New World Coffee-Manhattan Bagel, Inc. (Nasdaq: NWCI) today announced that its Board of Directors has approved a 10-for-1 reverse split of the Company’s outstanding Common Stock.

This action, which is subject to shareholder approval, would reduce the outstanding Common and Common Stock issued under outstanding warrants and options to 1/10th of their present amount. A special shareholder meeting on the proposal is expected to be held next month.

“If approved, the reverse split is expected to increase the price of our Common Stock to a level where we would be able to continue to meet present and future listing requirements,” said New World Chairman Ramin Kamfar. “Equally important, this action is expected to bring the share price past the threshold needed to build interest from major institutions. This is significant, as it comes at a time when we are actively reaching out to institutions and generating institutional interest.” He added that there can be no assurance that this price level can be maintained.

As of July 30, 2001, 17,457,970 shares of Common Stock were outstanding, and 60,884,182 shares were reserved for issuance upon conversion of convertible securities and purchasable upon the exercise or outstanding options and warrants.

New World is a leading company in the ‘fast casual’ sandwich industry. The Company operates stores primarily under the Einstein Bros and Noah’s New York Bagels brands and primarily franchises stores under the Manhattan Bagel and Chesapeake Bagel Bakery brands. As of July 3, 2001 the Company’s retail system consisted of 499 company-owned stores and 303 franchised and licensed stores. The Company also operates four dough production facilities and one coffee roasting plant.

Certain statements in this press release constitute forward-looking statements or statements which may be deemed or construed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “forecast,” “estimate,” “project,” “intend,” “expect,” “should,” “would” and similar expressions and all statements which are not historical facts are intended to identify forward-looking statements. These forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors which could cause the Company’s actual results, performance (financial or operating), or achievements to differ from the future results, performance (financial or operating), or achievements expressed or implied by such forward-looking statements. The above factors are more fully discussed in the Company’s SEC filings.