Steven H. Rouhandeh, Chairman of SmallCaps stated, "We are extremely pleased to be initiating coverage of AMBI and Cypress Bioscience at this time. We at SmallCaps are focused on identifying emerging growth companies in the healthcare and information technology sectors that we feel offer compelling investment opportunities over the long term. By providing comprehensive financial services, including corporate finance, M&A advisory, strategic partnering and communications, we feel we are well positioned to provide a fully integrated package of value-added services to emerging growth companies."

"From an investment research perspective," stated Jeffrey B. Davis, President of SmallCaps, "we are focused on identifying high-quality companies with strong growth prospects. In this difficult market environment, we feel there are very good companies trading at low valuations, having been orphaned, oversold, or otherwise ignored by the investment community. We intend to select the most exciting of these investment stories and work diligently to increase their visibility."

SmallCaps also announced the recent appointment of Jennifer LaVin as Vice President. Ms. LaVin was most recently Director of Corporate Communications at Cadus Pharmaceutical Corporation (Nasdaq: KDUS) and prior to that served as an Assistant Vice President at Merrill Lynch & Co. (NYSE: MER) where she was an equity analyst following the mid-cap and specialty drug stocks. Ms. LaVin has a BA in Biochemistry from the University of Pennsylvania and an MBA in International Business, Management and Marketing from Columbia Business School.

Excerpts from SmallCaps' in-depth basic reports follow. For full-length copies of these reports, please visit SmallCaps' web site at www.SmallCapsOnline.com or call 212-554-4158.

AMBI Inc.
AMBI is executing an innovative and profitable growth strategy: developing and commercializing nutritional products for cardiovascular, diabetic and other medical conditions. Its products are proprietary, and are put through pharmaceutical-like clinical trials to demonstrate

efficacy and safety. The Company has recently announced two "transforming" strategic alliances with American Home Products (NYSE: AHP) and Cultor Food Science, Inc., a private company, that validate AMBI's strategy, provide the Company with national retail and ingredient distribution for its CardiaNutrition and other products, strengthen the balance sheet, and position the Company for future growth. We believe AMBI's strategic and financial turnaround is completed and the company is poised for growth: In FY98, AMBI earned $1.1 million in net income and more than $3.0 million in EBITDA, and management expects to net over $1.0 million for 1Q99 (ended September 30, 1998).

Compelling Valuation at Current Levels: We believe AMBI's strategy and investment case is not widely understood or appreciated by the investment community, with low institutional ownership and limited research sponsorship. AMBI trades at a significant discount to other small-cap healthcare companies and at multiples below that of other nutritional companies. We look for a 12 to 18 month price target of $4 to $5 per share.

Unique Aggressive Growth Strategy in High Growth Industry: Experts currently estimate the US nutritional supplements market to be over $10 billion, with anticipated growth rates of over 15% for the next several years. We believe AMBI's proprietary nutritional products should afford AMBI pricing power and higher, pharmaceutical-like margins, a characteristic that distinguishes AMBI from other nutritional products companies that have suffered from recent price competition. In addition, due to the fact that AMBI performs clinical studies on its proprietary nutritional products, we believe the company will be able to establish credibility among industry opinion leaders and that this should result in increased demand for AMBI's products.

Experienced Management - Credible Execution: Fredric D. Price, AMBI's President and CEO, has assembled a strong management team with significant pharmaceutical, corporate finance and marketing experience. We feel that AMBI's recent AHP and Cultor alliances, as well as the 1997 purchase and integration of Nutrition 21, are indicative of management's ability to execute its strategy effectively.

Cypress Bioscience, Inc.
Cypress Bioscience, Inc. ("CYPB") develops, manufactures and markets medical devices and therapeutics for certain types of immune diseases and is engaged in the development of a novel blood platelet substitute. CYPB is currently awaiting FDA review of its completed PMA submission for the Prosorba® column for Rheumatoid Arthritis ("RA"), and recently announced that the FDA will review this submission at an October 29, 1998 Advisory Panel meeting. The Prosorba® column is already on the market to treat idiopathic thrombocytopenic purpura (ITP), an immune disorder where platelets are depleted, and has a proven safety profile. We believe there are several key milestones over the next several months that could positively affect CYPB's share price. We also believe CYPB is undervalued based on Prosorba® for RA alone, without regard for the significant potential of its Cyplex technology, and are recommending purchase for investors tolerant of risks associated with small-cap and micro-cap investments.

Valuation and Timing: We believe CYPB shares offer very good value at current levels based on the potential for Prosorba® for RA alone; likely milestones in 1998 should positively affect institutional interest, Wall Street sponsorship and, ultimately, the share price. We have a 12-month target price range of $5 to $7 per share.

Prosorba® for RA: Following what we believe will be a positive recommendation from the FDA Advisory Committee meeting October 29, we believe CYPB will receive FDA approval for Prosorba® for RA by the end of 1998. We estimate that the US target market alone represents a $2 billion opportunity. The Company is actively seeking alliances with marketing partners for Prosorba® for RA. We believe the Company will establish one or more such alliances this year.

Diversifying Technology Base - Cyplex Product ; CYPB has an active corporate development effort aimed at identifying and acquiring or in-licensing synergistic products and technologies to broaden its portfolio. In 1997, CYPB acquired Cyplex, a substitute for traditional platelet transfusions. We estimate the potential US market for this product is approximately $600 million.

Strong Management Team: Since taking over two years ago, Dr. Jay Kranzler, Chairman & CEO, and Dr. Debby Jo Blank, President & COO, have been taking the appropriate steps to drive shareholder value. We believe patient investors are soon to be rewarded.