Brake Headquarters USA, Inc. Announces Reorganization Plan for Two of Its Subsidiaries Under the U.S. Bankruptcy Laws; Company Continues to Consolidate Operations.

Business Editors

PERTH AMBOY, N.J.--(BUSINESS WIRE)--March 21, 2000

Brake Headquarters U.S.A., Inc. (OTC: BHQU) (the "Company", or "Brake") announced today that two of its subsidiaries, Sanyo Automotive Parts, Ltd. ("Sanyo") and ABS Brakes, Inc. ("ABS"), have filed a Plan of Reorganization under Chapter 11 of the United States Bankruptcy Code. Sanyo and ABS each sought protection under Chapter 11 on May 28, 1999. The Joint Plan, if confirmed by the United States Bankruptcy Court presiding over the cases, will resolve the outstanding claims against Sanyo and ABS and will eliminate more than $8 million of debt. The Plan of Reorganization provides for, among other things, the unsecured creditors of the two subsidiaries to receive warrants to purchase 25% of the issued and outstanding stock of the Company, at $.25 per share. The unsecured creditors will also have one seat on the Company's Board of Directors. The implementation of the reorganization plan will not affect the parent Company's operations and those of its California based subsidiary, WAWD, Inc.

Brake's subsidiaries are continuing to significantly reduce fixed overhead, as well as selling, general and administrative expenses, in order to consolidate operations, and improve internal efficiency. Over the past several months, the subsidiaries reduced their operating facilities, from seven (7) to three (3), returning to a master warehouse concept concentrating a majority of its operations at their 106,000 square foot distribution center and corporate headquarters in Perth Amboy, New Jersey. Brake is continuing to focus its efforts on the growth of sales of its higher margin product lines.

Founded in 1976, Brake Headquarters USA, Inc. is a wholesaler and distributor of automotive brake system products and other component parts for domestic and foreign cars and light trucks.

This release contains certain forward-looking statements which involve known and unknown risks, uncertainties, and other factors not under the Company's control which may cause actual results, performance, and achievements of the Company to be materially different from the results, performance or expectations of the Company. These factors may include, but are not limited to, the Company's ability to successfully implement the plan of reorganization of its subsidiaries and to have them emerge from bankruptcy; its ability to consolidate and reduce the Company's overhead; intense competition; the Company's dependence on the automotive industry, which is cyclical; historical decreases in internal growth rates; the Company's ability to manage growth; and other risks detailed in the Company's periodic filings with the Securities and Exchange Commission.