Oculus Innovative Sciences Reports Fiscal Fourth Quarter 2012 Financial Results Conference Call Begins at 4:30 p.m. (EDT) Today PETALUMA, Calif. (

Oculus Innovative Sciences Reports Fiscal

Fourth Quarter 2012 Financial Results

Conference Call Begins at 4:30 p.m.

PETALUMA, Calif. (June 7, 2012) - Oculus Innovative

Sciences, Inc. (Nasdaq: OCLS) today announced financial results for the fourth quarter of fiscal year 2012, ended March 31, 2012.

Total revenues were $3.4 million for the fourth quarter ended March 31, 2012 compared to $2.7 million in the same quarter of the

prior year. Product revenues increased $660,000, or 26%, for the fourth quarter ended March 31, 2012 as compared to the same period

in the prior year with increases in the United States, Mexico, India and Singapore, partly offset by declines in Europe and China.

Total revenues for the fiscal year ended March 31, 2012 were $12.7 million. Product revenues for the fiscal year ended March 31,

2012 were up $3 million, or 34%, as compared to the same period in the prior year with increases in the United States, Mexico,

Europe, China and India, offset by a slight decline in the Middle East.

"We continue to grow product revenues for this fiscal year

at 34% compared to the prior year," said Hoji Alimi, Oculus CEO and founder. "We also expect U.S. revenues to increase

in fiscal 2013 as our partners in the acute care and dermatology markets have recently launched multiple new Microcyn-based products.

In conjunction with our partner Quinnova Pharmaceuticals, Inc. and its parent company AmDerma Pharmaceuticals, Inc., we are seeking

approval to initiate a human clinical trial to support FDA clearance of a 510(k) application for use of our Microcyn technology

on hypertrophic and keloid scars."

Product revenue in the United States increased $559,000, or 64%,

in the fourth quarter of fiscal year 2012 compared to the same period in the prior year, primarily due to increased unit growth

and royalty fees received from Oculus' partner Innovacyn, Inc., and due to sales into the dermatology market by Oculus'

Revenue in Mexico increased $165,000, or 14%, in the fourth quarter

of fiscal year 2012 compared to the same period in the prior year, primarily due to 33% growth in sales of the Company's

five-liter presentations, 6% growth in sales of the 120-ml and 240-ml presentations, and sales of new Microcyn-based hydrogel products. The

growth in these three categories was partially offset by a 5% strengthening of the Mexican peso. Revenue growth in Mexico in local

currency was 20% when compared to same period in the prior year.

Revenue in Europe and Rest of World declined $64,000, or 14%, in

the fourth quarter of fiscal year 2012 compared to the same period in the prior year. The decline was primarily the

result of a decrease of $174,000 in revenue from sales in China, partially offset by increases in India and Singapore.

Oculus reported gross profit related to Microcyn products of

$2.1 million, or 67% of product revenues, during the quarter ended March 31, 2012, compared to a gross profit of $1.9 million,

or 75%, for the same period in the prior year. The lower gross profit is due to higher manufacturing costs related to new product

launches label modifications. The company's margins in Mexico were 74% during the quarter ended March 31, 2012, compared

to 78% for the same period in the prior year.

Total operating expenses increased by $284,000, or 9%, to $3.6 million

for the quarter ended March 31, 2012, compared to $3.3 million for the same period in the prior year. Operating expenses minus

non-cash expenses during the quarter ended March 31, 2012 were $3.1 million, up from $2.7 million in the same period in the prior

year. Research and development expense decreased $154,000, or 24%, to $476,000 for the quarter ended March 31, 2012, compared to

$630,000 for the same period in the prior year, mostly due to lower costs incurred for product tests and studies. Selling, general

and administrative expense increased $438,000, or 16%, to $3.1 million during the quarter ended March 31, 2012, from $2.7 million

for the same period in the prior year. This increase was primarily due to higher sales related costs in Mexico and United States,

and higher consulting and patent costs in the United States.

Net loss for the quarter ended March 31, 2012 was $1.8 million,

an increase of $74,000 from $1.7 million for the same period in the prior year. Stock compensation

charges were $461,000 million and $527,000 for the quarters ended March 31, 2012 and 2011, respectively.

