<PAGE>

                       SYNTHETIC BLOOD INTERNATIONAL, INC.


                                    FORM 10-Q


                       SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C.



     [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
          EXCHANGE ACT OF 1934.

                 For the quarterly period ended January 31, 2000

                         Commission File Number 2-31909


                       SYNTHETIC BLOOD INTERNATIONAL, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           NEW JERSEY                                     22-3067701
   -------------------------                        ------------------------
    (State of Incorporation)                        (IRS Employer ID Number)


                 2685 CULVER AVENUE       KETTERING, OHIO 45429
                 ----------------------------------------------
                    (Address of principal executive offices)


                                  937-298-6070
                                  ------------
              (Registrant's telephone number, including area code)

Indicate by the check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports).

                                 YES (X) NO ( )


Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of January 31, 2000.

                70,441,038 shares of common stock par value $0.01
                -------------------------------------------------

                                       1
<PAGE>

                       SYNTHETIC BLOOD INTERNATIONAL, INC.
                          (A Development Stage Company)
                                 BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                  January 31,       April 30,
                                                                      2000            1999
                                                                  ------------    ------------
                                                                   (Unaudited)
<S>                                                               <C>             <C>

                                  ASSETS
                                  ------
Current Assets:
     Cash and cash equivalents ................................   $     39,060    $    193,013
     Prepaid expenses .........................................         76,380          60,874
                                                                  ------------    ------------

                Total Current Assets ..........................   $    115,440    $    253,887
     Property & Equipment, net ................................         39,240          61,602
     Other Assets, Patents and Technology .....................        224,619         215,417
                                                                  ------------    ------------

                                                                  $    379,299    $    530,906
                                                                  ============    ============

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY
                    ----------------------------------------

Current Liabilities:
     Notes payable & current portion of long-term debt ........   $     79,714    $    101,170
     Accounts payable .........................................        287,254         305,686
     Stockholders loans .......................................         88,968          76,900
     Accrued liabilities ......................................         91,919         118,470
                                                                  ------------    ------------

Total Current Liabilities .....................................   $    547,855    $    602,226

Notes Payable, less current portion ...........................         37,159          47,327
                                                                  ------------    ------------

Total Liabilities .............................................   $    585,014    $    649,553
                                                                  ------------    ------------

Stockholders' Deficiency:
   Preferred Stock, authorized 10,000,000 shares;
       issued and outstanding, none ...........................   $       --      $       --
  Common Stock, par value $.01 per share;
      authorized 100,000,000 shares; issued and
      outstanding, 70,441,038 and 55,314,324 ..................        704,411         553,143
  Additional paid in capital ..................................     11,272,118       9,730,209
  Stock subscription receivable................................     (1,200,000)           --
  Deficit accumulated during development stage ................    (10,982,244)    (10,401,999)
                                                                  ------------    ------------
Total Stockholders' Deficiency ................................   $   (205,715)   $   (118,647)
                                                                  ------------    ------------

                                                                  $    379,299    $    530,906
                                                                  ============    ============
</TABLE>


                 See accompanying notes to financial statements

                                       2
<PAGE>

                       SYNTHETIC BLOOD INTERNATIONAL, INC.
                          (A Development Stage Company)

                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                         Accumulated
                                         During the         Three Months Ended             Nine Months Ended
                                         Development           January 31,                     January 31,
                                           Stage           2000           1999             2000            1999
                                       ------------    ------------    ------------    ------------    ------------
                                         (Unaudited)           (Unaudited)                        (Unaudited)
<S>                                    <C>             <C>             <C>             <C>              <C>
Expenses:
     Research and development .......   $  3,303,931    $     69,764    $     42,173    $    140,007    $     99,795

     General and administrative .....      7,619,937         109,330         117,507         456,090         525,221

     Interest .......................        160,079           2,816           4,516          10,487          14,106
                                        ------------    ------------    ------------    ------------    ------------

Total Expense .......................   $ 11,083,947    $    181,910    $    164,196    $    606,584    $    639,122

Other Income ........................       (101,703)           (238)        (12,248)        (26,339)        (22,109)
                                        ------------    ------------    ------------    ------------    ------------

NET LOSS ............................   $(10,982,244)   $   (181,672)   $   (151,948)   $   (580,245)   $   (617,013)
                                        ============    ============    ============    ============    ============

