<PAGE>

                             ANNUAL INFORMATION FORM

                                       OF

                          COOLBRANDS INTERNATIONAL INC.

                        Fiscal Year Ended August 31, 2004













                                                               January 14, 2005






<PAGE>

                                TABLE OF CONTENTS


<TABLE>
<S>                                                                                      <C>
ITEM 1:  CORPORATE STRUCTURE..............................................................1

ITEM 2:  GENERAL DEVELOPMENT OF THE BUSINESS..............................................2

ITEM 3:  NARRATIVE DESCRIPTION OF THE BUSINESS............................................5

ITEM 4:  SELECTED CONSOLIDATED FINANCIAL INFORMATION.....................................17

ITEM 5:  MANAGEMENT DISCUSSION AND ANALYSIS..............................................18

ITEM 6:  MARKET FOR SECURITIES...........................................................18

ITEM 7:  DIRECTORS AND OFFICERS..........................................................18

ITEM 8:  ADDITIONAL INFORMATION..........................................................22
</TABLE>







<PAGE>

ITEM 1:  CORPORATE STRUCTURE

         The Corporation was formed under the Business Corporations Act
(Ontario) by articles of amalgamation dated September 7, 1994 under the name
Yogen Fruz World-Wide Inc. On March 18, 1998, the Corporation was continued
under the Companies Act (Nova Scotia) and reorganized its share capital to
provide for multiple voting shares and subordinate voting shares. On March 15,
2000, the Corporation amended its articles to change its name to CoolBrands
International Inc. ("CoolBrands" or the "Corporation"). The principal office of
the Corporation is located at 8300 Woodbine Avenue, 5th Floor, Markham, Ontario,
L3R 9Y7. The registered address of the Corporation is Suite 800, 1959 Upper
Water Street, Halifax, Nova Scotia, Canada, B3J 2X2.

Corporate Chart

         The following chart illustrates all of the principal wholly-owned
subsidiaries and other entities of the Corporation, their jurisdiction of
incorporation and the percentage ownership by the Corporation of the voting and
non-voting securities of each subsidiary or other entity.


<TABLE>
<S>      <C>             <C>           <C>                             <C>                    <C>
                                                       ---------------------------------
                                                       | COOLBRANDS INTERNATIONAL INC. |
                                                       |        (Nova Scotia)          |
                                                       ---------------------------------
                                                                       |
                                                                       |
                                                                       |
                         ----------------------------------------------------------------------
                         | 100%                                        | 100%                 | 100%
                  ----------------                            --------------------   ---------------------
                  |  INTEGRATED  |                            |    YOGEN FRUZ    |   |    YOGEN FRUZ     |
                  |  BRANDS INC. |                            |    CANADA INC.   |   | ACQUISITIONS INC. |
                  | (New Jersey) |                            |     (Ontario)    |   |     (Nevada)      |
                  ----------------                            --------------------   ---------------------
                         |                                             |
                         |                                             |
          ---------------------------------------------                |
          |                      |                    |                | 100%
          |                      |                    |      --------------------
          |                      |                    |      | KAYLA FOODS INT'L |
          |                      |                    |      |  (Barbados) INC.  |
          |                      |                    |      |     (Barbados)    |
          |                      |                    |      ---------------------
          |                      |                    |
          | 50.1%                | 100%               | 100%
----------------------  ---------------------  -----------------
| AMERICANA FOODS LP |  | ESKIMO PIE FROZEN |  |   ESKIMO PIE  |
|      (Texas)       |  | DISTRIBUTION INC. |  |  CORPORATION  |
|                    |  |    (Delaware)     |  |   (Virginia)  |
----------------------  ---------------------  -----------------
</TABLE>


<PAGE>

ITEM 2:  GENERAL DEVELOPMENT OF THE BUSINESS

         The Corporation markets Dreamery'r' Ice Cream, Whole Fruit'TM' Sorbet,
Eskimo Pie'r', Chipwich'r' and Fruit-A-Freeze'r' branded frozen novelties and
frozen dessert products. Eskimo Pie'r' created the frozen novelty industry in
1921 when founder, Christian K. Nelson, invented the chocolate-coated ice cream
bar. Today, 80 years later, Eskimo Pie'r' remains one of the best-known and most
widely distributed of all frozen novelty brands. The Corporation also markets a
broad range of ice cream, frozen novelties and frozen dessert products under the
Atkins'r', Godiva'r', Tropicana'r', Welch's'r', Betty Crocker'r', Trix'r',
Yoplait'r' ,No Pudge!'TM', Crayola'TM', Justice League'TM', Snapple'TM' and Care
Bear'TM' brand names, pursuant to long-term licensing agreements. The
Corporation distributes a wide variety of ice cream and frozen dessert products
through Eskimo Pie Frozen Distribution for itself and numerous other ice cream
brands, including Good Humor, Nestle, Dreyer's, Edy's, Haagen-Dazs, Friendly's,
Klondike and Carvel. The Corporation manufactures soft serve yogurt and ice
cream mixes, a wide variety of hard pack ice cream, frozen dessert novelties and
dairy mixes for the foodservice channel at Americana's Dallas, Texas production
facility. The Corporation produces soft serve frozen yogurt and ice cream mixes
at its production facility in Russellville, Arkansas. Eskimo Pie'r' Foodservice
is a leading manufacturer and supplier of premium soft serve ice cream, frozen
yogurt, custard and smoothies to the foodservice industry. The Corporation also
manufactures and sells a full line of quality flavours, chocolate coatings,
fudge sauces, powders for chocolate milk, egg nog bases and other ingredients
and flexible packaging products for use in private label dairy products in
addition to the Corporation's brands. The Corporation is the world's largest
franchisor and licensor of stores and other locations serving primarily frozen
yogurt. As of August 31, 2004, the Corporation had franchise operations and
strategic partnerships in approximately 80 countries. The Corporation franchises
and licenses a Family of Brands under the names Yogen Fruz'r', I Can't Believe
It's Yogurt'r', Bresler's'r' Ice Cream and Premium Frozen Yogurt, Swensen's'r'
Ice Cream, Ice Cream Churn'r', Paradise'r', Golden Swirl'r' and certain other
names. The Corporation also franchises and licenses gourmet coffee shop outlets
in 22 countries under the name Java Coast'r' Fine Coffees.

         The predecessor of the Corporation commenced operations in August 1986
with the opening of the first Yogen Fruz'r' store in Vaughan, Ontario. The store
served yogurt as a frozen dessert under a unique concept pursuant to which
individually packaged portions of frozen yogurt were blended with fresh frozen
fruit in front of the customer. The Yogen Fruz'r' concept was developed by the
Corporation's founders, Michael Serruya, Co-Chairman of the Board of the
Corporation, and his brother, Aaron Serruya, Executive Vice-President of the
Corporation.

         The first Yogen Fruz'r' store experienced immediate success, prompting
the Corporation to commence a franchising program. The first franchised Yogen
Fruz'r' store opened in London, Ontario in August 1987 with an additional 62
stores opening in Canada over the next four years. The expansion of the
Corporation's operations was further accelerated by the establishment of an
international master franchise program in June 1991, when a regional franchise
was granted in Latin America.

         The Corporation's operations have been significantly expanded through a
series of strategic acquisitions and through the development of strategic
partnerships. In June 1991, Yogen Fruz Canada Inc., a subsidiary of the
Corporation through which all of the Corporation's operations were then carried
on, acquired its largest competitor in Canada, Yogurty's Yogurt Discovery, from
Silcorp Limited. Strategic partnerships were recently established by the
Corporation with National Amusements Inc. and Wal-Mart Stores Inc. in the United
States, Tricon Global Restaurants (Canada) Inc. in Ontario, Canada and
internationally by master franchisees with such chains as Dunkin Donuts,
Kentucky Fried Chicken, KLM Dutch Airlines and Esso. In July 1995, the
Corporation completed the acquisition of Bresler's Industries, Inc., an
established U.S. franchisor and licensor of ice cream and frozen yogurt outlets.
In March 1996, the Corporation completed the acquisition of I Can't Believe Its
Yogurt, then the second largest franchisor and licensor of frozen yogurt outlets
in the United States and a significant franchisor of frozen yogurt outlets
outside North America.




                                       2


<PAGE>

         In June 1997, the Corporation completed the acquisition of Golden Swirl
Frozen Yogurt Inc. and GS Associates Inc., the sole partners of Golden Swirl
Management Company, an owner and operator of a chain of frozen yogurt stores in
Utah, California, Nevada, and Arizona under the name Golden Swirl. In January
1998, the Corporation acquired the business of U.S.-based Ice Cream Churn Inc.
and Ice Cream Churn Enterprises, which have the right to operate outlets in
Wal-Mart Stores Inc. stores. In March 1998, the Corporation acquired Integrated
Brands Inc. ("Integrated Brands"). Presently, Integrated Brands markets, sells
and distributes Dreamery ice cram, WholdFruit sorbets, Eskimo Pie, Chipwich and
Fruit-A-Freeze branded frozen novelties and desserts. Integrated Brands also
markets, sells and distributes Godiva'r' ice cream, Atkins'r' Endulge'TM' super
premium ice cream products, Tropicana'r' frozen desserts, as well as a variety
of other branded frozen dessert products under the Betty Crocker'r', Yoplait'r',
Trix No Pudge!'TM', Crayola'TM', Justice League'TM', Snapple'TM' and Care
Bear'TM' brand names pursuant to long-term exclusive license agreements.
Integrated Brands, directly and through subsidiaries, also operates, franchises
and licenses Swensen's'r' Ice Cream, and Tropicana Smoothies, Juices and More!
frozen dessert stores throughout the United States and certain foreign
countries. In May 1999, the Corporation acquired specific assets of Greater
Pacific Foods, Inc., including the Honey Hill Farms trademarks. The Honey Hill
Farms business consists of marketing and distributing Honey Hill Farms soft
serve frozen yogurt and ice cream mixes to outlets located primarily in the
western United States.

