HEALTH SCIENCES GROUP INC (HESG) SPO
|Company Name||HEALTH SCIENCES GROUP INC|
|Company Address||270 EAST EAU GALLIE BLVD.
INDIAN HARBOUR BEACH, FL 32937
|CEO||Fred E. Tannous|
|Employees (as of 9/30/2005)||2|
|State of Inc||DE|
|Fiscal Year End||12/31|
|Shares Over Alloted||--|
|Shareholder Shares Offered||8,694,639|
|Lockup Period (days)||180|
|Quiet Period Expiration||4/17/2006|
We will not receive any proceeds from the sale of the shares of common stock by the selling shareholders.
The business of developing and distributing nutritional and personal care products, such as those we sell and distribute is highly competitive. Numerous manufacturers, distributors, and retailers compete for consumers and distributors. We expect to compete directly with other entities that develop, manufacture, market, and distribute products in each of our product lines. We compete with these entities by emphasizing the underlying science, value, and high quality of our products. However, many of our competitors are substantially larger and have greater financial resources and broader name recognition. Our markets are highly sensitive to the introduction of new products that may rapidly capture a significant share of those markets. The nutritional supplement market is characterized by: · Large selections of essentially similar products that are difficult to differentiate; · Retail consumer emphasis on value pricing; · Constantly changing formulations based on evolving scientific research; · Low entry barriers resulting from low brand loyalty, rapid change, widely available manufacturing, low regulatory requirements, and ready access to large distribution channels; and · A lack of uniform standards regarding product ingredient sources, potency, purity, absorption rate, and form. Similar factors are also characteristic of products comprising our other product lines. There can be no assurance that we will be able to effectively compete in this intensely competitive environment. In addition, nutritional and personal care products can be purchased in a wide variety of channels of distribution, including retail stores. Our product offerings in each product category are relatively few compared to the wide variety of products offered by many of our competitors and are often premium priced. As a result, our ability to remain competitive depends in part upon the successful introduction of new products and enhancements of existing products.
We are a vertically integrated provider of innovative products and services in the nutraceutical and cosmeceutical industries. When we use the term "vertically integrated" we mean that we purchase raw materials and manufacture the end product from such materials. The term "nutraceutical" means
nutritional food supplements. The term "cosmeceutical" means products which improve the appearance of the skin. We offer value-added ingredients, bioactive formulations, and proprietary technologies used in nutritional supplements, functional foods and beverages, and skin care products. When we use the term "bioactive formulations" we mean formulations of vitamins, herbs, minerals and other chemical compounds, which when ingested, affect the chemical processes taking place within the human organism. The term "value-added ingredients" means raw materials, such as herbs, which are combined, processed and formulated in accordance with customer specifications and as a result have greater value to the customer than the raw material value of the ingredients. "Nutritional supplements" means vitamins, minerals, herbs and chemical compounds designed to supplement nutrients derived from food for the purpose of maintaining the bodily requirements for proper health and nutrition. "Functional foods" means nutritional supplements which provide some of the same material elements as found in foods. We develop and sell high-margin products based on proprietary technologies in the areas of transdermal drug delivery, cosmeceuticals, and integrative medicine to customers who manufacture and distribute compounded pharmaceuticals, functional foods, skin care products and cosmetics. By "transdermal" drug delivery we mean the ability of a lotion to penetrate the human skin and deliver a chemical compound into the bloodstream. By "integrative medicine" we mean the combination of traditional medicine with alternative health care treatments. We also developed a number of proprietary formulations which combine vitamins, herbs and other food supplements with traditional over-the-counter generic drugs. Our business strategy is to develop new customer relationships in our core business, expand our marketing program by increasing existing product lines, marketing through new outlets and securing new distribution relationships, and by so doing increase our revenues. We had net losses attributed to common shareholders of $10,949,657, $8,447,276, and $4,283,936 for our fiscal years ended in December 31, 2004, 2003, and 2002. Our cumulative losses for the last three years amount to $23,680,869. Our losses are substantial and increasing. Our product offerings fall into the categories which are described below: Transdermal Products. We produce and sell a line of topical and transdermal drug delivery products in the form of a neutral base to which prescribed drugs can be added thereby enabling medicinal and therapeutic treatments to penetrate the skin. These products include a variety of Hormone Replacement Therapy (HRT) bases, high absorption liposomal bases, anti-inflammatory bases and various skin care products, such as moisturizers and sunscreens. New Products. We plan to introduce a new product line, called CoCare, which is based on pharmaceutical and nutraceutical ingredient combinations. Our CoCare products are based upon our patented technology which combines over-the-counter pharmaceutical drugs with synergistic herbal ingredients. Our CoCare product line includes a combination of an anti-inflammatory product such as acetametophin with a synergistic formulation of select anti-oxidants such as green tea, astragalus root and elderberry and a liver protectant such as the herb, milk thistle. We also have patents pending for products which include combinations of over the counter acid reflux, migraine headache and pain relief products combined with herbal products that mix synergistically with the over-the counter pharmaceutical product with which it is combined. We have recently introduced and commenced marketing branded nutraceutical products addressing weight loss, cholesterol reduction, diabetes management and arthritis relief, under the Swiss Research brand in parallel to the consummation of our acquisition of Swiss Research, Inc. ------- Our executive offices are located at 6080 Center Drive, 6 th Floor, Los Angeles, California 90045, and our telephone number is (310) 242-6700. We are a Colorado corporation. Our website is at www.healthsciencesgroup.com.
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