Health Sciences Group Expands Its Product Offerings within Functional Foods and Beverages

LOS ANGELES, Jan 12, 2004 -- Health Sciences Group, Inc. (OTCBB: HESG), an integrated provider of innovative products and services to the nutraceutical, pharmaceutical, and cosmeceutical industries, today announced plans to introduce a new line of ephedra-free weight-loss formulations for functional food and beverage applications.

The company's proprietary blend of special botanical and herbal extracts is designed to produce high thermogenic activity as a weight-loss supplement, much like its Tri-Xanthin(TM) product, while offering the characteristics and solubility of a functional food ingredient. These formulations, which can be added to snack foods, energy bars, and soft drinks, are designed to boost metabolism and increase energy without the use of the now banned ephedra.

"We believe that the acceptance of our new ephedra-free weight-loss formulations will be particularly strong ," said Joe Schortz, President and Chief Executive Officer of HESG's QBI division. "Last quarter we successfully introduced Tri-Xanthin(TM), our weight-loss product. As more and more retailers seek new and unique ways to differentiate their products on the grocers' shelves, it becomes that much more important for us to expand our product offerings through innovation, especially in the functional foods sector. We expect this creative expansion to translate into greater earnings potential for the company."

While sales of the global functional food market are estimated at $26 billion, indications reflect a rapid growth trend in this sector as more and more food and beverage companies introduce new products with healthy ingredients. Some recent examples include Coca Cola, which recently announced plans to supplement its Minute Maid brand orange juice with plant sterols proven to reduce cholesterol; Hain Celestial, which recently announced plans for a similar ingredient added to a rice beverage; and PepsiCo's Tropicana brand which added a sub-line of fortified juices to its product mix, including an immune-boosting variety with selenium.

QBI currently sells non-weight-loss formulations of botanical ingredients and herbs to functional food and beverage customers.

About Health Sciences Group, Inc.

Health Sciences Group, Inc., is an integrated provider of innovative products and services in the nutraceutical, pharmaceutical, and cosmeceutical industries offering value-added ingredients, bioactive formulations, and proprietary technologies used in nutritional supplements, functional foods and beverages, and skin care products. Its largest division is Quality Botanical Ingredients (QBI), a leading manufacturer, contract processor and supplier of bulk botanical materials and nutritional ingredients to the food, nutraceutical, pharmaceutical, cosmetic and pet food industries. QBI processes more than 500 herbs, dried fruits and vegetables, nutraceuticals and an extensive selection of concentrated herbal extracts, as well as standardized herbal extracts of guaranteed potency, in addition to various bioflavonoids, antioxidants and beehive products. In business for 20 years, QBI uses cryogenic (cold) processing at its New Jersey facility.

Its other divisions include XCEL Healthcare, a fully licensed, specialty compounding pharmacy delivering full service pharmacology solutions to customers with chronic ailments that require long-term therapy; and BioSelect Innovations, which develops and sells innovative, science-based products based on proprietary technologies in the areas of topical/transdermal drug delivery, cosmeceuticals, and integrative medicine to a global network of customers who manufacture and distribute compounded pharmaceuticals, functional foods, skin care products and cosmetics. For more information, visit

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934 that are based upon current expectations or beliefs, as well as a number of assumptions about future events. Although the Company believes that the expectations reflected in the forward-looking statements and the assumptions upon which they are based are reasonable, it can give no assurance that such expectations and assumptions will prove to have been correct. The reader is cautioned not to put undue reliance on these forward-looking statements, as these statements are subject to numerous factors and uncertainties, including without limitation, the independent authority of the special committee to act on the matters discussed, the successful negotiation of the potential acquisition and disposal of transactions described above, successful implementation of the company's business strategy and competition, any of which may cause actual results to differ materially from those described in the statements. In addition, other factors that could cause actual results to differ materially are discussed in the Company's most recent Form 10-QSB and Form 10-KSB filings with the Securities and Exchange Commission.

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