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Health Sciences
Group (OTC BB: HESG) Delivers a Good Start |
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Based on today's news, I might have
to take HESG off double secret probation. They finally got a big
player to "bite" off a piece of SHUGR. What is in my opinion the
world's best sugar substitute might finally start selling enough to justify
its existence.
DNP has signed on the bottom
line, and guaranteed to meet certain minimum sales over the next three
years. The total number: $10.5 million over a three year
period.
So, who is DNP and why is
this such a big deal? DNP is a distributor of raw materials for
food and beverage manufacturers, and they are huge. They provide over 2,000
different items, and have delivered over 2 million lbs of Vitamin C in
one year.
As they have been telling us all
along, the time line for food manufacturers to get the product formulated
as an ingredient is 1 to 2 years. Hence, the breakdown of DNP's commitment.
They have only committed to $1 million in 2006- yet out to 2007
they have committed to $4 million and $5.5 million respectively.
This bears up what I believe is the
true upside in SHUGR. As many have pointed out, as an off the shelf
sugar substitute is it very expensive as compared to both the real thing
and other sugar substitutes. About 5 times the cost of sugar, and 3 times
the cost of Splenda. However, as it is 99.5% natural, has no glycemic index,
and bakes and mixes just like sugar, it is clearly superior to other products.
As a stand alone product, it is expensive.
3 times the cost. However, as 1 ingredient in baked goods or a beverage,
the excess cost might only add a couple of percentage points to the total
cost of production.
As long as this product remains the
best sugar substitute, I believe someone is going to come along and include
it as a sugar substitute in a high profile beverage. Perhaps a Jones Soda
or Hansen's- both stocks have gone crazy over the past year on the explosion
in energy drinks. Perhaps combined in a coffee additive. There are a million
potential uses with large food and beverage manufacturers.
So, in light of today's revelation
that HESG has finally got a closed to deal to sell SHUGR
in somewhat reasonable quantities, perhaps the company is coming out of
the woods. One would certainly think the first one is the hardest. The
Japanese distribution agreement could be right behind.
HESG- delivering results gets
you off double secret probation. Make me look good. Give me more real sales.
Now- on to Sequestrol. Let's get that rolling as well. It's put up or shut
up time, and today's is a first step in the put up process.
For those who want to accumulate
intelligently, HESG is offering the perfect entry level right now.
Certainly, today's news has the company headed in the right direction.
Now, let's hope the stock heads in the right direction.
The January move off the bottom just
below $.30 led to a surge just north of $.50. The stock has
completed a near perfect 61.8% retracement, and the volume has come done,
suggesting it is ready to surge again. Today's news just might provide
the required catalyst. There could be another $.30 move built in
here, especially if the company can continue some follow up events for
investors.
Here is the complete text of today's
press release for your review:
| Press Release Source:
Health Sciences Group, Inc.
Health Sciences Group
Signs Distribution Agreement for Shugr with DNP International
Thursday January 26, 12:00
pm ET
LOS ANGELES--(BUSINESS
WIRE)--Jan. 26, 2006--Health Sciences Group, Inc. (OTCBB:HESG - News),
provider of innovative nutraceutical products and functional food ingredients
derived from natural sources, announced today that it has signed a non-exclusive
sales and distribution agreement for Shugr with ingredients distributor
DNP International, Inc. DNP International is a leading importer and distributor
of ingredients to manufacturers in the food, beverage and nutritional supplement
industries.
"We are very pleased
to continue our relationship with DNP International, who represents some
of the best products in the industry," commented Fred E. Tannous, Co-Chairman
and CEO of Health Sciences Group. "We believe our partnership with DNP
will allow us to not only increase the exposure for Shugr(TM) but also
broaden our commercial marketing and sales reach. Through our partnership
with DNP, we now have access to the domestic ingredients marketplace and
it also moves us closer to our international expansion strategy."
Under the terms of the
new agreement, DNP will market and sell Shugr 1X and 10X as raw material
ingredient to manufacturers of foods and beverages and nutritional supplement
makers throughout the United States and Canada. DNP is subject to a minimum
sales requirement targeting $1.0 million in 2006, $4.0 million in 2007
and $5.5 million in 2008.
"DNP is proud to be the
ingredients distributor for Shugr(TM), a high-quality, zero-calorie sweetening
alternative. Over the past six months we have seen interest in Shugr rise
to the top 20 ingredients featured to our customers. Looking ahead, we
are expecting high demand for Shugr as more and more of our customers conclude
their evaluation and start placing orders in the next few months. We are
excited about the future for this alternative zero-calorie sweetener."
Shugr(TM), a zero-calorie,
low glycemic sweetener that tastes and measures like table sugar, is made
from sugars that occur naturally in such good-tasting, healthy foods such
as fruits, vegetables, corn and dairy products. Erythritol is a naturally-occurring
sugar commonly found in melon, grapes, mushrooms and soy. Tagatose comes
from dairy products, but does not affect people who are lactose intolerant.
Tagatose also provides an added health benefit -- prebiotic fiber that
promotes intestinal health, much the way yogurt does. Maltodextrin is derived
from corn sugar, which is non-GMO and gluten-free. A trace amount of sucralose
is added to give Shugr its "high note." All of these ingredients carry
a GRAS (Generally Recognized As Safe) designation for food safety from
the US Food & Drug Administration.
About DNP International,
Inc.
DNP International Co.,
Inc. imports and distributes raw material ingredients to manufacturers
in the food, beverage, dietary supplement, cosmetic and pharmaceutical
industries. Founded in 1994, DNP is one of the largest suppliers of raw
materials in the United States sourcing over two thousand different ingredients.
Headquartered in Whittier, California, DNP has locations in Los Angeles,
Chicago and New Jersey. For more information, visit www.dnpint.com.
About Health Sciences
Group, Inc.
Health Sciences Group
identifies, develops and commercializes innovative nutraceutical products
derived from natural sources to provide consumers and medical professionals
with preventative healthcare alternatives. The company markets its own
line of proprietary products based on novel technologies with clinically-supported,
GRAS-certified ingredients under its Swiss Research(TM) and Swiss Diet(TM)
brand names. For more information, visit www.HSciences.com and www.Shugr.com.
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.
Contact:
Health Sciences Group,
Inc.
Duke Best, 310-242-6700
Source: Health Sciences
Group, Inc. |
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