Hot Brands Signs Letter of Intent to Acquire Production, Land and Aquifer Assets of Independent Water Group.

Business Editors

HOLT, Mich.--(BUSINESS WIRE)--April 12, 2004

Hot Brands, Inc. (Pink Sheets:HTBI) announced today the signing of a Letter of Intent to acquire certain assets of Independent Water Group, Inc. by Enhanced Beverage Company, Inc. ("EBCI"), a wholly owned subsidiary of Hot Brands, Inc.

Independent Water Group, Inc. owns the assets of Greyson Springs Water Company, established in the mid-1980s. In 2001, Greyson was generating approximately $18 million in revenue processing and bottling water before experiencing financial trouble and being acquired by the Independent Water Group, Inc. The assets to be acquired by EBCI include intellectual property, production and warehouse facilities, 50 acres of land, and the unrestricted use of the aquifer on the property. The assets are free of any liabilities and liens.

Mr. William Curtis, Chairman of Hot Brands, Inc., stated that: "Hot Brands and its management are excited about this potential acquisition in a $8 billion and growing beverage sector. The assets intended to be acquired are at a distressed value and will quickly add shareholder value by establishing an experienced sales and operational team to use available production capacity. We are already planning to actively pursue other acquisition opportunities in this sector as Enhanced Beverage Company moves forward."

Independent Water Group currently uses its production facility to provide contract bottling services. The existing facility consists of two (2) 4,000 square foot buildings. One building houses the existing production equipment and the other is used for raw material and finished goods storage. The current capacity of the plant is approximately 72,000 cases per month, per shift, of operation for a operation capacity of 210,000 cases per month.

According to industry sources, the bottled water and value added enhanced beverage business is approaching $8 billion annually in North America and the water category is predicted to double within the next three to four years. This growing demand provides for two primary types of sales for Enhanced Beverage Company, contract bottling and branded products.

Hot Brands, Inc. and the management of Enhanced Beverage Company intends to pursue the development of its own water brands and seek out licenses to further expand contract packing. The first proprietary product, currently under design, will target the sports drink market. This product will compete with Gatorade(TM), Powerade(TM), All Sport(R), and other similar-type products.

HTBI is determined to re-structure, enhance management, infuse new capital and grow the Enhanced Beverage Company acquisition into a recognized, growing, value-added, product line. New capital will be used to:

1. Ramp up the existing operation;

2. Expand the contract packing services;

3. Expand the sales and marketing of proprietary products; and

4. Modernize operations into a state-of-the-art enhanced beverage production facility.

Hot Brands mission is to acquire distressed opportunities and build them into a portfolio of diversified businesses focused on growth. We intend to accomplish this by investing new capital and management expertise to increase revenues and shareholder value.

Currently, Hot Brands' wholly owned subsidiary Hot Brands, LLC operates 21 Hot 'N' Now Burgers fast food restaurants in Michigan and Wisconsin of which 3 are Company owned and 18 are franchised. Hot 'N' Now Burgers serves over 245,000 customers on a monthly basis.

Except for the historical information presented, the above statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 or regulations there under. These forward-looking statements are subject to risks and uncertainties, and actual results may differ materially. These risks include the economic health of the restaurant and fast-food industries, competitive pricing pressures, completion of planned acquisitions and success at integrating and operating the acquired operations and the availability of necessary financing. These statements speak only as of above date, and Hot Brands, Inc. disclaims any intent or obligation to update them.