         Early in fiscal 1999, the Corporation began to explore the opportunity
to invest in Eskimo Pie Corporation ("Eskimo Pie") in order to benefit from
Eskimo Pie's strong brand names and U.S. based manufacturing facilities. On
October 6, 2000, the acquisition of Eskimo Pie was completed by purchasing the
2.9 million shares not owned by the Corporation for U.S.$10.25 a share or
U.S.$29.7 million. Integrated Brands Inc. borrowed U.S.$30 million to finance
the acquisition.

         Eskimo Pie created the frozen novelty industry in 1921 with the
invention of the Eskimo Pie ice cream bar. Eskimo Pie's strengths include
national brand recognition, quality products and the management of complex sales
and distribution networks. Eskimo Pie's growth came primarily as a result of the
development and introduction of Eskimo Pie brand frozen dessert products, the
development and marketing of frozen dessert products under the licensing of
other well-known national brands and the use of a select group of
quality-oriented manufacturers who provide a cost effective means to manufacture
products. Integrated Brands then markets, sells and distributes the products.
Today, Integrated Brands markets a broad range of frozen novelties, ice cream
and sorbet products under the Eskimo Pie and Welch's brand names. The
Corporation engages in product/concept development, and advertising and sales
promotion expense generally includes trade promotion and introductory costs,
price-off and feature price promotions, regional consumer promotion, couponing
and other trial purchase generating programs.

         Certain key ingredients (such as chocolate coatings and powders) and
wrappers used in the manufacture of Eskimo Pie and other licensed frozen
novelties and ice cream products are produced at the Corporation's owned
facilities located in New Berlin, Wisconsin and Bloomfield, New Jersey. In
addition to products manufactured for use in its business, the Corporation sells
various other ingredients to the dairy industry produced at its New Berlin,
Wisconsin facility. This business involves blending, cooking and processing
basic flavours and fruits to produce products which subsequently are used by
customers to flavour frozen desserts, ice cream novelties and fluid dairy
products. The Corporation also manufactures flexible packaging, such as private
label ice cream novelty wraps, at its Bloomfield, New Jersey plant. These
products are sold to the dairy industry, including many of the Corporation's
manufacturers.

         The Corporation also manufactures soft serve yogurt and premium ice
cream mixes in a leased facility in Russelville, Arkansas. Soft serve mix is
sold under the Eskimo Pie brand name to broad-line foodservice distributors,
yogurt shops and other foodservice establishments which, in turn, sell soft
serve ice cream and yogurt products to consumers. The sale of soft serve yogurt
and ice cream mixes, is managed by a separate sales force working within Eskimo
Pie's wholly-owned subsidiary, Sugar Creek Foods, Inc.



                                       3


<PAGE>

         Effective July 1, 2003, the Corporation acquired the general partner
interest and a majority of the total partnership interest in Americana Foods LP.
Americana Foods is one of the largest and most versatile frozen dessert
manufacturing facilities in the U.S. and currently supplies a wide variety of
soft serve mixes, packaged ice cream, frozen yogurt and sorbet products and
frozen novelties for the Corporation and to well known national retailers, food
companies and restaurant chains, including Sam's Club, TCBY Enterprises and
Silhouette. Americana Foods also manufacturers and sells products for the
foodservice channel such as dairy mixes for preparing mashed potatoes which are
extensively used to standardize quality and reduce labor costs in on-site food
preparation. Americana Foods strengthens CoolBrands ability to support its
brands with state of the art manufacturing, product innovation and quality
assurance.

         On July 7, 2003, the Corporation acquired the Dreamery'r' ice cream and
Whole Fruit'TM' sorbet brands from Dreyer's Grand Ice Cream, as well as the
rights to the license for the Godiva'r' ice cream brand, which was assigned by
Dreyer's. The acquisition of these ice cream brands give the Corporation
significant share in the packaged ice cream segment, complimenting the
Corporation's strong position in the frozen novelty segment. In this
transaction, the Corporation also acquired substantially the entire Haagen-Dazs
Ice Cream distribution system in the U.S. from Nestle, including distribution
assets in the States of Washington, Oregon, Florida, California, Pennsylvania,
New Jersey, Utah, Minnesota, Maryland, and The District of Columbia. The
acquisition of the Haagen-Dazs distribution assets from Nestle enhances the
Corporation's ability to drive downstream distribution of its products in all
channels.

         Effective September 26, 2003 CoolBrands International began initial
shipments of its line of Atkins Endulge'TM' super premium ice cream products to
U.S. retailers. The products have been accepted and will ship through
CoolBrands' distribuition system into customers such as Kroger, Wal-Mart,
Albertson's, Publix, ShopRite and other major U.S. retail chains. Atkins
Endulge'TM' super premium ice cream products will also be available in Natural
Food Stores along with the balance of the Atkins food line through major natural
foods distributors such as UNFI and Tree of Life. CoolBrands manufactures,
distributes and markets Atkins Endulge'TM' under license from Atkins
Nutritionals, Inc. Atkins Endulge'TM' is rich, creamy, super premium ice cream
with no sugar added to control carbohydrates, marketed in a variety of flavors
in pint-size containers, ice cream bars, fudge bars, and other frozen snacks. At
four or fewer Net Carbs (carbohydrates that affect blood sugar) per serving,
Atkins Endulge'TM' has up to 85% fewer Net Carbs than other super premium
brands.

         December 22, 2004, CoolBrands announced that it entered into an
agreement to acquire the yogurt business of Kraft Foods, Inc. (NYSE: KFT) for
approximately US$ 59,000,000. The acquired brands include Breyers Fruit on the
Bottom, Light and Creme Savers cup yogurt varieties and Creme Savers Smoothie
drinkable yogurts. Pursuant to the agreement, CoolBrands' wholly owned
subsidiary, Integrated Brands, Inc., will purchase substantially all of Kraft's
assets related to its yogurt business, including a license for the Breyers
trademark, a license for the Creme Savers trademark, a license for the Light `n
Lively trademark and Kraft's manufacturing facility in North Lawrence, New York.
The transaction, which is subject to regulatory approval, is expected to be
completed in the first calendar quarter of 2005. CoolBrands expects to finance
approximately U.S.$ 45,000,000 in bank debt and utilize cash to pay for the
remainder of the purchase price. CoolBrands estimates that this acquisition will
contribute approximately U.S.$ 40,000,000 to U.S.$ 45,000,000 in revenues and
net earnings of approximately U.S.$2,000,000 to U.S.$2,500,000 in the last half
of fiscal 2005.

         Concurrently with the acquisition in March 1998 of Integrated Brands,
CoolBrands continued under the laws of Nova Scotia and reorganized its share
capital. As a result, the share capital of CoolBrands consists of Multiple
Voting Shares (10 votes per share) and Subordinate Voting Shares (1 vote per
share). The Subordinate Voting Shares trade on The Toronto Stock Exchange under
the symbol "COB.SV.A".





                                       4


<PAGE>

ITEM 3:  NARRATIVE DESCRIPTION OF THE BUSINESS

Overview

          CoolBrands International competes in the consumer products and
franchising segments of the frozen dessert industry, marketing a diverse range
of frozen dessert products under nationally and internationally recognized brand
names. CoolBrands competes in the fast-growing "Better-for-You" ice cream
category with offerings such as fat free, non-dairy Whole Fruit Sorbet and
Atkins Endulge controlled carbohydrate super premium ice cream. New
"Better-for-You" offerings by CoolBrands include No Pudge! branded frozen snacks
and a line of "Better-for-Kids" frozen snacks sold under the Crayola, Justice
League, Snapple, Care Bears and Trix Pops brands. CoolBrands also competes in
the super premium ice cream category with the Dreamery Ice Cream and Godiva Ice
Cream brands. In addition, CoolBrands markets a wide variety of "all family"
premium ice creams and frozen snacks under brand names including Eskimo Pie,
Chipwich, Tropicana, Welch's, Yoplait and Welch's.

          CoolBrands' subsidiary, Eskimo Pie Frozen Distribution, operates a
"direct store door" (DSD) ice cream distribution system in selected markets in
the U.S., serving these CoolBrands products and a growing family of Partner
Brands to supermarkets, convenience stores and other retail customers.

