-- Sales of New Leaf Beverages Increase 69.4% in Q2 Versus Q1 of 2009

-- Gross Margins Improve to 22.9% in Q2 Versus 17.2% in Q1 of 2009

-- Case Volume Up Over 68% From 82,196 Cases in Q1 to 138,341 Cases in Q2

SCOTTSDALE, AZ -- (Marketwire) -- 08/20/09 -- Baywood International, Inc. (OTCBB: BAYW) ("Company") announces shareholder update and unaudited financial results for the second quarter ended June 30, 2009.

2009 Shareholder Update

On January 15, 2009 the Company announced that Eric Skae, President of the Company's New Leaf Tea division, had been appointed to a new post as President of the Company to lead the thrust into the healthy beverage market. Mr. Skae has spent the past seventeen years in the beverage industry working in senior level sales, marketing and distribution roles helping to grow major brands including Naked Juice, Fresh Samantha, Hansens and Arizona Iced Tea.

On July 9, 2009 New Leaf Brands announced that the June/July 2009 issue of "Everyday with Rachael Ray" Magazine voted New Leaf's Strawberry White Tea as the "best flavored white tea."

On July 30, 2009 the Company announced that it entered into a definitive agreement to sell the assets of its wholly owned subsidiary, Nutritional Specialties, Inc. ("LifeTime"), 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 should occur in late September 2009. This transaction will make it possible for the Company 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.

On August 4, 2009 New Leaf Brands announced that Costco Wholesale is rolling out New Leaf Tea in all 77 stores in Canada starting the first week of this month. The product will be sold in variety packs in both English and French to meet Canada's special label requirements that include 3 bottles of 4 flavors (Plum, Lemon, Ginseng and Honey Dew). The variety pack will be sold to Costco Wholesale through one of Canada's largest and leading beverage distributors that markets beverages in every Canadian province.

On August 19, 2009 New Leaf Brands announced that 7-Eleven is now carrying New Leaf Tea in 280 stores in the Metro New York area including approximately 180 stores in Long Island and 100 stores across Brooklyn, Bronx, Suffern and Queens.