6,649,554
expense
Loss on
extinguishment   250,097               -                -                      -                    -
of debt
Other (income)  (1,226,360  )        (323       )    82,850               (8,215     )        91,970     
expense
Net loss       $ 115,185,058        $ 2,412,954     $ 7,298,614           $ 7,556,774         $ 13,097,606 
                                                                                                  
Net loss per                         $ (0.07      )   $ (0.26      )         $ (0.24      )       $ (0.53      )
share, basic
Weighted
average number
of common                              33,177,893       27,558,532             31,828,750           24,922,512
shares
outstanding,
basic
Net loss per                         $ (0.14      )   $ (0.39      )         $ (0.30      )       $ (0.65      )
share, diluted
Weighted
average number
of common                              35,352,784       29,731,481             34,003,641           26,630,311
shares
outstanding,
diluted
                                                                                                               

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 the Oxycyte and Dermacyte product lines and the timing of the
introduction of those new products. 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 Item 1A (Risk Factors) of our Annual Report on Form 10-K filed
with the Securities and Exchange Commission (SEC) on July 15, 2011 and in our
subsequent filings with the SEC. The company disclaims any intent or
obligation to update these forward-looking statements beyond the date of this
release, except as required by law. 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
Senior Vice President
Corporate Communications
& Investor Relations
 
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