Oxygen Biotherapeutics Inc.

EANS-Adhoc: Oxygen Biotherapeutics Reports Financial Results For Third Quarter FY2011

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9-month report/Biotechnology

22.03.2011

MORRISVILLE, NC, March 21, 2011 — Oxygen Biotherapeutics, Inc. (NASDAQ and SIX Swiss Exchange: OXBT), a development stage biomedical company focused on developing oxygen-rich intravenous and topical products, today announced results for the fiscal year (FY) third quarter ended January 31, 2011.

Highlights (activity through March 18, 2011)

•Received $2.07 million two-year grant from the U.S. Army to study the use of the company´s Oxycyte® perfluorocarbon (PFC) emulsion for traumatic brain injury. •Signed research contract with Hackensack University Medical Center to study the wound healing properties of the company´s Wundecyte™ gel. These studies are funded by the U.S. Department of Defense. •Signed agreement to sell DERMACYTE® skin care products to Swiss company that will target the Swiss, European Union and Russian markets. Company ordered additional 10,000 units in March. •Signed agreement to sell DERMACYTE skin care products to Mexican company that will target the Mexican market. •Signed a Letter of Intent with Sarasota Medical Products to pursue joint research and development in chronic ischemic wound care.

"Finding solutions for oxygen deprived tissues continues to be a high priority of the U.S. military and we are pleased to be a part of the process to develop new and better treatments for our injured soldiers," said Chris Stern, Chairman & Chief Executive Officer of Oxygen Biotherapeutics. "It is our hope that TBI studies conducted with the Army grant will help us develop the safety profile of Oxycyte PFC and address questions raised by U.S. regulatory authorities. Likewise, we believe the wound studies with HUMC, also funded by the DoD, will provide valuable data necessary to move our topical PFC formulation for wound care forward."

Regarding the DERMACYTE business, Stern said: "During this quarter we set the stage for international sales of DERMACYTE products by entering into an agreement with DERMACYTE Switzerland Ltd. (DSL). They are meeting their contractual obligations by ordering 10,000 units of DERMACYTE this month. Our agreement with DSL sparked interest from Mexico, resulting in a similar agreement with Comercial Uni2 this month. Our goal is to enter into additional distribution agreements while we develop our domestic sales force now focused on medical practices in South Florida, Southern California and North Carolina."

Third Quarter Results

Oxygen Biotherapeutics reported net revenue of $26,589 for the third quarter of fiscal 2011, compared to $12,165 for the comparable quarter the previous year due primarily to sales of DERMACYTE products to DSL. Gross margin was 51% as compared to 40% for the three months ended January 31, 2011 and 2010 respectively.

Net revenue for the nine months ended January 31, 2011 was $58,825 compared to net revenue of $18,726 for the same period in fiscal year 2010. This was primarily due to the addition of two new DERMACYTE products and direct-to-consumer sales. Gross margin as a percent of revenue was 62% compared with 50% for the comparable nine-month period year over year.

For the third-quarter ended January 31, 2011, we reported a net loss of approximately $2,544,187 million, or $0.11 per share, compared to a net loss of approximately $2,753,712 million, or $0.13 per share for the same period in the prior year. We reported a net loss of approximately $7,598,423 million, or $0.33 per share for the nine month period ended January 31, 2011, compared to a net loss of $7,739,602 million, or $0.41 per share for the same period in fiscal year 2010.

Total operating expenses for the quarter ended January 31, 2011 were $2,781,344 compared to $2,764,776 for the same period in 2010. For the nine-month period ended January 31, 2011 the company had total operating expenses of $7,893,518 compared to $7,648,362 for the same period last year. The increase in operating expenses for the three-months ended January 31, 2011 was due to increases of approximately $200,000 and $325,000 in sales and marketing costs and general and administrative costs, respectively, partially offset by a decrease in research and development costs of approximately $510,000. The increase in operating expenses for the nine-months ended January 31, 2011 was due to increases of approximately $415,000 and $47,000 in sales and marketing costs and research and development costs, respectively, partially offset by a decrease in general and administrative costs of approximately $215,000.

The increases in marketing and sales expenses for the three- and nine-months ended January 31, 2011 were driven primarily by an increase in the costs incurred for compensation and direct advertising.

The increase in general and administrative expenses for the three months ended January 31, 2011 was driven primarily by a reduction in costs incurred for banking and investor relations, travel related costs, compensation and consulting fees, offset by accruals for contingent liabilities associated with potential 409A tax liabilities. The decrease in general and administrative expenses for the nine months ended January 31, 2011 was driven primarily by a reduction in costs incurred for stock-based compensation and consulting fees; partially offset by an increase in depreciation and amortization, rent, compensation and accruals for contingent liabilities associated with potential 409A tax liabilities.

The decrease in research and development expenses for the three-months ended January 31, 2011 was driven primarily by a reduction in the costs incurred for the development of Oxycyte and DERMACYTE, consulting costs, and preclinical study costs partially offset by an increase in costs incurred in connection with the Phase II-b clinical trials and compensation. The slight increase in research and development expenses for the nine-months ended January 31, 2011 was driven primarily by costs incurred for compensation and the costs associated with the Phase II-b clinical trials for Oxycyte, offset by a reduction in the costs incurred for the development of Oxycyte and DERMACYTE, consulting costs, and preclinical research costs.

During the nine-month period ending January 31, 2011, as compared to the same period in 2010, total other income increased approximately $240,000 primarily due to an award of $244,489 under the Patient Protection and Affordable Care Act of 2010 received in November 2010.

For the nine-month period ended January 31, 2011, the Company had cash and cash equivalents totaling $522,340, down from $632,706 at April 30, 2010.

Conference Call

Management will host a conference call on Tuesday, March 22, 2011 at 11 a.m. EDT. To access the live teleconference, dial (866) 578-5784 (U.S. and Canada) or (617) 213-8056 (international.) The participant pass code is 93886225. 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 pass code for the replay is 38473378.

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 our filings with the Securities and Exchange Commission, including in the current reports on Form 10-Q and Form-10K. 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.

end of ad-hoc-announcement ========================================== ====================================== About Oxygen Biotherapeutics, Inc.

Headquartered in Morrisvile, 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 being formulated for both intravenous and topical delivery. Potential indications include traumatic brain injury, decompression sickness, wounds and dermatologic indications. This year, the company launched its DERMACYTE® line of oxygen-rich skin care products. More information is available at www.oxybiomed.com or www.dermacyteUS.com.

end of announcement                               euro adhoc
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Contact:

Ellen Corliss	
Vice President, Corporate Communications
& Investor Relations
Oxygen Biotherapeutics, Inc
2530 Meridian Pkwy, 3rd floor
Durham, NC 27713
Direct Telephone: +1 919 855 2112
Direct Fax: +1 919 806 4417
Email: e.corliss@oxybiomed.com

Branche: Biotechnology
ISIN: US69207P2092
WKN: 10728277
Index: SSIRT
Börsen: New York / Nasdaq
SIX Swiss Exchange / Main Standard


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