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

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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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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
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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.

Further inquiry note:
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: [email protected]
end of announcement                               euro adhoc

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issuer:      Oxygen Biotherapeutics Inc.
             2530 Meridian Pkwy 
             US-27713 Durham, NC
phone:       +1(919)7607606
FAX:         +1(419)7108764
mail:        [email protected]
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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