Exhibit 99.1                                                       Press Release

              Advanced Nutraceuticals, Inc. Announces Completion of
         New $5.5 Million Credit Facility with CapitalSource Finance LLC
         ---------------------------------------------------------------


Denver,  CO,  March 26, 2003 - Advanced  Nutraceuticals,  Inc.  (NASDAQ:  ANII),
announced  today that it completed the  refinancing  of its Senior Debt Facility
with CapitalSource  Finance LLC. The collateralized  debt agreement provides the
Company with a $5.5 million facility,  consisting of a $4.0 million revolver,  a
$1.0 million equipment term loan and a $500,000 equipment acquisition line.

Mr. Greg Pusey,  President of ANII, stated, "ANII has taken a large step forward
in getting this  long-term  facility in place,  which will help the Company with
its  liquidity and financial  position.  Management  can now focus its undivided
attention on improving profitability".

"CapitalSource  is pleased to  provide a new debt  structure  for ANII that will
enable  management's  ability to continue to improve its business  fundamentals.
We're confident that ANII's strong management team,  strong customer  relations,
and  enhanced  liquidity  will combine to drive the  business,"  said Joe Kenary
Managing Director, Corporate Finance at CapitalSource.

BCL Partners of Houston, Texas, represented ANII in securing the loan facility.

ANII  is  a  holding   company  with  two   operating   subsidiaries,   Bactolac
Pharmaceutical Inc., ("Bactolac") and ANI Pharmaceuticals, Inc. (ANIP). Bactolac
is a successful  manufacturer of vitamins and supplements that has grown rapidly
since its inception and has been consistently profitable. ANIP is a contract and
private label manufacturer of over-the-counter  liquid and powder pharmaceutical
products, primarily liquid stomach remedies.

ANIP has incurred significant losses, but has recently  experienced  substantial
improvement in its bookings and sales. While management remains optimistic about
ANIP's future prospects, ANIP continues to incur losses as current monthly sales
levels are still below amounts  required to  break-even  at current  margins and
product mix.  Management  continues to closely  monitor the  performance of this
subsidiary, while exploring possible alternative strategic opportunities to best
enhance the performance and value of the Company.


About CapitalSource Finance LLC:

Headquartered in Chevy Chase, MD, CapitalSource is a national commercial finance
company  offering a range of  financing  solutions  to  middle-market  and small
business  clients.  CapitalSource  provides  asset-based,  senior and  mezzanine
financing  ranging  from $1  million  to $50  million  to  small  and  mid-sized
borrowers  through three focused lending units:  Corporate  Finance,  Healthcare
Finance,  and Structured  Finance.  CapitalSource  has $2 Billion in commitments
issued   and   more   than   200   employees.   For   more   information   visit
www.capitalsource.com or call toll free 866-876-8723.




For additional information contact:

Jeff McGonegal (303) 475-3786 (Email: jmcgonegal@anii.cc) or
Gregory Pusey (303) 722-4008 (Email: gpusey@anii.cc)

- --------------------------------------------------------------------------------

This press  release  includes  "forward  looking  statements"  as defined by the
Securities  and Exchange  Commission  (the "SEC").  All  statements,  other than
statements  of  historical  fact,  included in the press  release  that  address
activities, events or developments that the Company believes or anticipates will
or may occur in the future are forward-looking statements.  These statements are
based  on  certain  assumptions  made  based  on  experience,   expected  future
developments   and  other   factors  ANII  believes  are   appropriate   in  the
circumstances. Such statements are subject to a number of assumptions, risks and
uncertainties,  many of which are beyond  the  control  of ANII.  Investors  are
cautioned that any such  statements  are not  guarantees of future  performance.
Actual results or developments may differ materially from those projected in the
forward-looking  statements  as a  result  of many  factors,  including  adverse
changes in market  conditions,  fluctuations  in sales  volumes and  problems in
collecting receivables. Furthermore, ANII does not intend (and is not obligated)
to update publicly any forward-looking  statements. The contents of this release
should be considered in conjunction with the warnings and cautionary  statements
contained in the Company's recent filings with the SEC.