Oxygen Biotherapeutics Reports Financial Results for Fiscal Year 2013

  Oxygen Biotherapeutics Reports Financial Results for Fiscal Year 2013

Business Wire

MORRISVILLE, N.C. -- June 27, 2013

Oxygen Biotherapeutics, Inc., (“OBI”) (NASDAQ: OXBT) a developer of
oxygen-carrying therapeutics, today announced results for the fiscal year (FY)
ended April 30, 2013.

Financial Highlights:

  *Government grant revenue increased 263% year-over-year to $1.14 million
    due to progress of the underlying studies for FDA-required preclinical
    trials on Oxycyte® and the achievement of contractual milestones under the
  *Raised approximately $2.1 million in an offering of Series B preferred
    stock and warrants
  *Reduced operating expenses by 26% year-over-year as a result of focusing
    operations on Oxycyte® as a therapeutic for critical indications including
  *Net operating loss narrowed by 37% and net loss attributable to common
    shareholder narrowed by 34% driven by increased revenues and reduced
    operating expenses
  *Out-licensed Dermaycte® product line in February 2013 to Valor SA of
    Switzerland in exchange for non–refundable annual licensing fees and
    royalty revenues

Clinical Highlights:

  *Made significant advancements in preclinical trials requested by the FDA
    to test the safety profile of Oxycyte® for the treatment of traumatic
    brain injury (TBI), with preclinicals scheduled for completion in the
    second quarter of fiscal year 2014
  *Secured exclusive long-term supply of cGMP-compliant Oxycyte® for ongoing
    clinical trials
  *Signed research agreement for the U.S. Navy to fund a study of Oxycyte® as
    potential treatment for hemorrhagic shock
  *Secured additional research agreement for the U.S. Navy to fund a study of
    Oxycyte® as an intravenous treatment for infected wounds and related
  *Aurum Biosciences, the Company’s research partner for stroke indications,
    and the University of Glasgow, demonstrated in a study, the ability of
    Oxycyte® to supply oxygen to critical penumbral tissue in acute ischemic

“In fiscal 2013 we successfully executed on focusing the Company’s operations
on Oxycyte® for critical indications including TBI and stroke. During the 2013
fiscal year we conducted several FDA requested preclinical trials on Oxycyte®
designed to address the FDA’s clinical hold on PFC emulsions,” stated Michael
Jebsen, Interim CEO, President and Chief Financial Officer. “We also continue
progress with our Phase IIb trials for Oxycyte® in the treatment of TBI in
Switzerland and Israel. We further streamlined and reduced our operating
expenses and have out-licensed our cosmetics line with the goal of creating
high-margin licensing revenues. We seek additional out-licensing opportunities
for a broad range of non-core indications of our platform oxygen-carrying

Financial Results:

Through the third quarter of fiscal 2013, we generated product revenue from
the sale of Dermacyte® through on-line retailers, physicians and medical spa
facilities, and through distribution agreements with unrelated companies. Net
product revenue for the years ended April 30, 2013 and 2012 was $49,572 and
$49,266, respectively. The decrease in product revenue was primarily due to
the elimination of our internal sales force and the suspension of our direct
marketing and advertising programs. Gross profit as a percentage of revenue
was 53% and 49% for the years ended April 30, 2013 and 2012, respectively. In
the fourth quarter of fiscal 2013 we out-licensed the Dermacyte® product line
to the cosmetics division of Valor SA of Switzerland.

We also earn revenues through a cost-reimbursement grant sponsored by the
United States Army (Grant Revenue). Grant Revenue is recognized as milestones
under the grant program are achieved. Grant Revenue is earned through
reimbursements for the direct costs of labor, travel, and supplies, as well as
the pass-through costs of subcontracts with third-party contract research
organizations. For the year ended April 30, 2013, we recorded approximately
$1,141,356, a 263% increase over $314,515 in revenue under the grant program
for the year ended April 30, 2012.

Total operating expenses for the year ended April 30, 2013 were $6,379,955
compared to $8,583,978 for the same period in 2012. The 26% decrease in total
operating expenses was the result of reductions in selling, general and
administrative costs, partially offset by an increase in restructuring

Marketing and sales expenses for the year ended April 30, 2013 decreased 73%
to $108,165 compared to $393,922 in the prior year. The decrease in marketing
and sales expenses for the year was driven primarily by reductions in costs
incurred for direct marketing and compensation.

General and administrative (G&A) expenses for the year ended April 30, 2013
decreased 37% to $3,567,980 compared with $5,697,884 in the prior year. The
decrease in G&A expenses was driven primarily by reductions in costs incurred
for legal and professional fees, compensation, facilities, travel and
depreciation and amortization.

Research and development (R&D) expenses for the year ended April 30, 2013
declined less than one percent to $2,455,816 compared with $2,462,638 in the
prior year.

