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AOB currently expects to use approximately $30 million of the proceedsfrom the offering to repurchase shares of its common stock pursuant to aprepaid forward share repurchase transaction with an affiliate of theplacement agent, as counterparty. AOB expects to use the remaining netproceeds from the offering for general corporate purposes, including forworking capital purposes and to fund possible acquisitions of and investmentsin complementary businesses and products. In connection with the prepaidforward repurchase transaction, AOB has been advised that the counter partymay enter into various derivative transactions or purchase or sell shares ofAOB's common stock concurrently with or following the offering of theconvertible notes. The counterparty has also advised AOB that it may enterinto, or unwind, various derivatives or purchase or sell shares of AOB'scommon stock in secondary-market transactions following the offering of theconvertible notes. These activities may have the effect of increasing, orpreventing a decline in, the market price of AOB's common stock concurrentlywith or following the offering of the convertible notes. In addition, anyhedging transactions by the counterparty following the offering of theconvertible notes may have an adverse impact on the trading price of AOB'scommon stock and the value of the convertible notes.
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This announcement does not constitute an offer to sell or the solicitationof an offer to buy securities (including the shares into which the notes areconvertible). Any offers of the securities will be made only by means of aprivate placement memorandum. The convertible notes and the shares of commonstock issuable upon conversion of the convertible notes have not been, andwill not be, registered under the Securities Act or the securities laws of anyother jurisdiction and may not be offered or sold in the United States absentregistration or an applicable exemption from registration requirements.
Cautionary Statement:
The statements in this release relating to the terms and timing of theproposed offering and the expected use of proceeds from the offering areforward-looking statements made pursuant to the safe harbor provisions of thePrivate Securities Litigation Reform Act of 1995. These statements involverisks and uncertainties that could cause actual results to differ materially,including, but not limited to, whether or not AOB will offer the notes orconsummate the offering, the final terms of the offering, prevailing marketconditions, the anticipated principal amount of the notes which could differbased upon market conditions, the anticipated use of the proceeds of theoffering which could change as a result of market conditions or for otherreasons, the fact that future share repurchases will depend upon marketconditions, interest rates and corporate considerations and the impact ofgeneral economic, industry or political conditions in the United States orinternationally.
Shareholders of AOB are cautioned not to place undue reliance on itsforward-looking statements, which speak only as of the date such statementsare made. AOB does not undertake any obligation to publicly update anyforward-looking statements to reflect events, circumstances or new informationafter this July 7, 2008 press release, or to reflect the occurrence ofunanticipated events.
About American Oriental Bioengineering
American Oriental Bioengineering (NYSE: AOB) is a pharmaceutical companydedicated to improving health
