DMR Food Corporation Acquired by Clearly Canadian

DMR Food Corporation Acquired by Clearly Canadian

09 Feb 2007 --- With a growth rate of over 25% per year and a strong presence in Canada's largest grocery chains, Sweet Selections is an ideal complement to Clearly Canadian's brand recognition and established presence in the beverage sector.

09/02/07 Clearly Canadian Beverage Corporation is pleased to announce it has acquired DMR Food Corporation. Operating under the name Sweet Selections, DMR is the leading seller of organic and natural snack foods in Eastern Canada.

"With the recent introduction of our Clearly Canadian Natural Enhanced Waters, including dailyEnergy, dailyVitamin and dailyHydration, a certified organic essence water, this acquisition accelerates our efforts to further establish Clearly Canadian as a provider of healthy, good-for-you, products," said Brent Lokash, President of Clearly Canadian. "We see great upside in Sweet Selection's business over the next several years as retailers are placing a major emphasis on organic and natural products. With a growth rate of over 25% per year and a strong presence in Canada's largest grocery chains, Sweet Selections is an ideal complement to Clearly Canadian's brand recognition and established presence in the beverage sector. This combination creates a host of opportunities to penetrate our key markets and fulfills our stated objective to enter into the complementary snack food market."

Mr. Lokash added, "Our model for growth into the organic and natural foods market is to emulate what Pepsi/Frito Lay has done so well over the years in connecting beverages and snack food. We believe the combination of these two companies will provide a host of strategic opportunities to penetrate this exploding market and create value for our shareholders. Sweet Selections is a fast growing and profitable company. This acquisition will nearly double top line revenues with little immediate dilution to our shareholders."

In connection with the acquisition of Sweet Selections, the Company has paid $450,000 CDN upon closing of the transaction; 3,000,000 warrants to purchase the Company's common shares at a purchase price of US $4.00 per share, provided that if a gain of $2,550,000 CDN is not realized from a sale of the warrants within 1 year from their sale of the warrant shares, the Company will pay any shortfall; and $450,000 CDN payable over 3 years. In addition, the Company has entered into a 3 year consulting agreement to retain the services of Sweet Selection's founder, David Reingold.

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