During the year ended April 30, 2013, interest expense was approximately $4.2
million compared to approximately $7.4 million in the prior year. In the
current year we recognized non-cash interest expense related to the fair-value
adjustments to our Series A preferred stock, dividends paid on our Series A
preferred stock and quarterly interest accrued on our outstanding convertible
notes payable.

Other expense decreased approximately $92,000 for the year ended April 30,
2013 compared to the prior year, primarily due to the write off of receivables
from Glucometrics, Inc, or Glucometrics in the prior year. Glucometrics
previously held license rights for the use of our patents related to glucose
monitoring technology.

For the fiscal year ended April 30, 2013, we reported a net loss of
$10,373,871, or $6.68 per diluted share compared to a net loss of $15,712,410,
or $14.07 per diluted share, in the prior year.

We ended the fiscal year with cash and cash equivalents totaling $783,528
compared with $1,879,872, in the prior year.

About Oxygen Biotherapeutics, Inc.

Oxygen Biotherapeutics, Inc. is developing medical 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. Dermacyte is now out-licensed to Valor
Cosmetics of Switzerland.

                           Financial Tables Follow

  The accompanying notes found in the Company’s Form 10-K filed with the SEC
     on June 26, 2013 are an integral part of these Financial Statements.

(a development stage enterprise)
                                          April 30, 2013     April 30, 2012

Current assets
Cash and cash equivalents                  $ 783,528          $ 1,879,872
Accounts receivable                          445,237            13,385
Government grant receivable                  96,226             35,650
Inventory                                    99,204             83,370
Prepaid expenses                             247,646            455,946
Other current assets                        170,410          162,809      
Total current assets                         1,842,251          2,631,032
Property and equipment, net                  205,389            293,606
Debt issuance costs, net                     150,043            278,659
Intangible assets, net                       924,698            872,971
Other assets                                58,262           65,666       
Total assets                               $ 3,180,643       $ 4,141,934    
Current liabilities
Accounts payable                           $ 977,162          $ 542,809
Accrued liabilities                          874,876            1,273,837
Convertible preferred stock                  -                  1,247,266
Current portion of notes payable, net       57,539           62,958       
Total current liabilities                    1,909,577          3,126,870
Other liabilities                            54,660             -
Long-term portion of notes payable, net     2,994,442        1,361,110    
Total liabilities                            4,958,679          4,487,980
Commitments and contingencies; see Note J.
Stockholders' deficit
Preferred stock, undesignated, authorized
9,990,400 shares; issued 2,100;
                                             1                  -
outstanding 987 and 0, respectively; see
Note E and Note H.
Common stock, par value $.0001 per share;
authorized 400,000,000 shares; issued
                                             193                2,942
and outstanding 1,930,078 and 1,470,890,
Additional paid-in capital                   115,265,854        107,279,296
Deficit accumulated during the development  (117,044,084 )    (107,628,284 )
Total stockholders’ deficit                 (1,778,036   )    (346,046     )
Total liabilities and stockholders'        $ 3,180,643       $ 4,141,934    

(a development stage enterprise)
                                              Year ended April 30,
                          Period from May 26,

                          1967 (Inception) to  2013            2012

                          April 30, 2013
Product revenue           $   562,937          $ 92,683         $ 100,519
Cost of sales                352,579          43,111         51,253     
Net product revenue           210,358            49,572           49,266
Government grant             1,455,871        1,141,356      314,515    
Total net revenue             1,666,229          1,190,928        363,781
Operating expenses
Selling, general,             50,585,212         3,676,145        6,091,806
and administrative
Research and                  24,531,128         2,455,816        2,462,638
Restructuring                 220,715            220,715          -
Loss on impairment
of long-lived                390,970          27,279         29,534     
Total operating               75,728,025         6,379,955        8,583,978
Net operating loss            74,061,796         5,189,027        8,220,197
Interest expense              43,962,019         4,238,456        7,412,054
Loss on
extinguishment of             250,097            -                -
Other (income)               (1,229,828   )    (11,683    )    80,159     
Net loss                  $   117,044,084     $ 9,415,800     $ 15,712,410 
Preferred stock              958,071          958,071        -          
Net loss
attributable to           $   118,002,155     $ 10,373,871    $ 15,712,410 
common stockholders
Net loss per share,                            $ (6.29      )   $ (12.12     )
Weighted average number of common shares         1,650,280        1,296,414
outstanding, basic
Net loss per share,                            $ (6.68      )   $ (14.07     )
Weighted average number of common shares         1,759,025        1,387,621
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. The forward-looking statements are subject to a
number of risks and uncertainties 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 annual report on Form 10-K filed on June 26, 2013 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.


IRTH Communications
Robert Haag, 1-866-976-IRTH (4784)
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