Company Intends to Become Pure-Play Beverage Company and Focus on the Growth of Its New Leaf Tea Brand in the Burgeoning Beverage Market

SCOTTSDALE, Ariz., July 30, 2009 (GLOBE NEWSWIRE) -- Baywood International, Inc. (OTCBB:BAYW) (the "Company") announced today that it has entered into a definitive agreement to sell the assets of its wholly-owned subsidiary, Nutritional Specialties, Inc./dba LifeTime(r) or LifeTime(r) Vitamins ("LifeTime") (such transaction, the "Sale"), to Nutra, Inc., a subsidiary of Nutraceutical International Corporation. The purchase price of LifeTime was $8,250,000 in cash, less payment of liabilities and certain pre-closing working capital adjustments. The final closing of the Sale is subject to shareholder approval and certain releases including final consents from the Company's senior lender, Vineyard Bank, N.A. As a result of the Sale, the Company intends to initiate a plan to recapitalize its balance sheet and focus on the growth of its beverage business, namely New Leaf Tea, as well as the expansion of new products within the functional drink space.

Commenting on the Sale and recapitalization, President and CEO Eric Skae stated, "Important changes are occurring at Baywood that we believe will be very positive for shareholder value. We enjoyed the growth and value of our nutraceutical business, but realized the need to build a pure-play company in beverages. The industry growth of the functional beverage category is compelling not only with respect to the future sales and profitability of the Company, but also the strength from a valuation standpoint in the public markets."

Key components of the Company's new planned strategic direction are:

 * Divest the LifeTime nutraceutical subsidiary;
 * Build a pure-play beverage company around the New Leaf(r) brand of
   ready-to-drink teas and other new functional beverages;
 * Reduce unit costs and streamline operations;
 * Restructure the balance sheet;
 * Raise equity capital to fund geographic expansion of beverage brands;
 * Initiate a public relations and shareholder communication effort to
   attract new investors; and
 * Grow the New Leaf brand into a national franchise and household name.

The Company intends to develop a new line of ready-to-drink ("RTD") beverages based on Super Juices and other functional ingredients. The New Leaf brand is already established in the Northeast and is emerging in the Southeast, Midwest and South Florida through over 75 distributors and approximately 8,000 accounts in the independent grocery/restaurant "street" channel.