          CoolBrands' 50.1% owned subsidiary, Americana Foods, is a leading U.S.
manufacturer and supplier of soft serve mixes, packaged ice cream, frozen yogurt
and sorbet products, frozen snacks and other food products to well known
national retailers, food companies and restaurant chains.

          CoolBrands' Foodservice Division manufactures and sells premium soft
serve ice cream and frozen yogurt to the foodservice industry. CoolBrands' Dairy
Components Division manufactures and sells a full line of quality flavours,
chocolate coatings, fudge sauces, powders for chocolate milk, egg nog bases and
other ingredients and flexible packaging products for use in private label dairy
products in addition to the Company's brands.

          CoolBrands' Franchising Division franchises and licenses frozen
dessert outlets operated under a Family of Brands including Tropicana Smoothies,
Juices & More, Swensen's Ice Cream, I Can't Believe It's Yogurt, Yogen Fruz,
Bresler's Premium Ice Cream, Golden Swirl and Ice Cream Churn, with company
owned, franchised and non-traditional partnership locations around the world.

         CoolBrand's operations consist of four distinct segments: (1) the
manufacture, sale and distribution of pre-packaged frozen dessert products under
the Eskimo Pie'r', Dreamery'r', Whole Fruit'TM', Chipwich'r' and
Fruit-A-Freeze'r' trademarks and under the Atkins'r' Endulge'TM', Godiva'r',
Tropicana'r', Welch's'r', Betty Crocker'r', Yoplait'r', Colombo'r', Trix'r', No
Pudge!, Crayola, Justice League, Snapple and Care Bear trademarks and a variety
of other trademarks, pursuant to exclusive long-term license agreements (the
"Consumer Products Business"); (2) the franchising and licensing of Yogen
Fruz'r', I Can't Believe It's Yogurt'r', Bresler's'r', Swensen's'r', Ice Cream
Churn'r', Java Coast'r' Fine Coffees and Golden Swirl'r' outlets and other
activities related thereto, including the operation of a limited number of
company-owned ice cream and yogurt stores (the "Franchising and Licensing
Business"); (3) the manufacture of soft serve yogurt and ice cream mixes sold
primarily to foodservice distributors, yogurt shops and other foodservice
establishments (the "Foodservice Business"); and (4) the manufacture of
flavours, ingredients and packaging sold primarily to frozen novelty
manufacturers and the dairy industry (the "Dairy Components Business").




                                       5


<PAGE>

         The following table sets forth the contribution to revenue of each of
the above-described segments by geographic region:

        Revenue by Industry Segments and Classes of Product and Services

Year ended August 31, 2004 (in thousands of dollars)

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
       Revenue Source          Prepackaged        Franchising     Foodservice      Dairy       Corporate
                                consumer         and licensing                  components
                                products
                                    $                  $               $             $             $
---------------------------------------------------------------------------------------------------------
<S>                               <C>                <C>            <C>           <C>             <C>
United States                     654,497            11,350         25,809        39,295
---------------------------------------------------------------------------------------------------------
Canada                              1,021             3,993                                       292
---------------------------------------------------------------------------------------------------------
International                         481             3,545
---------------------------------------------------------------------------------------------------------
Inter-segment revenues           (88,575)                            (936)       (8,430)        (229)
---------------------------------------------------------------------------------------------------------
Other revenues                        348               215                                       144
---------------------------------------------------------------------------------------------------------
Total Consolidated revenues       567,772            19,103         24,873        30,865          207
---------------------------------------------------------------------------------------------------------
</TABLE>


Year ended August 31, 2003 (in thousands of dollars)

<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------
       Revenue Source          Prepackaged        Franchising     Foodservice     Dairy       Corporate
                                consumer         and licensing                  components
                                products
                                    $                  $               $             $            $
---------------------------------------------------------------------------------------------------------
<S>                               <C>                <C>            <C>           <C>             <C>
United States                     275,446            13,400         26,234        41,594
---------------------------------------------------------------------------------------------------------
Canada                                947             3,996                                       214
---------------------------------------------------------------------------------------------------------
International                         741             3,494
---------------------------------------------------------------------------------------------------------
Inter-segment revenues            (5,389)                            (991)       (2,943)        (214)
---------------------------------------------------------------------------------------------------------
Other revenues                        575               126                                        43
---------------------------------------------------------------------------------------------------------
Total Consolidated revenues       272,320            21,016         25,243        38,651           43
---------------------------------------------------------------------------------------------------------
</TABLE>


         The Prepackaged Consumer Products Segment

         The Corporation manufactures, distributes and sells a variety of
pre-packaged frozen dessert products to distributors, and various retail
establishments, throughout Canada and the United States, including supermarkets,
grocery stores, club stores, gourmet shops, delicatessens and convenience
stores.

         The Corporation's products for wholesale sale include: Tropicana'r'
frozen novelties and frozen dessert specialties; Eskimo Pie'r' frozen novelties
and frozen dessert specialities, Dreamery'r' ice cream, Godiva'r' ice cream,
Whole Fruit'TM' sorbet, No Pudge! novelties, Chipwich'r' novelties,
Fruit-A-Freeze'r' novelties, Welch's'r' frozen novelties and frozen dessert
specialties, Atkins'r' Endulge'TM' super premium ice cream products, Betty
Crocker'r' frozen novelties and frozen dessert specialties, Yoplait'r' ready to
eat frozen yogurt products; and Trix'r' frozen novelties, and a variety of other
novelties, including those sold under the "Great American", "Tropical", "Chilly
Things" and "Bullet" trademarks. Many of the Atkins'r', Welch's'r', Betty
Crocker'r', Yoplait'r' and No Pudge! products appeal to the healthier consumer
lifestyle and eating trends toward lower and no fat and lower and no cholesterol
products. The marketing, distribution and sale of prepackaged frozen dessert
products under the Atkins'r' Endulge'TM', Godiva'r', Tropicana'r', No Pudge!,
Welch's'r', Betty Crocker'r', Yoplait'r', Colombo'r', Trix'r', Crayola, Justice
League, Snapple and Care Bears trademarks are accomplished pursuant to exclusive
long-term license agreements. The Corporation, through its subsidiary,
Integrated Brands has the right to develop and on an on-going basis is
developing additional products under the foregoing trademarks. Integrated Brands
incurs significant expenses to obtain shelf space in connection with the
introduction of its new products.



                                       6


<PAGE>

         Integrated Brands purchases packaging and ingredients for its products
directly from unaffiliated suppliers. Integrated Brands then sells the packaging
and ingredients to unaffiliated manufacturers. Certain of these manufacturers
also manufacture other ice cream and related frozen dessert products for other
companies, including companies affiliated with Richard E. Smith, who is a
significant CoolBrands shareholder and Co-Chairman of the CoolBrands board of
directors and Co-Chief Executive Officer of the Corporation. The unaffiliated
manufacturers produce Integrated Brands' products according to Integrated
Brands' specifications and formulas under quality control supervision by
Integrated Brands. Integrated Brands then purchases the finished products from
the unaffiliated manufacturers at a formula price based upon the manufacturers'
actual cost of ingredients and packaging plus an agreed upon processing fee
which includes a profit for the manufacturers. Integrated Brands believes there
are many alternative ice cream and novelty manufacturers available on comparable
terms.

         Americana Foods LP also manufactures numerous products which are sold
by Integrated Brands and distributed by Eskimo Pie Frozen Distribution.

         Calip Dairies, Inc. ("Calip"), of which Richard E. Smith is Chairman of
the Board and Mr. Smith and his family are the sole stockholders, has the
exclusive right to distribute products of Integrated Brands and its
subsidiaries, affiliates and associates in the State of New Jersey and certain
areas in the State of New York, and the State of Connecticut pursuant to a
distribution agreement with Integrated Brands. The distribution agreement is to
remain in effect as long as the Smith family controls Calip, unless Calip gives
notice that it will not renew the agreement. CoolBrands has agreed to guarantee
the performance of the agreement.

         The Franchising and Licensing Segment

         A full franchising program has been developed for each of the
Tropicana'r' Smoothies, Juices & More!, Yogen Fruz'r', Bresler's'r',
Swensen's'r', Java Coast'r' Fine Coffees and Golden Swirl'r' chains. Although
developed separately, each of the programs (except for Golden Swirl'r') is
substantially similar and is organized on two levels: master franchising,
pursuant to which master franchises are sold for specific regions, countries or
other geographical areas; and retail franchising and licensing, pursuant to
which franchises are sold, and licenses are granted, by master franchisees to
retail outlet operators in the master franchisee's territory. Generally, retail
franchising is used for larger locations such as traditional stores or kiosks,
which offer a full range of products. Licensing is used primarily for smaller
locations such as mini-counters or carts, which are located within the premises
of strategic partners and typically offer a more limited selection of products.

         Master franchisees and franchisees are selected on the basis of their
financial resources, operational skills and business experience. Master
franchisees and franchisees are required to complete in-depth training programs.
The training programs typically include instruction relating to business
management, accounting, operations, ordering, store opening and closing
procedures and staff hiring. Franchisees are also provided with detailed
operating procedures and marketing, construction, employee and management
manuals. Generally, preliminary layouts and plans for all new sites are reviewed
and representatives of CoolBrands are sent to the opening of each new location.
Representatives of CoolBrands also make visits to sites around the world. Local
master franchisees are required to visit each site in their franchise area.