NET LOSS PER SHARE, BASIC AND DILUTED
                                                        $     (0.003)   $     (0.003)   $     (0.009)   $     (0.012)
                                                        ============    ============    ============    ============
WEIGHTED AVERAGE
    NUMBER OF SHARES
    OUTSTANDING, BASIC
    AND DILUTED .....................                     65,194,496      51,132,128      62,064,627      50,971,548
                                                        ============    ============    ============    ============
</TABLE>


                 See accompanying notes to financial statements

                                       3
<PAGE>

                       SYNTHETIC BLOOD INTERNATIONAL, INC.
                          (A Development Stage Company)
                             STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
                                                   Accumulated
                                                      During          Nine Months Ended
                                                   Development             January 31,
                                                      Stage           2000             1999
                                                   ------------    ------------    ------------
                                                    (Unaudited)            (Unaudited)

<S>                                                <C>             <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss .......................................   $(10,982,244)   $   (580,245)   $   (617,013)
Adjustments to reconcile net loss to cash used
   in operating activities:
      Depreciation and amortization ............        400,730          39,170          41,410
      Write-down other assets ..................        129,210
      Compensatory stock options/warrants issued        250,466
      Issuance of stock for services ...........      1,046,441                          32,705
      Issuance of stock below market value .....        695,248
Contribution of capital by stockholders through
    services rendered ..........................        216,850
Changes in operating assets and liabilities:
   Prepaid expenses and other assets ...........        (76,380)        (15,506)        (76,429)
   Accounts payable and accrued expense ........        554,234         (32,915)         39,581
                                                   ------------    ------------    ------------
      Net cash used in operating activities ....   $ (7,765,445)   $   (589,496)   $   (579,746)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of other assets .......................   $   (468,087)   $    (22,377)   $    (29,167)
Proceeds from the sale of equipment ............         15,457
Purchase of property and equipment .............       (288,830)         (3,632)         (8,575)
                                                   ------------    ------------    ------------
     Net cash used in investing activities .....   $   (741,460)   $    (26,009)   $    (37,742)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock .............   $  6,936,547    $    493,176    $     22,051
Repayments of amounts due stockholders .........       (121,517)
Proceeds from stockholder notes payable ........        977,692
Contribution of capital by stockholder .........         40,700
Proceeds from notes and debentures .............        951,248                          99,096
Payments on notes and lease obligations ........       (238,706)        (31,624)        (72,914)
                                                   ------------    ------------    ------------

     Net cash provided by financing activities .   $  8,545,964    $    461,552    $     48,233
Net change in cash and cash equivalents ........         39,059        (153,953)       (569,255)

Cash and cash equivalents, beginning of period .           --           193,013         740,215
                                                   ------------    ------------    ------------
Cash and cash equivalents, ending of period ....   $     39,059    $     39,060    $    170,960
                                                   ============    ============    ============
 Cash paid for: Interest .......................   $    160,079    $     10,487    $     14,106
                Taxes ..........................          9,216            --               800
</TABLE>



                 See accompanying notes to financial statements

                                       4
<PAGE>

                       SYNTHETIC BLOOD INTERNATIONAL, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS


1.     BASIS OF PRESENTATION

       The accompanying unaudited financial statements contain all adjustments
       (consisting only of normal recurring adjustments) which in the opinion of
       management, are necessary to present fairly the financial position of the
       Company at January 31, 2000, and the results of its operations for the
       three month and nine month periods ended January 31, 2000 and 1999 and
       its cash flows for the nine month periods ended January 31, 2000 and
       1999. Certain information and footnote disclosures normally included in
       financial statements have been condensed or omitted pursuant to rules and
       regulations of the Securities and Exchange Commission although the
       Company believes that the disclosures in the financial statements are
       adequate to make the information presented not misleading.

       The financial statements included herein should be read in conjunction
       with the financial statements of the Company, included in the Company's
       Annual Report on Form 10-K for the year ended April 30, 1999 filed with
       the Securities and Exchange Commission on September 1, 1999.

