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Sherwood Brands, Inc.
6110 Executive Blvd., Suite 1080, Rockville, MD 20852 * (301) 881-9340

The company manufactures, markets and distributes a diverse line of brand name candies, cookies, chocolates and other food products.

Primary Underwriting Group
ManagerTierPhone
Paragon Capital CorporationLead Manager (800) 969-8173

Offering Information
AMEX:SHD Manufacturing: SIC 2066
Type of Shares:Class A Common Shares Filing Date:1/21/98
U.S. Shares:1,550,000 Offer Date:5/6/98
Non-U.S. Shares:0 Filing Price:$5.95
Primary Shares:1,550,000 Offer Price:$5.95
Secondary Shares:0 Gross Spread:$0.60
Offering Amount: $9,222,500 Selling:$0.21
Expenses:$279,000 Reallowance:$0.00
Post-IPO Shares:3,700,000
Employees:54

Legal Counsel, Auditor and Registrar
Issuer's Law Firm: Greenberg Traurig Hoffman Lipoff Rosen & Quentel
Bank's Law Firm: Tenzer, Greenblatt, Fallon & Kaplan
Registrar/Transfer Agent: Continental Stock Transfer & Trust Co
Auditor: BDO Seidman

Selected Financial Data

Dollar amounts in U.S. millions except for per share data
3 Month Ending Financials
Full Year
Audited
Income
Latest
Unaudited
Income
Prior
Audited
Income
Balance
Sheet
7/31/97 10/31/97 10/31/96 10/31/97
Revenue:$17.42$5.27$5.28Assets:$9.37
Net Income:$0.30$0.52-$0.17Curr Assets:$7.05
EPS:$0.14$0.24-$0.08Liabilities:$7.16
Prior EPS:$0.13Curr Liab:$4.54
Cash Flow/Oper:-$0.66$1.05-$0.17Equity:$2.21
Cash Flow/Fin:$1.22-$0.86$0.35Cash:$0.81
Cash Flow/Inv:-$0.82-$0.24Working Cap:$2.52

Competition
The Company faces significant competition in the marketing and sale of its products. The Company's products compete for consumer recognition and shelf space with candies, cakes, cookies, chocolates and other food products which have achieved international, national, regional and local brand recognition and consumer loyalty. These products are marketed by companies (which may include the Company's suppliers) with significantly greater financial, manufacturing, marketing, distribution, personnel and other resources than the Company. Certain of such competitors, such as Hershey Food Corporation, M&M; Mars, Inc., Nestle, S.A., Nabisco, Inc., Keebler Company and Sunshine Biscuits, Inc., dominate the markets for candy and cookie products, and have substantial promotional budgets which enable them to implement extensive advertising campaigns. The food industry is characterized by frequent introductions of new products, accompanied by substantial promotional campaigns. Competitive factors in these markets include brand identity, product quality, taste and price.

Use of Proceeds
The proceeds from the proposed offering will be used for general corporate purposes.

Additional Underwriter Compensation
Warrant to purchase 155,000 shares/units at $100.00 per share/unit.
Exercise price of $7.14 for 5 year(s), 1 year(s) from 5/6/98.
$48,000.00 consulting agreement for 2 year(s).

Warrant Information
# of Units:1,550,000
Unit Ticker: - Unit Price:$6.05
Warrant Ticker:SHWDW Warrant Price:$0.10
Warrant Exercise Date: Warrant Exercise Price:$7.50
Warrant Expiration Date:
Warrant Detachable: Yes Warrant Detach Date:
Warrant Callable: No
Unit Composition: 1 Class A Common Share + .5 Class A Warrant
Warrant Entitlement: 1 Class A Common Share


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