VIVUS has been advised that, in connection with establishing its initial hedge of the capped call transaction, the hedge counterparty (or its affiliates) expects to purchase VIVUS common stock and/or enter into various derivative transactions with respect to VIVUS's common stock concurrently with, or shortly after, the pricing of the Notes. These activities could have the effect of increasing, or reducing the size of any decrease in, the price of the Notes and/or VIVUS's common stock concurrently with, or shortly after, the pricing of the Notes. In addition, the hedge counterparty (or its affiliates) may modify its hedge position by entering into or unwinding various derivative transactions with respect to VIVUS's common stock and/or by purchasing or selling VIVUS's common stock or other of its securities in secondary market transactions following the pricing of the Notes and prior to the maturity date for the Notes (and is likely to do so during any conversion period related to a conversion of the Notes). This activity could also cause or avoid an increase or a decrease in the market price of VIVUS's common stock or the Notes, which could affect the ability of holders of the Notes to convert the Notes and, to the extent the activity occurs during any conversion period related to a conversion of Notes, it could affect the amount and value of the consideration that holders of the Notes receive upon any conversion of the Notes.
The offering, which is expected to commence immediately, will be to qualified institutional buyers pursuant to Rule 144A under the Securities Act. Neither the Notes nor any shares of VIVUS's common stock issuable upon conversion of the Notes have been or are expected to be registered under the Securities Act or under any state securities laws and, unless so registered, may not be offered or sold in the United States or to U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, these securities, nor will there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale is not permitted.