Oxygen Biotherapeutics Enters Into Definitive Agreements For Financing For Up To $2.1 Million In Gross Proceeds

Oxygen Biotherapeutics, Inc. (NASDAQ: OXBT) today announced that it has entered into definitive agreements with an institutional investor for a financing of up to $2.1 million in gross proceeds. Under the terms of the agreements, Oxygen will issue registered shares of Series B-1 convertible preferred stock (the “Series B-1 Stock”) for $1.6 million in gross proceeds and unregistered shares of Series B-2 convertible preferred stock (the “Series B-2 Stock” and, together with the Series B-1 Stock, the “Preferred Stock”) for $0.5 million in gross proceeds, which are convertible into common stock of the Company at $0.25 per share. The transaction also provides for the issuance by the Company of unregistered warrants to purchase up to 12,600,000 shares of common stock of the Company with an initial exercise price of $0.50.

The offering is expected to close on or about Wednesday, February 27, 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”).

Ladenburg Thalmann & Co. Inc., a subsidiary of Ladenburg Thalmann Financial Services Inc. (NYSEMKT: LTS), is serving as the exclusive placement agent on the transaction.

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.

“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 July 31, 2013,” said Michael B. Jebsen, Chief Financial Officer, President and Interim Chief Executive Officer of Oxygen.

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