AMBI Revises Terms of Convertible Preferred Stock Agreements; Company Also Announces That Public Warrants Expired.

TARRYTOWN, N.Y.--(BW HealthWire)--Dec. 8, 1997--AMBI Inc. (Nasdaq: AMBI) announced that it had revised the terms of its convertible preferred stock agreements, and that its publicly traded warrants had expired. AMBI indicated that the net effect of the revised agreements and the expiration of the public warrants is that the Company has reduced the potential dilution for current shareholders of AMBI common stock.

Under the revised stock agreements, the 4 shareholders of the Company's $4.5 million Series D Preferred Stock, issued on May 12, 1997, converted one half of their holdings into AMBI common stock and agreed not to convert the remaining half of their holdings for 6 months. In 6 months, the Company has the option to redeem the then remaining convertible preferred stock for cash. No additional Series D Preferred Stock will be issued to the Series D investors; this supersedes a prior agreement that contemplated the possible purchase by these investors of up to $3.5 million of additional Series D shares.

AMBI also announced that the 2 shareholders who own the remaining $2.2 million of the Company's Series C Preferred Stock, issued on October 20, 1995, agreed not to convert their holdings for a period of 6 months. The Company also has the option to redeem the outstanding Series C Preferred Stock for cash.

The now-expired public warrants had previously afforded to holders the right to purchase 818,282 shares of AMBI common stock at $4.91 per share. These warrants were issued as part of AMBI's Initial Public Offering in 1986. They expired on November 30, 1997 and had traded under the Nasdaq symbol AMBIW.

Fredric D. Price, AMBI's President and Chief Executive Officer, said, "These transactions to reduce dilution are particularly significant in light of the Company's expectation that it will shortly achieve profitability. We are on target both with our strategic plan and our operational programs. Revenues from proprietary nutrition products are in line with expectations, nutrition new product development programs are on track, expenses have been reduced throughout the Company from the levels incurred in the last fiscal year, and important progress in our infectious disease drug development programs in both human subjects and in animal trials has been made."

AMBI develops and commercializes nutrition products for cardiovascular and other conditions and develops pharmaceuticals for serious infectious diseases.

The statements in this press release that are not historical facts are forward-looking statements based upon current expectations. Such forward-looking statements involve risks and uncertainties, including risks and uncertainties set forth in "Risk Factors" and elsewhere in AMBI's Registration Statement on Form S-3 and the Prospectus dated June 27, 1997 and AMBI's Form 10-K for the year ended June 30, 1997. Actual results and timing of certain events could differ materially from those indicated in the forward-looking statements as a result of these and other factors.

CONTACT: AMBI Investor Relations, 914/345-6888

or

StartUp Solutions LLC 

Steve Rouhandeh, 212/554-4158

or

The Investor Relations Group

Dian Griesel, PhD, 212/664-8489