         Yogen Fruz Canada Inc. acts as its own master franchisee in the U.S.
and Canada (except for Yogen Fruz franchises in British Columbia).





                                       7


<PAGE>

         Company-Owned Stores

          The Corporation owns and operates a limited number of corporate stores
in the United States. Generally, it is the Corporation's policy to own and
operate a limited number of corporate stores that are used to test market new
products and train new franchisees. At August 31, 2004, there were four
company-owned stores operating in the United States.

         Master Franchising and Strategic Partnership Arrangements

         Master franchise agreements generally authorize master franchisees to
franchise and license Yogen Fruz'r', I Can't Believe It's Yogurt'r',
Bresler's'r' , Swensen's'r' or Java Coast'r' Fine Coffees outlets in the
territory covered by their respective master franchises. In certain instances,
such as where the territory covered by the master franchises is comprised of
more than one country, master franchisees may also be allowed to grant master
franchises for portions of their territory.

         Master franchisees are generally subject to substantially all of the
requirements imposed on retail franchisees and are obliged to enforce those
requirements in respect of their own franchisees. In addition, master
franchisees are usually required to open a minimum number of outlets each year.

         Master franchises are generally granted for periods varying between ten
and twenty years, and are usually renewable for an additional period of ten to
twenty years. Master franchisees pay CoolBrands an initial fee for their master
franchise as well as, in the case of Yogen Fruz'r', Bresler's'r' , Swensen's'r'
and Java Coast'r' Fine Coffees master franchisees, additional fees for each
franchise sold or license granted by them, and a portion of the royalties earned
by them from their franchisees. The initial fee for a master franchise varies
depending on a number of different factors, including the size of the territory
covered by the master franchise.

         CoolBrands, through its subsidiaries and master franchisees, has
entered into strategic partnership arrangements with a number of retail chains
both in North America and internationally. These arrangements are usually
structured as license agreements pursuant to which CoolBrands or its master
franchisee licenses the strategic partner to install Yogen Fruz'r', I Can't
Believe It's Yogurt'r', Bresler's'r', Java Coast'r' Fine Coffees and/or Golden
Swirl'r' mini-counters in some or all of its locations. Similarly, a strategic
partner may license CoolBrands to offer that partner's products at Yogen
Fruz'r', I Can't Believe It's Yogurt'r', Bresler's'r' and/or Java Coast'r' Fine
Coffees and/or Golden Swirl'r' outlets. The mutual offering of products is
sometimes referred to as "cross-branding". CoolBrands views these forms of
arrangements as strategic since they typically exploit the complementary name of
the Yogen Fruz'r', I Can't Believe It's Yogurt'r', Bresler's'r', Java Coast'r'
and Golden Swirl'r' Businesses with the business of the strategic partners and
result in incremental business for both parties.

         CoolBrands has established a co-branding program between I Can't
Believe It's Yogurt'r' and Bresler's'r' outlets in the United States. As a
result of this program, 30 I Can't Believe It's Yogurt'r' outlets now feature a
limited selection of Bresler's'r' ice cream and 39 Bresler's'r' outlets feature
a limited selection of I Can't Believe It's Yogurt'r' frozen yogurt.

         CoolBrands formed a partnership for its I Can't Believe It's Yogurt'r'
brand when the Corporation's Master Franchisee in Amsterdam signed an agreement
with KLM Dutch Airlines. As a result, the Corporation's I Can't Believe It's
Yogurt'r' frozen dessert is now served as a complimentary dessert on all KLM
flights along its European and Intercontinental routes.

         During fiscal 1998, CoolBrands strengthened its alliance with National
Amusements Inc., an international entertainment company operating 1,180 motion
picture screens in the U.S., Great Britain and Latin America.


                                       8


<PAGE>

         A five year co-marketing pact was signed whereby the Bresler's'r' and
Yogen Fruz'r' mix-in frozen yogurt brands were introduced to more than 50
theatres throughout the U.S. and Great Britain.

         The Corporation expanded its relationship with Wal-Mart during fiscal
1998. The Corporation acquired American-based Ice Cream Churn in January 1998.
At the time, Ice Cream Churn had 22 outlets in Wal-Mart stores throughout the
Southern U.S. Further inroads were made in February, 1998, when the Corporation
signed a deal with American retailer Sam's Club, a division of Wal-Mart, to roll
out the Bresler's'r' yogurt line in 440 Sam's Club locations throughout the U.S.
During fiscal 2001, sales to Sam's Club was converted to Eskimo Pie's soft serve
ice cream product.

         CoolBrands signed an agreement with Tricon Global Restaurants (Canada)
Inc. to place I Can't Believe It's Yogurt'r' on the menu of its 250 Pizza Hut
restaurants across Canada. Beginning in June, 2000, I Can't Believe It's
Yogurt'r' was served as the centerpiece of a widely publicized launch of Pizza
Hut's dessert bar.

         Retail Franchising Arrangements

         CoolBrands, either directly or through a master franchisee, enters into
a franchise agreement with each franchisee for each location. The franchise
agreement authorizes the franchisee to operate the location under the Yogen
Fruz'r', Bresler's'r', Swensen's'r', Java Coast'r' Fine Coffees or Golden
Swirl'r' name and trademarks in accordance with such methods, standards,
specifications and procedures as CoolBrands may prescribe from time to time.
Only products approved by CoolBrands may be sold at the location and the
franchisee must buy such products solely from CoolBrands or from suppliers and
manufacturers designated by it. The franchisee must pay the costs of leasehold
improvements and must purchase the necessary equipment to operate the location
from CoolBrands or suppliers designated by it. Generally, Yogen Fruz'r',
Bresler's'r', Swensen's'r', Java Coast'r' Fine Coffees or Golden Swirl'r'
franchisees are required to devote their full time and best efforts to their
franchise.

         Except for Bresler's'r' franchises, which are granted for as long as
the franchisee holds a lease for the franchise location, franchises are granted
for a specific term and are usually renewable if certain conditions are
satisfied, including, in some instances, the achievement of minimum sales
levels. Yogen Fruz'r' franchises are granted for periods varying between five
and ten years (often corresponding to the term of the lease for the location of
the franchise) and are usually renewable for an additional period of five years.

         Franchisees must pay their master franchisee an initial franchise fee
as well as royalties based on their gross sales. In addition, a renewal fee is
usually paid on the renewal of the franchise. The franchise fee for a Yogen
Fruz'r' store franchise in Canada is $25,000. Internationally, franchise fees
are set by master franchisees and, for a Yogen Fruz'r' store, typically vary
between U.S.$10,000 and U.S.$25,000. All Yogen Fruz'r' franchisees must pay
royalties to their master franchisee equal to 6% of their gross sales.


                                       9


<PAGE>

         Canada

         The principal product served at the retail locations of franchisees is
hardpack frozen yogurt which is blended with fresh frozen fruit in front of the
customer and served in a cup or cone. Products served include frozen yogurt
shakes, cakes and pies, fresh juices and hot and cold non-alcoholic beverages.
Yogen Fruz has also developed new flavours, combinations and tastes of
Smoothies, which have rapidly won wide consumer appeal. Yogen Fruz Smoothies are
made in dairy and non-dairy versions, with non-fat Yogen Fruz or I Can't Believe
It's Yogurt frozen yogurt and Tropicana juices. The Yogen Fruz Concept is
simple, easy to operate, and can be implemented in a variety of different
formats.

          In addition, Yogen Fruz outlets generally require less space and
equipment to operate, and a smaller investment by franchisees than outlets of
other competing frozen yogurt store chains. The cost of construction of a Yogen
Fruz store varies depending upon its size and on the level of leasehold
improvement allowances received. The typical estimated required investment for a
franchisee in Canada for an average size in-line store in a shopping mall is
approximately $100,000, inclusive of franchise fees.

         United States

         Products served, at the retail locations of franchisees and the
Corporation's corporate stores, include premium ice creams, frozen yogurts,
sherbets, sorbets and ices. The standard menu includes hard-packed and dipped
ice cream, soda fountain products, ice cream specialty items, yogurt products
and non-alcoholic beverages. Certain corporate stores have developed a strong
relationship with various major supermarket chains in the Southwestern United
States, most notably with Smith's, Von's, Ralph's and Albertson's. Under these
arrangements, some corporate stores operate mini locations within certain
supermarkets. The related supermarket lease agreements allow the flexibility for
these mini locations to franchise these locations. The cost of construction of a
corporate store varies depending upon its size and on the level of leasehold
improvement allowances received. The typical estimated required investment for a
franchisee in the United States for a traditional single trademark store varies
between U.S.$131,000 and U.S.$224,000 and for a combination store (ice cream and
yogurt) varies between U.S.$161,000 and U.S.$340,800, inclusive of franchise
fees.

         The price of yogurt sold to United States franchisees of I Can't
Believe It's Yogurt'r', includes charges for support and other services instead
of charging ongoing royalties on gross sales. The royalty fees paid by
franchisees to their master franchisees outside the United States vary between
0% and 3% of gross sales.

