Health Sciences Group to enter into new distribution agreement with DNP

23/11/05 Health Sciences Group, Inc., provider of innovative nutraceutical products and functional food ingredients derived from natural sources, has announced that it is entering into a non-exclusive sales and distribution agreement that establishes a minimum sales requirement of $2 million for Shugr Natural Sweetener(TM) and Shugr Sweet(TM) over the coming twelve months with distributor DNP International, Inc. DNP International is a leading importer and distributor of raw materials to manufacturers in the food, beverage and nutritional supplement industries, among others.

Under the terms of the agreement, DNP will distribute Shugr as a raw ingredient to established manufacturers in the flavor, nutritional, nutraceutical, food, confection and pharmaceutical industries. In addition, DNP will maintain a sales volume in accordance with established annual sales targets totaling $2.0 million in 2006, $4.3 million in 2007 and $5.6 million in 2008. The agreement is expected to be signed this week.

Shugr Natural Sweetener(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 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.

Shugr Sweet(TM) is a high-efficiency sweetener designed for commercial applications which is based on the Shugr Natural Sweetener formula. Offered in 5X and 10X versions, Shugr Sweet includes an increased amount of sucralose to achieve heightened sweetness level that is equivalent to five and ten times the sweetness of cane sugar, respectively.

Since making its debut in February of this year, Shugr Natural Sweetener(TM) has been steadily gaining traction in the specialty retail channel. To date, Shugr can be found at several retail outlets including GNC, Vitamin Shoppe, Meijer, ValueDrug and online at drugstore.com.

In addition, the company is negotiating several distribution agreements for Shugr with companies in North America and abroad. One such agreement is an exclusive arrangement with an established Japanese distributor who has access to over 50,000 retail doors in Japan. This agreement calls for a minimum annual sales requirement of $1.1 million in 2006, $3.5 million in 2007 and $7.5 million in 2008.

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 Irvine, Calif., DNP has locations in Los Angeles, Chicago and New Jersey.

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.

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