CoolBrands Closes Previously Announced Sale of its Dairy Ingredients Division

Gross proceeds from the sale will be approximately US$9 million and net proceeds after paying expenses related to closing will be used to repay a portion of CoolBrands' borrowings.

18/09/06 CoolBrands International Inc. announced that its subsidiary, Eskimo Pie Corporation, has closed the previously announced sale of its Value America flavors and ingredients division, a division of CoolBrands that manufactures and sells a full line of quality flavors, chocolate coatings, fudge sauces, powders for chocolate milk, eggnog bases and other ingredients, to a leading inventor and marketer of specialty flavors for the ice cream industry. Gross proceeds from the sale will be approximately US$9 million and net proceeds after paying expenses related to closing will be used to repay a portion of CoolBrands' borrowings.

CoolBrands also announced that a lawsuit has been filed in the Supreme Court of the State of New York against it and certain of its subsidiaries and employees by Americana Foods Corporation in relation to Americana Foods L.P., a manufacturer and supplier of packaged ice cream, frozen yogurt and other frozen dessert products. CoolBrands is the general partner of and indirectly owns a 50.1% interest in Americana Foods L.P. Americana Foods Corporation, which owns a 49.9% interest in Americana Foods L.P., is seeking monetary damages, certain declaratory orders and injunctive relief based on an alleged erosion of the value of its investment.

In addition, CoolBrands and those persons who were directors of CoolBrands in July 2004 have been named as defendants in a lawsuit filed in the Ontario Superior Court by two plaintiffs against their broker. The plaintiffs allege that their broker made unauthorized purchases on their behalf of an unspecified number of CoolBrands shares, and that the actions of their broker and CoolBrands and its directors contributed to their loss.

CoolBrands intends to vigorously defend the two lawsuits. CoolBrands continues its efforts to explore all strategic alternatives available to the Company to create liquidity and maximize value for shareholders, although there is no assurance that any particular transaction will be consummated in a timely manner or at all.