         Franchisees of Bresler's'r', Golden Swirl'r' and Swensen's'r' stores in
the United States pay an initial franchise fee of U.S.$15,000, U.S.$15,000 and
U.S.$10,000, respectively. Bresler's'r' and Swensen's'r' franchisees also pay
royalties equal to 6% and 3% of their gross sales, respectively. Golden Swirl'r'
franchisees have to pay royalties equal to U.S.$4.40 per 4 gallon case of frozen
yogurt purchased from the Corporation's designated distributors.

         There are currently no Java Coast'r' Fine Coffees franchises in the
United States. Internationally, franchise fees for Java Coast'r' Fine Coffees
franchises are set by master franchisees.






                                       10


<PAGE>

         Licensing Arrangements

         CoolBrands, either directly or through master franchisees, enters into
a license agreement with each licensee for each location. The license agreement
authorizes the licensee to operate a Yogen Fruz'r', I Can't Believe It's
Yogurt'r', Bresler's'r' or Java Coast'r' Fine Coffees mini-counter or similar
outlet within the licensee's place of business. The licensee must operate the
outlet in accordance with the methods, standards, specifications and procedures
prescribed by CoolBrands. Generally, the licensee must purchase products used
within the outlet from CoolBrands or from suppliers and manufacturers designated
by it.

         As in the case of franchises, licenses are granted for a specific term
and are usually renewable if certain conditions are satisfied. Licensees are
usually charged an initial license fee or a charge for start-up and support
services, but, are not usually required to pay royalty fees, except outside of
North America.

         The Foodservice Segment

         In addition to products manufactured for use in its business, the
Corporation manufactures soft serve yogurt and premium ice cream mixes in a
leased facility in Russellville, Arkansas. Soft serve mix is sold under the
Eskimo Pie brand name to broad-line foodservice distributors, yogurt shops and
other foodservice establishments which, in turn, sell soft serve ice cream and
yogurt products to consumers. The sale of soft serve yogurt and ice cream mixes,
is managed by a separate sales force working within Eskimo Pie's wholly-owned
subsidiary, Sugar Creek Foods, Inc.

         The Dairy Component Segment

         In addition to products manufactured for use in its business, the
Corporation sells various other ingredients to the dairy industry produced at
its New Berlin, Wisconsin facility. This business involves blending, cooking and
processing basic flavours and fruits to produce products, which subsequently are
used by customers to flavour frozen desserts, ice cream novelties and fluid
dairy products. The Corporation also manufactures flexible packaging, such as
private label ice cream novelty wraps, at its Bloomfield, New Jersey plant.
These products are sold to the dairy industry, including many of the
Corporation's independent contract manufacturers and Americana Foods.

         Trademarks

         CoolBrands relies upon copyright, trademark and trade secret laws to
protect its proprietary rights in its trademarks and products. CoolBrands has
obtained registrations for a number of trademarks in Canada, the United States
and internationally, including registrations for the trademarks and related
symbols Eskimo Pie'r', Dreamery'r', Whole Fruit'TM', Chipwich'r',
Fruit-A-Freeze'r', Yogen Fruz'r', I Can't Believe It's Yogurt'r', Honey Hill'r',
Bresler's'r', Swensen's'r', Steve's'r', Java Coast'r' Fine Coffees and Golden
Swirl'r'. The Java Coast'r' Fine Coffees trademark and related symbols are owned
in the United States by Superior Coffee and Foods, a division of Sara Lee
Corporation, and used by I Can't Believe It's Yogurt pursuant to a trademark and
license agreement providing for, among other things, a royalty-free license of
such trademark and related symbols in the United States for an unlimited period
of time (subject to termination upon the occurrence of certain events such as
bankruptcy). CoolBrands also plans to register the Yogen Fruz'r', I Can't
Believe It's Yogurt'r', Bresler's'r', Java Coast'r' Fine Coffees trademarks in
all countries where Yogen Fruz'r', I Can't Believe It's Yogurt'r', Bresler's'r',
and Java Coast'r' Fine Coffees outlets operate and where local laws permit
trademark registration. Integrated Brands holds long-term trademark license
agreements for use in certain countries of the Atkins'r' Endulge'TM', No
Pudge!'TM', Tropicana'r', Welch's'r', Betty Crocker'r', Yoplait'r', Trix'r',
Crayola'TM', Justice League'TM', Snapple'TM' and Care Bears'TM' trademarks in
connection with the manufacture, sale and distribution of frozen novelties and
other frozen dessert products and Tropicana'r' Smoothies, Juices & More!
trademark in connection with franchising. In countries lacking




                                       11


<PAGE>

trademark and/or service mark legislation, CoolBrands utilizes alternative
measures available to it, including the publication of cautionary notices, to
protect its intellectual property interests.

Regulation

         Some states in the United States and the Provinces of Alberta and
Ontario have statutes regulating franchise operations, including registration
and disclosure requirements in the offer and sale of franchises and the
application of statutory standards regulating franchise relationships, such as
termination and non-renewal of franchises. CoolBrands is also subject to the
U.S. Federal Trade Commission regulations relating to disclosure requirements in
the offer and sale of franchises in the United States. In addition, CoolBrands'
frozen yogurt and ice cream products are also subject to licensing and
regulation (including good manufacturing practices) by federal, state and
municipal authorities at its facility in Russellville, Arkansas and in the
states to which it ships its products.

Seasonality

         The industry in which the Corporation operates is highly seasonal with
more frozen yogurt and ice cream consumed in warmer months. The Corporation's
fourth quarter, during the summer, has historically been the strongest quarter
of the year. The fourth quarter accounted for 27.8% and 30.1% of the
Corporation's total revenues and net earnings, respectively, for the fiscal year
ended August 31, 2004 and 43.1% and 46.8% of the total revenues and net
earnings, respectively, for the fiscal year ended August 31, 2003. See "Item 4:
Selected Consolidated Financial Information" for a comparison of seasonal and
quarterly results.

Competition

         CoolBrands competes in the frozen dessert retail market and the gourmet
coffee retail market against a large number of competitors. In the novelty
market, Integrated Brands faces substantial competition in connection with the
marketing and sales of its products. Among its competitors are Haagen-Dazs,
Inc., Klondike, Popsicle, Breyer's, Good Humor and Sealtest, owned by Unilever
PLC and Nestle. In the super premium ice cream and sorbet pint markets,
Integrated Brands faces substantial competition from Haagen-Dazs and Ben &
Jerry's. Integrated Brands' products may also be considered to be competing with
all ice cream and other frozen desserts for discretionary food dollars. In North
America, competitors of CoolBrands include a number of large chains such as
Baskin-Robbins Inc., International Dairy Queen, Inc., Ben & Jerry's Homemade
Inc. and Haagen-Dazs Company Inc., owned by The Pillsbury Company, TCBY Systems
Inc. ("TCBY"), Freshens Premium Yogurt as well as independent retailers. In
addition, both ice cream and frozen yogurt have been added as menu items by
certain North American fast food restaurant chains and in recent years there has
been an overall increase in the number of food service locations serving frozen
yogurt, including snack food or dessert item restaurants. Frozen yogurt and ice
cream are also offered in supermarkets, grocery stores and wherever convenience
food operations are conducted. In the gourmet coffee retail market, the
Corporation competes against a number of well-established chains such as
Starbucks, Second Cup and Timothy's as well as a large number of other smaller
chains and independent coffee shops and other outlets serving coffee.

         In the frozen dessert retail market, the level of competition is
highest in the United States where I Can't Believe It's Yogurt'r', Bresler's'r',
Swensen's'r', Steve's'r' and Yogen Fruz'r' outlets not only compete with other
frozen yogurt and ice cream chains but, in certain instances, also with each
other. In Canada, Yogen Fruz'r' outlets experience lower competition given the
absence of any other significant frozen yogurt chain. Although in certain
countries Yogen Fruz'r' and I Can't Believe It's Yogurt'r' outlets compete with
TCBY outlets and with each other, markets outside of North America, and
particularly in Asia and Latin America, tend to be in their initial stages of
development resulting in CoolBrands' outlets facing little direct competition.



                                       12


<PAGE>

         In the United States, Bresler's'r' Industries and I Can't Believe It's
Yogurt also sell some of their products for in-premises consumption at the
locations of various retail food outlets.

         While the ice cream and frozen yogurt manufacturing and distribution
business is relatively easy to enter due to low entry costs, achieving wide
distribution may be more difficult because of the high cost of a national
marketing program and limitations on space available in retail freezer
compartments.

Employees

As of August 31, 2004, CoolBrands had 1,305 full-time and part-time employees.
Of these, 151 perform contract labor at Americana Foods through a temporary
employment agency.

Facilities

         CoolBrands' headquarters are located at 8300 Woodbine Avenue, 5th
Floor, Markham, Ontario, Canada, L3R 9Y7 in 6,212 square feet of leased space.
Rental payments are $151,555 per annum. The lease expires on August 31, 2005.

