Oxygen Biotherapeutics Inc.

EANS-Adhoc: Oxygen Biotherapeutics Announces Registered Financing for up to $7.5 million in Gross Proceeds

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  ad-hoc disclosure transmitted by euro adhoc with the aim of a Europe-wide
  distribution. The issuer is solely responsible for the content of this
  announcement.
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09.12.2011

MORRISVILLE, NC, December 9, 2011 - Oxygen Biotherapeutics, Inc. (NASDAQ & SIX
Swiss Exchange: OXBT) today announced that it has entered into definitive
agreements with institutional investors for up to $7.5 million in gross
proceeds.  Under the terms of the agreements, Oxygen will issue registered
shares of Series A Convertible Preferred Stock, par value $0.0001 per share (the
"Preferred Stock"), and registered warrants ("Warrants") to purchase shares of
the Company´s common stock, par value $0.0001 per share.  The transaction
provides for 50% Warrant coverage on the Preferred Stock, based on the number of
shares of common stock initially issuable under the Preferred Stock.

The transaction is scheduled to fund in two installments.  Upon the initial
closing, the investors will purchase $3.5 million of newly issued Preferred
Stock and related Warrants.  Subject to certain conditions, there is a second
mandatory installment whereby the Company may issue up to an additional $4.0
million of Preferred Stock and Warrants.  The second installment would fund when
the first installment is fully redeemed by the Company, at approximately the six
month anniversary of the initial closing.

The offering is expected to close on or about Monday, December 12, 2011, subject
to the satisfaction of customary closing conditions.

William Blair & Company is serving as the exclusive placement agent on the
transaction.

end of ad-hoc-announcement
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Use of Proceeds, Terms and Conditions

Oxygen plans to use the proceeds from the transaction for Oxycyte® PFC
development, clinical and preclinical trials, product development and general
working capital.

“This significant commitment from two new U.S. institutional investors is
structured to enable the Company to repay the Convertible Preferred stock in
shares of common stock or cash at the Company’s option thereby providing us
significant, permanent equity capital.  The proceeds, along with our recent
initiatives to reduce our cash burn rate, should serve to support our
initiatives through the end of calendar year 2012,” said Michael B. Jebsen,
Chief Financial Officer, President and Interim Chief Executive Officer of
Oxygen.

The general terms of the placement are summarized as follows:

•Up to $7.5 million in gross proceeds with $3.5 million due upon the closing
scheduled for December 12, 2011.

•A second installment for up to $4.0 million is mandatory, provided the company
meets certain conditions.

•The initial conversion price on the Preferred stock is $2.22, and is subject to
certain adjustments.

•The Company will redeem one-sixth of the principal per month in six
installments.  The repayment of principal is payable in cash or, provided that
certain conditions are met in each payment period, in registered common stock,
at the Company’s discretion.  If paid in stock, the redemption price will be the
lesser of the initial conversion price and 90% of a calculated market price of
the common stock.

•The dividend rate on the Preferred Stock is 7% per annum, payable monthly in
cash or, provided that certain conditions are met in each payment period, in
registered common stock at a calculated market price, at the Company’s
discretion.


Investors will receive warrants to purchase approximately 1,689,192 shares of
common stock, which are exercisable for five years beginning on the one-year
anniversary of the closing date.  The warrants have an initial exercise price of
$2.22, subject to anti-dilution adjustments.  

The securities described above are being offered by the Company pursuant to a
registration statement previously filed and declared effective by the Securities
and Exchange Commission (the “SEC”).  A prospectus supplement related to the
offering will be filed with the SEC.  The securities may be offered only by
means of a prospectus, including a prospectus supplement, forming a part of the
effective registration statement.

Copies of the final prospectus supplement and accompanying base prospectus may
be obtained at the SEC's website at www.sec.gov, or by mail from William Blair &
Company, 222 West Adams Street, Chicago, Ill, 60606. 

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
have been filed with the Securities and Exchange Commission on Form 8-K.


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 product called Oxycyte® that is being formulated for both
intravenous and topical delivery for use in treating traumatic brain injury,
decompression sickness, and dermatological indications.  In addition, the
Company has commercialized its DERMACYTE® line of oxygen-rich skin care
products. See www.oxybiomed.com or www.DermacyteUS.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 the management transition,
and expansion of research and development of the Oxycyte product line, including
the timing of the introduction of these new products, and the closing of the
second installment of the financing as described above. 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 Annual Report on Form 10-K filed on July
15, 2011, and the Quarterly Report on Form 10-Q filed on September 19, 2011. 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. 



Further inquiry note:
Ellen Corliss	
Vice President, Corporate Communications 	
& Investor Relations			
Oxygen Biotherapeutics, Inc	
One Copley Pkwy, Suite 490	
Morrisville, NC 27560		
Direct Telephone: +1 919 855 2112			
Direct Fax: +1 919 806 4417	
Email: e.corliss@oxybiomed.com

end of announcement                               euro adhoc 
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issuer:      Oxygen Biotherapeutics Inc.
             One Copley Parkway, Suite 490 
             US-27560 Morrisville, NC
phone:       +1 (919) 855 21 12
FAX:         +1 (919) 806 44 17
mail:     e.corliss@oxybiomed.com
WWW:      www.oxybiomed.com
sector:      Biotechnology
ISIN:        US69207P2092
indexes:     SSIRT
stockmarkets: Nasdaq: New York, Main Standard: SIX Swiss Exchange 
language:   English
 



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