CONTACT:
Jeffrey B. Davis
SmallCaps Online LLC
(212) 554-4158 (phone)
(212) 554-4058 (fax)
info@SmallCapsOnline.com

SmallCaps Online LLC Reiterates BUY on AMBI Inc. Following Meeting with Management

Visit SmallCaps Online’s Web Site at www.SmallCapsOnline.com for Detailed Report

New York, NY, June 21, 1999 — SmallCaps Online LLC (formerly SmallCaps Online LLC) today reiterated its BUY recommendation on AMBI Inc. (Nasdaq: AMBI) following a meeting with management that outlined AMBI’s e-commerce strategy. The full text of this report can be accessed at SmallCaps Online’s web site, at www.SmallCapsOnline.com.

Excerpts from the report follow:

We met recently with senior management at AMBI and reviewed the upcoming launch of new products and product configurations (or nutritional product kits addressing specific therapeutic needs), and, most interestingly, AMBI’s plans to leverage direct response channels of the Internet, QVC and its Heart’s Content catalog. We are extremely optimistic about their "e-commerce" operations, which currently represent roughly 25% of AMBI’s business (and is profitable and growing), and anticipate further corporate announcements as this channel opportunity develops for the company. We reiterate our BUY recommendation.

The Importance of e-Commerce: The Internet and broadband cable TV platforms are converging. This "Convergence" of the broadband cable TV infrastructure and the Internet backbone will provide an extremely robust conduit through which a broad range of producers of products and services will dramatically change the way consumers shop, among other things. We believe the Internet (and e-commerce generally) is a sales channel of tremendous importance, which lends itself well to companies with products and strategies like AMBI. As discussed in earlier reports, AMBI’s proprietary products have been put through pharmaceutical-like clinical trials, the results of which have been published in prominent, peer-reviewed journals and presented at leading scientific meetings. The Internet, specifically AMBI’s websites, provide the medium from which consumers can do research on its products and make informed purchases. For example, AMBI has made certain of its clinical trials results available on its website, and offers links to other sites that provide additional relevant scientific reports and data (something that can not be easily accomplished in the traditional nutritional product store, or drugstore, sales — Retail Shelf — channel).

We believe an effective e-commerce strategy needs all three components of the sales channel — cable TV, the Internet, and direct mail — not just one. AMBI is well positioned today in all three components of the channel (cable TV via QVC, the Internet and direct mail), and is ready to capitalize on the explosive growth in these e-commerce channels:

• Broadband cable television: As a result of the recent acquisition of Lite Bites, AMBI has a relationship with QVC, the premier television shopping channel. AMBI currently sells Lite Bites on QVC and is poised for additional growth in this channel. AMBI is evaluating a special "Heart Healthy" programming segment whereby its products would be showcased within a program dedicated to nutritional well-being.
• Website: AMBI will launch its interactive, e-commerce website (www.CardiaNutrition.com) in late summer or early fall. Like most retailing concerns, AMBI is currently considering alternative websites and co-branding opportunities on the Internet to expand its reach and attract the broadest possible consumer base.
• Direct mail: AMBI will launch its novel catalog, Heart’s Content, also this summer. The catalog (we had the opportunity to review an impressive early draft) is filled with important consumer information about AMBI’s products and the health conditions they address.

AMBI’s established e-commerce strategy offers tremendous marketing and sales channel leverage; as AMBI develops additional proprietary products, it can offer them simultaneously through all three channels (cable TV, the Internet and direct mail) without incurring additional cost. Unlike many competing nutritional product companies, AMBI is already participating in these three e-commerce channels. And unlike many companies executing an e-commerce strategy, AMBI’s are profitable and positioned for growth.

###

SmallCaps Online LLC is a registered investment advisor focused on identifying emerging growth companies in the healthcare and information technology sectors that offer compelling investment opportunities over the long term. By providing comprehensive financial services, including corporate finance, M&A advisory, strategic partnering and communications consulting, the company positions itself to provide a fully integrated package of value-added services to emerging growth companies.

###

The information in this press release has been obtained from sources that SmallCaps Online LLC believes to be reliable, but the Company does not guarantee its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation by SmallCaps Online LLC for the purchase or sale of any securities. SmallCaps Online LLC and/or any of its affiliates has performed investment banking, consulting or other services for AMBI and may solicit investment banking, consulting or other business from, any company mentioned in this release. SmallCaps Online LLC or any of its affiliates or persons associated with SmallCaps Online LLC may at anytime be long or short any of the securities referred to herein and may make purchases or sales thereof while the Company’s reports are in circulation or posted on the SmallCaps Online LLC web site at www.SmallCapsOnline.com. This material, or any portion thereof, may not be reproduced without prior permission from SmallCaps Online LLC. SmallCaps Online LLC is not responsible for the contents of this document that is intended for electronic transmission and could be thus subjected to tampering or alteration. Copyright © 1999 by SmallCaps Online LLC. All rights reserved.