Interest expense increased $129,000, or 86%, to $279,000 during

the quarter ended March 31, 2012, as compared to the same period in the prior year.

As of March 31, 2012, Oculus had unrestricted cash and cash equivalents

of $3.4 million, compared with $4.4 million as of March 31, 2011. The Company's total debt position was $4.6 million as of

March 31, 2012, compared with $3.1 million as of March 31, 2011.

Results for Fiscal Year 2012

Total revenues were $12.7 million for the fiscal year ended March

31, 2012, compared to $9.8 million for the same period in the prior year. Product revenues increased $3 million, or 34%, for the

fiscal year ended March 31, 2012 as compared to the same period in the prior year, with increases in the United States, Mexico,

Europe, China and India, offset by a slight decline in the Middle East. Gross profitability for product revenues for the fiscal

year ended March 31, 2012 increased to 73% compared to a gross profit of 67% for the same period in the prior year, primarily attributable

to higher gross profit margins in all business segments. Total cash operating expenses increased $1.1 million or 11% for the fiscal

year ended March 31, 2012 compared to the same period in the prior year, mostly due to higher sales-related costs in Mexico and

United States, and higher stock compensation charges.

Oculus management will hold a conference call today to discuss fourth

quarter results and to answer questions, beginning at 4:30 p.m. EDT. Individuals interested in participating in the conference

call may do so by dialing 877-303-7607 for domestic callers or 973-638-3203 for international callers. Those interested

in listening to the conference call live via the Internet, with a corresponding slide presentation, may do so at http://ir.oculusis.com/events.cfm.

Please log on approximately 30 minutes prior to the presentation in order to register and download the appropriate software.

A telephone replay will be available for seven days following the

conclusion of the call by dialing 855-859-2056 for domestic callers, or 404-537-3406 for international callers, and entering conference

code 80135465. A webcast replay will be available on the site at http://ir.oculusis.com/events.cfm for one year following the call.

About Oculus Innovative Sciences

Oculus Innovative Sciences is a commercial healthcare company

that designs, produces and markets innovative, safe and effective healthcare products. Oculus is pioneering innovative solutions

in multiple markets including dermatology, oral care, surgical, wound care, animal healthcare and others, and has commercialized

products in the United States, Europe, India, China, Mexico, and select Middle East countries. The company's headquarters are in

Petaluma, California, with manufacturing operations in the United States and Latin America. More information can be found at www.oculusis.com.

Forward-Looking Statements

Except for historical information herein, matters set forth

in this press release are forward-looking within the meaning of the "safe harbor" provisions of the Private Securities

Litigation Reform Act of 1995, including statements about the Company's commercial and technology progress and future financial

performance. These forward-looking statements are identified by the use of words such as "continue," "initiating,"

and "expect," among others. Forward-looking statements in this press release are subject to certain risks

and uncertainties inherent in the Company's business that could cause actual results to vary, including such risks that regulatory

clinical and guideline developments may change, scientific data may not be sufficient to meet regulatory standards or receipt

of required regulatory clearances or approvals, clinical results may not be replicated in actual patient settings, protection

offered by the Company's patents and patent applications may be challenged, invalidated or circumvented by its competitors, the

available market for the Company's products will not be as large as expected, the Company's products will

not be able to penetrate one or more targeted markets, revenues will not be sufficient to fund further development and clinical

studies, the Company may not meet its future capital needs, and its ability to obtain additional funding, as well as uncertainties

relative to varying product formulations and a multitude of diverse regulatory and marketing requirements in different countries

and municipalities, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission

including the annual report on Form 10-K for the year ended March 31, 2011. Oculus Innovative Sciences disclaims any obligation

to update these forward-looking statements except as required by law.

Oculus and Microcyn are trademarks or registered trademarks of Oculus

Innovative Sciences, Inc. All other trademarks and service marks are the property of their respective owners.

Oculus Innovative Sciences, Inc.

Director of Marketing/Communications

OCULUS INNOVATIVE SCIENCES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except share and per share amounts)

OCULUS INNOVATIVE SCIENCES, INC. AND SUBSIDIARIES

Consolidated Statements of Operations