       Going Concern - The accompanying financial statements have been prepared
       on a going concern basis, which contemplates the realization of assets
       and the satisfaction of liabilities in the normal course of business. As
       shown in the financial statements, the Company is in the development
       stage and, at January 31, 2000 has accumulated losses from operations
       amounting to $10,982,244 and working capital deficit of $432,415. The
       Company is in the pre-clinical trial stage of its products. These
       products must undergo further development and testing prior to submission
       to the FDA for approval to market the products. The Company's
       continuation as a going concern is dependent on its ability to generate
       sufficient cash flow, to meet its obligations on a timely basis, to
       obtain additional financing as may be required, and ultimately to attain
       successful operations. However, no assurance can be given at this time as
       to whether the Company will achieve any of these conditions or that the
       FDA approval will be granted, if and when applied for one or more of the
       Company's products. These factors, among others, raise substantial doubt
       about the Company's ability to continue as a going concern. The financial
       statements do not include any adjustments relating to the recoverability
       and classification of recorded asset amounts or the amounts and
       classification of liabilities that might be necessary should the Company
       be unable to continue as a going concern for a reasonable period of time.
       Additional funding will be necessary which will require future private
       placements and/or joint ventures to enable the Company to continue the
       required testing through Phase I, II and III human testing.

                                       5
<PAGE>

2.       STOCKHOLDERS' DEFICIENCY

         During the three month period ended July 31, 1999, the Company issued
         412,135 shares of the Company's common stock to third party investors
         for $.11 per share, plus options to purchase 412,135 shares of the
         common stock at $.11 per share.

         Also during the three month period ended July 31, 1999, the Company
         issued 1,132,619 shares of the Company's common stock to third party
         investors for $.08 per share and 200,000 shares for $.06, plus options
         to purchase 1,812,190 shares of the common stock at $.14 per share.

         During the three month period ended October 31, 1999, the Company
         issued 950,710 shares of the Company's common stock to third party
         investors for $.08 per share.

         Also during the three month period ended October 31, 1999, the Company
         issued 2,500,000 shares of the Company's common stock to a third party
         investor for $.08 per share. In addition, the Company sold an
         additional 9,000,000 shares of common stock to this investor at $.13 a
         share in exchange for a promissory note of $1,200,000 payable in 12
         equal monthly installments of $100,000, commencing in April 2000. The
         note has been recorded as a stock subscription receivable and has been
         presented as a reduction of Stockholders' Deficiency in the
         accompanying Balance Sheet.

         During the three month period ended January 31, 2000, the Company
         issued 931,250 shares of the Company's common stock to third party
         investors for $.08 per share.

         Subsequent to January 31, 2000, the Company issued 3,600,000 shares of
         the Company's common stock to third party investors for $.28 per share,
         which resulted in net cash proceeds of $1,000,000.

                                       6
<PAGE>

                       SYNTHETIC BLOOD INTERNATIONAL, INC.
                          (A Development Stage Company)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

 Except for the historical information contained herein, the following
 discussion contains forward-looking statements that involve risks and
 uncertainties. The Company's actual results could differ materially from those
 projected in the forward-looking statements. Factors that could cause or
 contribute to such differences include, but are not limited to, those discussed
 in this section and those discussed in the Company's Annual Report on Form 10K.

 Potential risks and uncertainties include, but are not limited to: an inability
 to achieve results from the pre-clinical studies which are determined to merit
 requesting FDA approval to begin clinical trials for one of more of the
 Company's products; an inability to receive FDA approval to begin clinical
 trials for one or more of its products; an inability to enter into or maintain
 the future strategic collaborative relationships the Company believes are
 essential to further develop and commercialize the Company's products;
 uncertainties associated with the lengthy and complicated testing and
 regulatory approval process, in particular the risk that the Company's products
 may be found ineffective or unsafe during clinical trials, if any, or the
 Company is unable to obtain the necessary regulatory approvals to commercialize
 these products; uncertainties associated with obtaining and enforcing patents
 for the Company's products and technology, the risks of infringing patents held
 by other parties; uncertainties associated with changing or new technology;
 difficulties in scaling up manufacturing operations to commercial levels and in
 obtaining raw materials in quantity and at prices necessary to produce
 profitable products; an inability to have the Company's products manufactured
 by future strategic partners or contract manufacturing companies; and failure
 to obtain market acceptance, significant market share, or third party
 reimbursement at profitable price levels.

 Significant risks and uncertainties are associated with the Company's ability
 to obtain the required financing to develop its products. The Company's
 projected capital requirements are based on the expectation that strategic
 partners will assume further development and regulatory costs for each product
 during Phase II clinical trials if one or more of the Company's products
 progress to that level. If that does not happen, the amount of financing the
 Company will be required to raise could increase substantially. If the Company
 is unable to raise adequate financing, it may be required to delay, scale-back,
 or eliminate one or more product development programs, or sell the rights to
 certain technologies or products.


