GRASS VALLEY, Calif.--(BUSINESS WIRE)--Sept. 10, 2002



Biozhem Cosmeceuticals Inc. (OTCBB:BZHM), a developer and marketer of advanced skin care products, today announced that it has filed for arbitration against Thane International, a direct marketing company with which Biozhem had previously signed a Management Services Agreement.



Section 10 of the agreement provides, in relevant part, that:



"Any dispute between the Parties hereto shall be resolved by binding arbitration in Riverside County, California, pursuant to the then-existing arbitration rules of the American Arbitration Association ... (T)he date of arbitration shall be set no later than sixty (60) days after service of the notice of arbitration."



The subject matter of the arbitration involves the parties' respective rights and responsibilities under the agreement. After receiving the arbitration demand, Thane International contacted Biozhem and requested an opportunity to discuss the issues before committing fully to the arbitration process.



Therefore, Biozhem will temporarily refrain from commenting about the specifics that prompted it to commence arbitration, pending the outcome of the discussions. If Biozhem and Thane International are unable to resolve the dispute and should Biozhem not prevail through arbitration, Biozhem would be materially affected and might be forced to cease operations.



Statements about the company's future expectations and all other statements in this news release other than historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and as that is defined in the Private Litigation Reform Act of 1995. The company intends that such forward-looking statements be subject to the safe harbor created thereby. Since these statements involve risks and uncertainties and are subject to change at any time, the company's actual results could differ materially from expected results.