Skystar Bio-Pharmaceutical Announces $5 Million Registered Direct Offering

XI'AN, CHINA--(Marketwired - Jul 16, 2014) - Skystar Bio-Pharmaceutical Company (NASDAQ: SKBI), a China-based manufacturer and distributor of veterinary medicine, vaccines, micro-organisms and feed additives, today announces that it has entered into a definitive agreement with a dedicated healthcare institutional investor to purchase an aggregate of $5,000,000 of registered securities of the Company in a registered direct offering. Pursuant to the terms of the agreement, the investor shall purchase from the Company 790,514 shares of common stock and warrants to purchase up to 197,629 shares of common stock for an aggregate purchase price of $4,000,000 and 1,000 shares of convertible preferred stock and warrants to purchase up to 49,407 shares of common stock for an aggregate purchase price of $1,000,000.

The shares of common stock have a purchase price of $5.06 per share. The convertible preferred stock has an aggregate stated value of $1,000,000 and a conversion price of $5.06 and carries no dividend rights. The investor shall receive warrants to purchase up to an aggregate of 247,036 shares of common stock with an exercise price of $6.25 per share, which warrants will be exercisable six months following issuance and will expire twelve months from the initial exercise date.

The Company shall use a portion of the proceeds of the offering for acquisitions, licenses of new vaccine and aquaculture products, research & development and other general corporate purposes.

The closing of the offering is expected to take place on or about July 21, 2014, subject to the satisfaction of customary closing conditions.

H.C. Wainwright & Co., LLC acted as the exclusive placement agent in connection with this offering.

The shares of common stock, shares of convertible preferred stock, and warrants described above are being offered by the Company pursuant to a shelf registration statement (File No. 333-192657) which became effective on December 18, 2013. The securities may be offered only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein. There shall not be any offer, solicitation of an offer to buy, or sale of securities in any state or jurisdiction in which such an offering, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. The Company will file a prospectus supplement with the SEC relating to the common stock, convertible preferred stock and warrants, and following such filing, copies of the prospectus supplement and the accompanying base prospectus relating to this offering may be obtained at the SEC's website at http://www.sec.gov, or from H.C. Wainwright & Co., LLC by e-mailing placements@hcwco.com.

About Skystar Bio-Pharmaceutical Company

Skystar is a China-based developer, manufacturer and distributor of veterinary healthcare and medical care products. Skystar has four product lines: veterinary medicines, probiotics, vaccines and feed additives formulated and packaged in house across several modern manufacturing and distributions facilities. Skystar's distribution network includes almost 3,000 distribution agents of which 360 are franchised stores with exclusivity agreements covering 29 provinces throughout China. For additional information, please visit http://www.skystarbio-pharmaceutical.com.

Safe Harbor Statements

Statements contained herein that are not based upon current or historical fact are forward-looking in nature. Such forward-looking statements reflect the Company's expectations about its future operating results, performance and opportunities that involve substantial risks and uncertainties. When used herein, the words "anticipate," "believe," "estimate," "upcoming," "plan," "intend" and "expect" and similar expressions, as they relate to Skystar, or its management, are intended to identify such forward-looking statements. These forward-looking statements are based on information currently available to the Company and are subject to a number of risks, uncertainties, and other factors that could cause the Company's actual results, performance, prospects, and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the possibility that the closing conditions to the offering will not be satisfied, the risk that the offering might not be completed on the expected timeline or at all, the risk that the Company will raise fewer proceeds than expected, the risk that economic and other considerations will cause the Company to use the proceeds of the offering other than as currently expected, and such other factors, including risk factors, discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 and subsequent public filings. Except as otherwise may be required under the law, the Company does not undertake any obligation to release publicly any revisions to any forward-looking statements.