         CoolBrands' U.S. office is located at 4175 Veterans Highway,
Ronkonkoma, New York, 11779, U.S.A., in 11,344 square feet of leased space.
Rental payments are U.S.$142,714 per annum. The lease expires on April 30, 2005.

         CoolBrands' international head office is located at 27 Pine Road,
Belleville, St. Michael, Barbados, W.I. in 1,850 square feet of leased space.
Rental payments are U.S.$39,000 per annum. The lease expires on January 1, 2008
..

         Integrated Brands' executive offices are located at 4175 Veterans
Highway, Ronkonkoma, New York, 11779. The offices are provided to Integrated
Brands at no additional cost by Calip pursuant to the terms of a Management
Agreement between Integrated Brands and Calip.

         Integrated Brands' subsidiary, CoolBrands Manufacturing Inc., leases a
25,000 square foot production and storage facility located in Norwalk,
California. Rental payments are U.S. $192,000 per annum. The lease expires
November 30, 2005.

         Integrated Brands owns a building in Paradise Valley, Arizona. The
building is subject to a ground lease, which expires on December 31, 2005 and
contains four five-year renewal options. The premises are leased to an unrelated
third party. The remaining four Integrated Brands company operated stores are
leased for terms ranging through 2012.

         Eskimo Pie Corporation owns an ingredients manufacturing plant in New
Berlin, Wisconsin which consists of approximately 73,820 square feet on 4.0
acres. Eskimo Pie expanded its New Berlin plant by 18,000 square feet in 1990
and purchased certain new equipment at that time. Eskimo Pie completed $800,000
of capital improvements in the New Berlin facility during 1998 (consisting
primarily of equipment additions) in connection with the consolidation of its
flavours production at the New Berlin facility which was completed in 1997.

         Eskimo Pie Corporation owns a printing and packaging plant in
Bloomfield, New Jersey, which consists of approximately 71,583 square feet on
2.0 acres. The Bloomfield plant was expanded and modernized in 1985 with a
35,000 square foot addition.

         Eskimo Pie Corporation's subsidiary, Sugar Creek Foods, Inc., is
leasing from the former owner of the business a soft serve yogurt and ice cream
mix production facility, consisting of approximately 23,805 square feet, and a
packaging facility, consisting of approximately 16,000 square feet, both located
in Russellville, Arkansas.



                                       13


<PAGE>

Rental payments under these leases are U.S.$244,000 per annum. In addition,
Sugar Creek Foods. Inc. owns a freezer facility, consisting of approximately
5,013 square feet, adjacent to the production facility in Russellville. In 1999,
Eskimo Pie purchased a small parcel of land adjacent to the freezer facility for
future potential expansion of the freezer facility.

          Eskimo Pie Frozen Distribution leases a 45,000 square foot freezer and
distribution facility on 4.9 acres located in City of Industry, California.
Rental payments are U.S.$1 per annum. The lease expires June 30, 2008. The
Company has an option to purchase this facility at any time during the lease for
U.S.$1.

         Eskimo Pie Frozen Distribution leases a 3,026 square foot office
trailer and loading docks facility located in Tampa, Florida. Rental payments
are U.S.$ 29,000 per annum. The lease expires November 1, 2004. Cross-dock
operation from Orlando.

         Eskimo Pie Frozen Distribution leases a 5,800 square foot freezer and
distribution facility located in Boca Raton Florida. Rental payments are
U.S.$45,223 per annum. The lease expires December 31, 2004.

         Eskimo Pie Frozen Distribution leases a 5,500 square foot freezer and
distribution facility located in Novato, California. Rental payments are
U.S.$96,966 per annum. The lease expires December 31, 2004.

         Eskimo Pie Frozen Distribution leases a 26,400 square foot freezer and
distribution facility located in Hayward, California. Rental payments are
U.S.$193,488 per annum. The lease expires June 30, 2005.

         Eskimo Pie Frozen Distribution leases an 2,400 square foot freezer and
distribution facility located in San Diego, California. Rental payments are
U.S.$149,205 per annum. The lease expires July 1, 2006

         Eskimo Pie Frozen Distribution leases a 500 square foot of office space
and operates a cross-dock facility in Watsonville, California. Rental payments
are U.S.$18,900 per annum. The lease expires Dec 1, 2006.

         Eskimo Pie Frozen Distribution leases a 12,677 distribution facility
located in Moorestown, New Jersey operating as a cross-dock operation. Rental
payments are U.S.$68,930 per annum. The lease expires December 31, 2008.

         Eskimo Pie Frozen Distribution leases a 400 square foot of office space
and operates a cross-dock facility in Watsonville, California. Rental payments
are U.S.$16,080 per annum. The lease expires Jan 1. 2007

         Eskimo Pie Frozen Distribution leases 756 square foot of office space
and truck parking space used as a distribution facility located in Salt Lake
City, Utah. Rental payments are U.S.$15,228 per annum. Month to month lease
currently.

          Eskimo Pie Frozen Distribution leases a 27,390 square foot freezer and
distribution facility located in Seattle, Washington. Rental payments are
U.S.$229,800 per annum. The lease expires December 1, 2008.

         Eskimo Pie Frozen Distribution leases a 9,700 square foot freezer and
distribution facility located in Tualatin, Oregon. Rental payments are
U.S.$144,000 per annum. The lease expires June 7, 2006.


                                       14


<PAGE>

         Eskimo Pie Frozen Distribution leases a 29,318 square foot freezer and
distribution facility located in Miramar, Florida. Rental payments are
U.S.$265,644 per annum. The lease expires June 30, 2007.

         Eskimo Pie Frozen Distribution leases a 18,750 square foot of freezer
and distribution facilities located in Atlanta, Georgia. Rental payments are
U.S.$288,000 per annum. The facilities are rented on a month-to-month basis.

          Eskimo Pie Frozen Distribution leases office space and truck parking
facility located in Apopka, Florida (Orlando). Rental payments are U.S.$49,848
per annum. The lease expires October 31, 2006

         Eskimo Pie Frozen Distribution leases a 12,300 square foot freezer and
distribution facility located in Plymouth, Florida. Rental payments are
U.S.$147,600 per annum. The lease expires March 31, 2006.

         Eskimo Pie Frozen Distribution leases 11,413 square feet for truck
parking located in Riverside, California. Rental payments are U.S.$21,600 per
annum. The lease expires July 31, 2004.

         Eskimo Pie Frozen Distribution leases 400 square foot of office space
located in Jessup, Maryland. Rental payments are U.S.$5,495 per annum and
additional charges for Leasehold improvements at $22,945 per annum with payoff
complete in Aug 2006. The lease expires Sept 30, 2006

         Eskimo Pie Frozen Distribution leases truck parking located in Jessup,
Maryland. Rental payments are U.S.$27,780 per annum. The lease expires October
1, 2008.

         Eskimo Pie Frozen Distribution leases 15,000 square feet for truck
parking located in Ft. Meyer, Florida. Rental payments are U.S.$ 22,260 per
annum. The lease expires September 30, 2006.

         Several CoolBrands subsidiaries hold master store leases expiring at
varying dates to 2013 covering franchised locations. Where a subsidiary holds
the master lease, these premises have been subleased to franchisees under terms
and rental rates substantially the same as those in master leases. In a majority
of these instances, franchisees make all lease payments directly to the
landlords. These leases had an aggregate future base rental liability, without
regard to percentage rentals or consumer price index increases of approximately
$8,090,000 at August 31, 2004. CoolBrands' current policy is not to lease or
sublease premises nor to provide guarantees on leases in any manner with respect
to its franchisees and it has not done so except for renewals or in special
circumstances.

Legal Proceedings

         With the exception of certain legal proceedings to which certain
subsidiaries of the Corporation are parties and which are described below, the
Corporation is not a party to, nor is any of its property subject to, any legal
proceeding that may be material to it and no such proceeding is known to be
contemplated.




                                       15


<PAGE>

         The Honeycrest Litigation

         This is an action filed in March 1998 and pending in the Supreme Court
of the State of New York, County of Queens, captioned Honeycrest Holdings Ltd.,
Plaintiff against Integrated Brands Inc., Defendant ("Integrated").

         The plaintiff was an exclusive territory licensee of Integrated. The
plaintiff purchases Steve's Homemade Ice Cream and other frozen dessert products
from Integrated for sale in the United Kingdom.

          Plaintiff sought a preliminary injunction restraining Integrated from
replacing it as the distributor of such dessert products with another
distributor in the U.K. Integrated has denied taking any such action, and the
court denied the preliminary injunction. Plaintiff also seeks damages alleging
that Integrated sold it substandard and defective products, failed to supply it
with new products, and failed to deliver recipes, technology and know how as
provided for in the license agreement. Integrated denies that the products were
substandard or defective, and in its counterclaims seeks termination of the
license agreement and damages by reason of plaintiff's being in default of the
license agreement in failing to open the required number of stores in the U.K.
and in failing to pay certain royalties due to Integrated. Integrated also
maintains that as a result of such breaches, plaintiff is not entitled to the
recipes, technology or know how. The action is in the final stages of discovery.
The Corporation believes that it is unlikely that the outcome of this litigation
will have a material adverse affect on the Corporation's financial position.

