Auxer Further Discusses Reverse Stock Split and Offer of Stock Conversion.

Business Editors

TRAVERSE CITY, Mich.--(BUSINESS WIRE)--May 20, 2003

THE AUXER GROUP, INC. (OTCBB:AXGI) today released additional information and statements discussing the reverse stock split and the offer of stock conversion.

Robert Scott, President and CEO of Auxer, stated, "We have been surprised at the large negative reaction to the announcement of the reverse stock split. Basically, a stock split or a reverse stock split should not effect the overall dollar value of a stockholder's holdings. However, by increasing or decreasing the number of shares outstanding, the dollar value or price per share should adjust in relation to the pre-stock split price per share."

"If you introduce emotion and/or fear into the equation combined with the volatile nature of Auxer stock and or its shareholders, it is understandable that dramatically different results occurred."

"The reverse is necessary for the following reasons: to assist the Company in acquiring or leasing assets via a combination of debt and equity financing, to increase price per share as a precursor to possible listing on the BBX or in preparation for an eventual application for NASDAQ small cap, to reduce the number of outstanding shares during our conversion of Viva from a development stage company to an operating concern and to possibly encourage some institutional investment. All of these items are designed to encourage and to create fundamental long-term value. Management believes that by pursuing the fundamentals of our business, shareholder value is best enhanced."

Discussing the stock conversion, Mr. Scott said, "We are offering an alternative to those investors who do not wish be subject to the reverse split. Accordingly, the Company is offering to convert, upon request, 1,000 shares of common stock for 1 share of preferred stock. The common shares will be valued for conversion purposes at .01 per share. Accordingly, the preferred stock will have a face value of $10 per share. The company will pay dividends of 10% per annum with the dividends to be paid semi-annually. The preferred shares will be non-trading and after a 1 year holding period can be converted back into common. For purposes of a conversion back to common shares, the preferred face value of $10 per share will be assigned a value of $11 per share prior to its conversion. This conversion back to common shares will be executed at the market value existing at the time of conversion. For example, if at the time of conversion back to common, the Company's stock is trading at $2.75 per share, the conversion ratio back to common would be 4 shares of common for each share of preferred stock. The preferred shareholders will not be required to convert their stock back into common. All common shareholders will receive the formal exchange offer, in the near future, setting forth all the terms and conditions of the offering as well as an application for conversion.

Mr. Scott stated further, "We are preparing the Company for the start of Viva as well as looking to its future. This is an exciting time for the Company. We will continue to keep our shareholders, the investment community and the public informed as to our progress and accordingly, seek their support."

Forward-looking statements in this news release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, continued acceptance of the Company's products, competition, new products, and technological changes, intellectual property rights, regulatory uncertainties and other risks.