RESULTS OF OPERATIONS

Three months ended January 31, 2000 and 1999:
--------------------------------------------

The Research and Development expenses for the three month period ended January
31, 2000 were $69,764, compared to $42,173 for the same period in the prior
year. This increase is attributed due to an increase in salaries and contract
wages of $27,400 due to increased research activity during the period.

                                       7
<PAGE>

General and Administrative expenses for the three month period ended January 31,
2000 were $109,330, compared to $117,507 for the same period in the prior year.
This was the result of current period administrative salaries decreasing
$18,000. This decrease is partially offset by increases in various other general
operating expenses of $10,000.

The net loss for the three months ended January 31, 2000 was $181,672, compared
to $151,948 for the same period in the prior year. This increase is the result
of increased research and development expenses discussed above.

Nine months ended January 31, 2000 and 1999:
-------------------------------------------

The Research and Development expenses for the nine month period ended January
31, 2000 were $140,007 compared to $99,795 for the same period in the prior
year. This increase is due primarily to an increase in research activity causing
an increase in salaries and contract wages of $48,300.

General and Administrative expenses for the nine month period ended January 31,
2000 were $456,090, compared to $525,221for the same period in the prior year.
During the current period wages, consulting and contract labor decreased by
$91,200 over the same period in the prior year. This decrease was offset by an
increase in office expenses of $21,400 relating to the set up of a California
location during the current year.

The net loss for the nine months ended January 31, 2000 was $580,245, compared
to $617,013 for the same period in the prior year. Total expenses were down
$32,500 for the current period and during the current period the Company
realized an increase in other income of $15,000 due to a vendor settlement.


LIQUIDITY AND CAPITAL RESOURCES

The Company has financed its operations since September 1990, when the current
management became involved, through the issuance of debt and equity securities
and loans from stockholders. As of January 31, 2000 the Company had $115,440 in
total current assets and a working capital deficit of $432,415.

The Company is in the pre-clinical trial stage in the development of its
products. These products must undergo further development and testing and
achieve certain desired results prior to submission to the FDA for approval to
begin clinical trials, and thereafter to market its products. This additional
development and testing and, if approved, the FDA required clinical testing will
require significant additional financing. Management is actively pursuing
strategic alliance and joint venture agreements to enable the Company to develop
its products.

There can be no assurance that FDA approval will be granted, if and when it is
applied for one or more of the Company's products, or that necessary funding
will be obtained. Except for the stock subscription and 3,600,000 shares of
common stock sold subsequent to January 31, 2000 as described in Note 2, the
Company does not have any firm commitments for additional capital as of January
31, 2000.

                                       8
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Company has no derivative financial instruments and no exposure to foreign
currency exchange rates or interest rate risk.

                                       9
<PAGE>

                       SYNTHETIC BLOOD INTERNATIONAL, INC.
                          (A Development Stage Company)

                            PART II-OTHER INFORMATION

Item 1.  Legal Proceedings.
           None

Item 2.  Changes in Securities.

           In November 1999, December 1999 and January 2000 the Company
           issued 468,750, 317,500 and 145,000 shares of common stock,
           respectively, at $.08 per share to ten individuals were.

           Subsequent to January 31, 2000 the Company issued 3,600,000
           shares of the Company's common stock to non-U.S. persons for
           $.28 per share.

           The registrant relied upon the exemptions provided by Section
           4 (2) and Regulation S of the Securities Act of 1933 to issue
           the common stock and grant the options.

Item 3.  Defaults Upon Senior Securities.
           None

Item 4.  Submission of Matter to a Vote of Security Holders.
           None

Item 5.  Other Information
           None

Item 6.  Exhibits and Reports on Form 8-K.

             The Company filed Form 8-K on July 9, 1999 informing the
             Commission of a change in corporate auditors.




Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                      SYNTHETIC BLOOD INTERNATIONAL, INC.
                                   -----------------------------------------
                                                (Registrant)

   3/16/00                                /s/  DAVID H. JOHNSON
---------------                    -----------------------------------------
   (Date)                         David H. Johnson, Chief Financial Officer

                                       10