Oxygen Biotherapeutics Prices Public Offering with Gross Proceeds of $5.4 Million

  Oxygen Biotherapeutics Prices Public Offering with Gross Proceeds of $5.4

Business Wire

MORRISVILLE, N.C. -- July 22, 2013

Oxygen Biotherapeutics, Inc. (NASDAQ: OXBT) today announced the pricing of a
public offering and the entry into definitive agreements with investors for
the sale of securities with gross proceeds to the Company of approximately
$5.4 million. Under the terms of the agreements, Oxygen will issue registered
shares of Series C 8% convertible preferred stock (the “Series C Stock”) with
an aggregate stated value of approximately $5.4 million, which are convertible
into common stock of the Company at $1.95 per share. The transaction also
provides for the issuance by the Company of registered warrants, exercisable
for six years, to purchase up to an aggregate of approximately 2.8 million
shares of common stock of the Company with an initial exercise price of $2.60.

Oxygen plans to use the proceeds from the transaction to further its clinical
trials and efforts to obtain regulatory approval of Oxycyte^®, develop its
product candidates, including dermatologic indications using its topical gel,
support manufacturing of Oxycyte, for research and development and for general
corporate purposes, including working capital and potential acquisitions.
Ladenburg Thalmann & Co. Inc., a subsidiary of Ladenburg Thalmann Financial
Services Inc. (NYSEMKT: LTS), is serving as the exclusive placement agent on
the transaction.

“The proceeds from this transaction, along with our continued initiatives to
reduce our cash burn rate, should provide us with the liquidity necessary to
fund our projected operating requirements through the remainder of our fiscal
year,” said Michael B. Jebsen, Chief Financial Officer, President and Interim
Chief Executive Officer of Oxygen.

The offering is expected to close on or about Tuesday, July 23, 2013, subject
to the satisfaction of customary closing conditions. A more complete
description of the terms and conditions of the financing will be available in
the Form 8-K to be filed by the Company with the Securities and Exchange
Commission (the “SEC”).

The Series C Stock accrues dividends at 8% per annum until the third
anniversary of the issuance date, payable quarterly in cash, or provided
certain conditions are met, in common stock at 90% of a calculated market
price. If Series C Stock is converted into common stock prior to the
three-year anniversary of issuance, the holder is entitled to a three-year
dividend make-whole payment at the time of conversion.

The Series C Stock and warrants described above are being offered by the
Company pursuant to a registration statement on Form S-1 previously filed and
declared effective by the SEC. A prospectus related to the offering will be
filed with the SEC. The securities may be offered only by means of a
prospectus forming a part of the effective registration statement. Copies of
the final prospectus may be obtained at the SEC's website at www.sec.gov, or
by mail from Ladenburg Thalmann & Co. Inc., 4400 Biscayne Blvd., 14^th Floor,
Miami, Florida 33137.

This press release is neither an offer to sell nor a solicitation of an offer
to buy any of the Company's securities. No offer, solicitation, or sale will
be made in any jurisdiction in which such offer, solicitation, or sale is
unlawful. The terms and conditions of the transactions described in this press
release are qualified in their entirety by reference to the transaction
documents, which will be filed with the SEC on Form 8-K. Forms of the
transaction documents have also been filed as exhibits to the Company’s
registration statement on Form S-1.

About Oxygen Biotherapeutics, Inc.

Headquartered in Morrisville, NC, 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, which has been sublicensed to a third-party. See
www.oxybiomed.com for more information.

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 those regarding the closing
of the financing and the Company’s anticipated liquidity position, all as
described above. The forward-looking statements are subject to a number of
risks and uncertainties, including those described herein and in our filings
with the Securities and Exchange Commission, including in our 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


IRTH Communications
Robert Haag, 1-866-976-IRTH (4784)
Press spacebar to pause and continue. Press esc to stop.