Tropical Beverage Agrees to Service More Than 150 California School Districts

Company Anticipates Sales of $5 Million in First Year

Tropical Beverage Inc., a manufacturer and distributor of value-added water-based beverages, has reached a distribution agreement with a major distributor in the southern California region. This distributor services more than 150 school districts currently and is anticipated to increase Tropical's revenues by $5 million in 2004. Initial shipments are expected shortly.

Under the terms of the agreement, Tropical will produce water with an advanced electrolyte formula which is SB-19 approved as part of the new regulations set forth by the Los Angeles Unified School District (LAUSD) intended to curb obesity in children. The company estimates initial orders of 15,000 cases per month of its advanced electrolyte formula and approximately 55,000 cases of water per month.

"This agreement positions us to significantly increase our production volume and gives us access to a large and lucrative audience based on our electrolyte formula which has been developed with the LAUSD in mind," said Chris Lotito, chief financial officer of Tropical Beverage. "We believe this relationship will generate substantial revenues to our bottom line as we continue to build shareholder value."

Lotito indicated Tropical's electrolyte product received "rave reviews" at a recent school buyer product showcase. "With our new product line receiving outstanding response, we believe there's a tremendous opportunity to build further sales," Lotito said.

Tropical Beverage Inc.

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