         The Weight Watchers International Litigation

         The Company is involved in two cases pending in New York State Supreme
Court, Nassau County, captioned CoolBrands International, Inc., et al. v. Weight
Watchers International, Inc., et al., Index No. 010926/04 ("CoolBrands I"), and
Weight Watchers International, Inc. v. CoolBrands International, Inc., et al.,
Index No. 04/012557 ("CoolBrands II"). In CoolBrands I, the Company asserts
claims for breach of an exclusive trademark license with Weight Watchers
International, Inc. ("WW"), arising, inter alia, from WW's entry into a future
license agreement with Defendant Wells' Dairy, Inc. ("Wells'") in violation of
the Company's contractual rights which prohibit entry into such future licenses
during the exclusive period of the Company's license. Defendants WW and Wells'
assert counterclaims against the Company in CoolBrands I which allege an
anticipatory breach of the same license agreement with the Company arising from
a claimed plan by the Company to abuse its non-exclusive rights under that
license. CoolBrands I is presently in discovery on an expedited schedule. In
CoolBrands II, WW asserts virtually identical claims for anticipatory breach of
contract as are asserted in WW's counterclaims in CoolBrands I. The Company has
moved to dismiss CoolBrands II. WW and Wells' have each moved for a preliminary
injunction on their counterclaims in CoolBrands I. The Company has also moved
for a preliminary injunction, and has obtained a TRO against WW and Wells'
misuse of UPC codes in CoolBrands I.

The Company is a party to legal proceedings and disputes with franchisees,
former franchisees and others, which arise in the ordinary course of business.
In the opinion of the Company, it is unlikely that the liabilities, if any,
arising from the legal proceedings and disputes will have a material adverse
effect on the consolidated financial position of the Company or its operations.




                                       16


<PAGE>

ITEM 4:  SELECTED CONSOLIDATED FINANCIAL INFORMATION

         The following table presents selected historical consolidated financial
data of CoolBrands, including the accounts of all companies acquired, for the
periods indicated. These companies, all of which were acquired in transactions
accounted for as purchases during the past five (5) years, are included from
their respective dates of acquisition. The selected historical consolidated
financial data for CoolBrands as of and for the five years ended August 31, 2004
is derived from the audited Consolidated Financial Statements of CoolBrands.

         The Company's 2004 financial statements reflect the July 1, 2003
acquisition of the general partner interest and majority of the total
partnership interest in Americana Foods LP (50.1% owned) and the July 6, 2003
acquisition of Dreamery ice cream and Whole Fruit sorbet brands from Dreyer's
Grand Ice Cream, Inc., as well as the right to the license for the Godiva ice
cream brand, which was assigned to the Company and substantially all of the
Haagen-Dazs frozen dessert distribution assets from Nestle Ice Cream Company,
LLC. These acquisitions were accounted for under the purchase method of
accounting and the Consolidated Statements of Earnings include the results of
these acquisitions from the date of acquisition. In fiscal 2004, the revenues
and operating results from Americana Foods, Eskimo Pie Frozen Distribution, and
Super Premium pints represent a full year's activity as compared with
approximately two months in fiscal 2003. In the fourth quarter of fiscal 2004,
the revenues and operating results represent a full quarter's activity as
compared with approximately two months in fiscal 2003. The first quarter of
fiscal 2005, ended November 30, 2004, will be the first quarter following these
acquisitions in which the Consolidated Statement of Earnings for the quarter can
be directly compared with the prior year period.

         The selected consolidated financial information for the year ended
August 31, 2001 reflects to the acquisition of Eskimo Pie Corporation which
occurred October 6, 2000. The selected consolidated financial information for
the year ended August 31, 2000 reflects $26,513,000 of non-cash special charges.
These transactions affect the comparability of the information of these years
with the corresponding prior year.

                          Statement of Operations Data:
                                  (000 omitted)
                          For the Year Ended August 31,


<TABLE>
<CAPTION>
                                        2004             2003            2002            2001             2000
                                          $                $               $               $                $
                                       -------          -------         -------         -------          ------
<S>                                    <C>              <C>             <C>             <C>               <C>
Revenues                               642,820          357,273         242,222         177,610           97,488
Net earnings (loss)                     48,843           31,704          20,984          11,128          (27,826)
Earnings (loss) per share
  - Basic                                 0.88             0.61            0.44            0.24            (0.61)
  - Diluted                               0.87             0.59            0.42            0.24            (0.61)
</TABLE>

                               Balance Sheet Data:
                                  (000 omitted)
                                As At August 31,

<TABLE>
<CAPTION>

                                        2004            2003             2002            2001            2000
                                         $                $                $               $               $
                                       -------          -------         -------         -------          ------
<S>                                    <C>              <C>             <C>             <C>               <C>
 Working capital                       159,355           85,734          57,354          43,408           30,053
 Total assets                          411,813          313,850         283,662         225,876          142,300
 Total long-term liabilities            33,783           47,377          38,469          42,710            1,158
 Shareholders' equity                  269,607          187,851         170,708         132,637          114,091
</TABLE>




                                       17


<PAGE>

     Historical Review of the Last Eight Quarters Ending on August 31, 2004
                                  (000 omitted)

The chart below identifies the selected financial information concerning the
last eight quarters.


<TABLE>
<CAPTION>

                                      August 31,        May 31,       February 29,        November 30,
                                         2004            2004             2004               2003
                                          $                $               $                  $
                                      --------        ---------       ----------          ------------
<S>                                    <C>              <C>             <C>                <C>
Revenues                               178,693          187,170          138,507             138,450
Net earnings                            14,704           14,989           12,481               6,669
Earnings per share
  - Basic                                 0.26             0.27             0.22                0.12
  - Diluted                               0.26             0.26             0.22                0.12
</TABLE>


<TABLE>
<CAPTION>
                                     August 31,         May 31,       February 28,        November 30,
                                        2003             2003            2003                2002
                                          $                $               $                  $
                                      --------        ---------       ----------          ------------
<S>                                    <C>              <C>             <C>                <C>
Revenues                               154,014           81,908          57,052              64,299
Net earnings                            14,836            8,957           5,188               2,723
Earnings per share
  - Basic                                 0.29             0.17            0.10                0.05
  - Diluted                               0.27             0.17            0.10                0.05
</TABLE>


Dividend Policy

         Determinations to pay future dividends and the amount thereof will be
made by the Board of Directors and will depend on future earnings, capital
requirements, financial condition and other relevant factors. The Corporation
intends to retain future earnings to support current operations and to provide
funds for future acquisitions and therefore does not anticipate paying dividends
in the foreseeable future.

ITEM 5:  MANAGEMENT DISCUSSION AND ANALYSIS

         Reference is made to the information under the heading "Management's
Discussion and Analysis" on pages 18 to 35 of the Corporation's 2004 Annual
Report to Shareholders for management's discussion and analysis of the
Corporation for the fiscal year ended August 31, 2004, which discussion and
analysis are specifically incorporated herein by reference.

ITEM 6:  MARKET FOR SECURITIES

         The Subordinate Voting Shares of the Corporation are listed and posted
for trading on The Toronto Stock Exchange, under the trading symbol COB.SV.A

ITEM 7:  DIRECTORS AND OFFICERS

         The following table sets forth the name, municipality of residence,
position held with the Corporation and principal occupation of each of the
officers and directors of the Corporation.

         Each director holds office until the close of business of the annual
meeting of shareholders of the Corporation following his election unless his
office is earlier vacated in accordance with the Corporation's articles of
association.



                                       18


<PAGE>

<TABLE>
<CAPTION>

Name and
Municipality of Residence             Positions with the Corporation          Principal Occupation(1)
-------------------------             ------------------------------          --------------------
<S>                                   <C>                                      <C>
Michael Serruya(2)(3)                 Co-Chairman and Director                Co-Chairman  of  the  Board  of the
Thornhill, Ontario                                                            Corporation

Richard E. Smith(2)(3)                Co-Chairman, Co-Chief Executive         Officer of the Corporation
Southampton, New York                 Officer and Director

David J. Stein(4)                     President, Co-Chief Executive Officer   Officer of the Corporation
Southampton, New York                 and Director

Aaron Serruya                         Executive Vice-President,               Officer of the Corporation
Thornhill, Ontario                    Secretary and Director

David M. Smith(2)(3)                  Chief Operating Officer and Director    Officer of the Corporation
Manhasset, New York

Romeo DeGasperis(2)(3)(4)             Director                                Vice President, Con-Drain Company
Toronto, Ontario                                                              Ltd.

Gary P. Stevens                       Chief Financial Officer                 Officer of the Corporation
Las Vegas, Nevada

Timothy Timm                          Vice-President, Manufacturing and       Officer of the Corporation
Green Bay, Wisconsin                  Quality Assurance

John M. Kaczynski                     Senior Vice-President, Sales and        Officer of the Corporation
Marshfield, Massachusetts             Marketing

William J. Weiskopf                   President, Value America Flavors and    Officer of the Corporation
Midlothian, Virginia                  Ingredients

Paul C. Samuel                        Vice-President, Sam-Pack Flexible       Officer of the Corporation
Randolph, New Jersey                  Packaging

Fred J. Fullerton, Jr.                Vice-President, Sales-Foodservice       Officer of the Corporation
Russellville, Arkansas

John R. LeSauvage                     Vice-President, Operations              Officer of the Corporation
Chappaqua, New York

J. Leo Glynn                          President, Eskimo Pie Frozen            Officer of the Corporation
Mahwah, New Jersey                    Distribution, Inc.

</TABLE>

(1)  The employment history of the above-noted directors and officers is
     disclosed below.

(2)  Member of Audit Committee.

(3)  Member of Compensation Committee.

(4)  Member of Corporate Governance Committee.




                                       19


<PAGE>

Michael Serruya - Co-Chairman of the Board and Director of the Corporation. Mr.
Michael Serruya is a co-founder of the Corporation and has been actively
involved in its development since its inception in 1986. Mr. Michael Serruya has
been a Director of the Corporation since 1994 when the Corporation first went
public. Mr. Serruya is primarily involved in the identification of potential
acquisitions and review of the Corporation's business plan. Michael Serruya was
the co-recipient in 1992 and 1993 of the Academy of Collegiate Entrepreneurs
Award for North America. Michael Serruya is the brother of Aaron Serruya.

Richard E. Smith - Co-Chairman, Co-Chief Executive Officer and Director of the
Corporation. Mr. Richard E. Smith was Chairman of the Board, Chief Executive
Officer and a Director of Integrated Brands Inc. from October 1985 until the
acquisition of Integrated Brands Inc. by a wholly owned subsidiary of the
Corporation in March 1998. Mr. Richard E. Smith has been a Director of the
Corporation since March 1998. Together with Mr. David Stein, he is responsible
for development of the Corporation's business plan. Mr. Richard E. Smith has
also been the Chairman of the Board, Secretary and a Director of Calip Dairies,
Inc. for more than the past five years. Calip Dairies, Inc. owns the trademark
and trade names of Dolly Madison Ice Cream. Mr. Smith was the founder of Frusen
Gladje Ltd. in 1980 and was its Chairman of the Board and Chief Executive
Officer until the sale of Frusen Gladje to Kraft, Inc. in 1985.

David J. Stein - President, Co-Chief Executive Officer and Director of the
Corporation. Mr. David J. Stein was a Vice President of Integrated Brands Inc.
since December 1989 until the acquisition of Integrated Brands Inc. by a wholly
owned subsidiary of the Corporation in March 1998. Mr. David J. Stein has been a
Director of the Corporation since March 1998. Together with Mr. Richard E.
Smith, he is responsible for development and execution of the Corporation's
business plan.

Aaron Serruya - Executive Vice President and Director of the Corporation. Mr.
Aaron Serruya is a co-founder of the Corporation and has been actively involved
in its development since its inception in 1986. Mr. Aaron Serruya has been a
Director of the Corporation since 1994 when the Corporation first went public.
His day-to-day responsibilities include selling all new franchises and resales,
finding new locations, and research and development. Aaron Serruya was the
co-recipient in 1992 and 1993 of the Academy of Collegiate Entrepreneurs Award
for North America. Aaron Serruya is the brother of Michael Serruya.

David M. Smith - Vice Chairman, Chief Operating Officer and Director of the
Corporation. Mr. David M. Smith was a Vice President of Integrated Brands Inc.
from December 1989, and a Director of Integrated Brands Inc. from September 1993
until the acquisition of Integrated Brands Inc. by a wholly owned subsidiary of
the Corporation in March 1998. Mr. David M. Smith has been a Director of the
Corporation since March 1998. Mr. David M. Smith manages the overall operations
of the Corporation and directly oversees the information systems for the
Corporation and the marketing, and new product development functions of the
Corporation. Mr. David M. Smith is Mr. Richard E. Smith's son.

Romeo DeGasperis is Vice President of Con-Drain Company Ltd., a family business
in which he has worked for over 18 years. Mr. Romeo DeGasperis manages the
operations and personnel of the company and is responsible for tendering new
projects as well as all the networking and communications for the company. Mr.
Romeo DeGasperis has been a Director of the Corporation since 2000.

Gary P. Stevens - Chief Financial Officer of the Corporation. Mr. Stevens has
been President of Integrated Brands Inc. since June 1990 and Treasurer and Chief
Financial Officer since April 1989. He was a Vice Chairman of the Board of
Integrated Brands from August 1988 until June 1990. Mr. Stevens became a
Director of Swensen's Inc. in October 1987 and served as President of Swensen's
Inc. from October 1987 until June 1990. He joined Swensen's in August 1986 as
Senior Executive Vice President - Finance and Administration.




                                       20


<PAGE>

Timothy Timm - Vice-President, Manufacturing and Quality Assurance. Mr. Timm has
been Vice-President, Manufacturing and Quality Assurance since March 1998. He
was Vice-President of Manufacturing with Integrated Brands Inc. since 1988.
Prior to 1988, Mr. Timm held various manufacturing relations positions in the
ice cream industry.

William J. Weiskopf - President, Value American Flavors and Ingredients. Mr.
Weiskopf became President of Value American Flavors and Ingredients in October
2000. Since August 1997, Mr. Weiskopf was Vice-President and General Manager,
Flavors Division of Eskimo Pie Corporation. From November 1995 to August 1997,
Mr. Weiskopf was National Sales Manager, Flavors.

Paul C. Samuel - Vice-President, Sam-Pack Flexible Packaging. Mr. Samuel has
been Vice-President, Sam-Pack Flexible Packaging since October 2000. Since July
1988, Mr. Samuel was Plant/General Manager of the packaging operation.

Fred J. Fullerton, Jr. - Vice-President, Sales - Foodservice. Mr. Fullerton
became Vice-President of National Accounts for Eskimo Pie Foodservice in October
2000 and is responsible for multiple unit chain account sales. In 1994, Mr.
Fullerton became Director of Business Development for Eskimo Pie Foodservice.

John R. LeSauvage - Vice-President, Operations. Mr. LeSauvage has been
Vice-President, Marketing since June 1999, when he joined the Corporation. Since
1974, Mr. LeSauvage has held various sales and marketing related positions in
the frozen dessert industry.

J. Leo Glynn - President, Eskimo Pie Frozen Distribution, Inc. Mr. Glynn has
been president of Eskimo Pie Frozen Distribution Inc. since June 2003, when he
joined the Corporation. Mr. Glynn has twenty-five years of sales and general
management experience in DSD distribution in the ice cream and bakery
industries.

The Corporation does not have an executive committee of its Board of Directors.

         As of August 31, 2004, all directors and officers of the Corporation,
as a group beneficially own or exercise control of approximately 54.8% of the
votes attaching to all outstanding shares of the Corporation, comprised of the
following: 155,031 multiple voting shares held directly by The Serruya Family
Trust and 4,078,301 multiple voting shares held by 1082272 Ontario Inc., a
wholly-owned subsidiary of The Serruya Family Trust; 1,419,467 multiple voting
shares held by Richard E. Smith, 288,106 multiple voting shares held by David M.
Smith and 45,138 multiple voting shares held by David J. Stein; and
approximately 35,728 subordinate voting shares held by the remaining officers of
the Corporation. In addition, Michael Serruya owns 56,000 subordinate voting
shares, Aaron Serruya owns 56,149 subordinate voting shares and Richard E. Smith
owns 8,300 subordinate voting shares.




                                       21


<PAGE>

ITEM 8:  ADDITIONAL INFORMATION

          The Corporation will provide upon request to the Secretary of the
Corporation:

          (a)  when the securities of the Corporation are in the course of a
               distribution pursuant to a short form prospectus or a preliminary
               short form prospectus has been filed in respect of a distribution
               of its securities,

                (i) one copy of this Annual Information Form, together with one
                    copy of any document, or the pertinent pages of any
                    document, incorporated by reference in this Annual
                    Information Form;

               (ii) one copy of the comparative consolidated financial
                    statements of the Corporation for its most recently
                    completed fiscal financial year together with the
                    accompanying report of the auditor and one copy of any
                    interim consolidated financial statements of the Corporation
                    subsequent to the consolidated financial statements for its
                    most recently completed financial year;

              (iii) one copy of the information circular of the Corporation in
                    respect of its most recent Annual Meeting of Shareholders
                    that involved the election of directors or one copy of any
                    annual filing prepared in lieu of that information circular,
                    as appropriate; and

               (iv) one copy of any documents that are incorporated by reference
                    into the preliminary short form prospectus or the short form
                    prospectus and are not required to be provided under (i) to
                    (iii) above; or

          (b)  at any other time, one copy of any other documents referred to in
               (a)(i), (ii) and (iii) above.

         Additional information including directors' and officers' remuneration
and indebtedness, principal holders of the Corporation's securities, options to
purchase securities and interests of insiders in material transactions, where
applicable, is contained in the Corporation's information circular for its most
recent annual meeting of shareholders that involved the election of directors,
and additional financial information is provided in the Corporation's
comparative financial statements for its most recently completed financial year.

         The Board of Directors has approved the contents of this Annual
Information Form.




                                       22