HESG Health Sciences Group Inc (CE)

Health Sciences Group, Inc. (OTCBB:HESG), provider of innovative health and wellness products, announced it has signed a letter of intent to acquire the business and assets of Kalahari๏ฟฝ Limited, a specialty tea and food company whose products are sold in over 5,000 stores nationwide. Kalahari commands a leading share of the nation๏ฟฝs Red Tea market. The acquisition would be the first under the leadership of Health Sciences Group๏ฟฝs new chief executive officer Stuart Gold, who is known for his role in helping to reinvent the specialty tea experience in America and for his writings and views on building successful brands. ๏ฟฝWith research touting its high level of antioxidants and related good-health benefits, I believe red tea is poised for mainstream consumer acceptance and will become the next hot tea trend,๏ฟฝ says Gold, who plans to redesign, renew and expand the product line, as well as open new marketing channels and licensing opportunities. Studies show that some of the antioxidants found in Rooibos (pronounced ๏ฟฝRoy-boss๏ฟฝ), commonly referred to as Red Tea, may protect against cancer, heart disease and stroke. According to a report by the Sage Group, a market research firm, the U.S. tea market is valued at $6.8 billion and is expected to reach $10 billion by 2010. Of that, specialty teas, which include Red Tea, account for $1.5 billion, with sales projected to grow at a rate of 20% annually. Pursuant to the terms of the non-binding letter of intent, the consideration to the sellers for the purchase of Kalahari๏ฟฝs business and assets consist of shares of HESG common stock to be paid subject to an earn-out schedule over a period of three years. The letter of intent provides for an anticipated closing date of November 30, 2006 and is subject to certain conditions, including the company obtaining a minimum of one million dollars in financing, satisfaction of due diligence requirements and other customary closing conditions generally required for a transaction of this type. There can be no assurance that the acquisition will be consummated. About Kalahari, Limited Kalahari (www.KalahariLtd.com) offers healthy products that are Fuel for Life๏ฟฝs Safari. Kalahari teas, bottled iced teas and Fruit Trekker๏ฟฝ, 100% fruit energy bars, are sold in over 5,000 supermarkets, natural food stores and specialty retailers nationwide. About Health Sciences Group, Inc. Health Sciences Group is dedicated to developing and acquiring unique and innovative products that support and enhance a "healthstyle" with a focus on nutrition, wellness and functional well-being. For more information, visit www.HealthSciencesGroup.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. Health Sciences Group, Inc. (OTCBB:HESG), provider of innovative health and wellness products, announced it has signed a letter of intent to acquire the business and assets of Kalahari(R) Limited, a specialty tea and food company whose products are sold in over 5,000 stores nationwide. Kalahari commands a leading share of the nation's Red Tea market. The acquisition would be the first under the leadership of Health Sciences Group's new chief executive officer Stuart Gold, who is known for his role in helping to reinvent the specialty tea experience in America and for his writings and views on building successful brands. "With research touting its high level of antioxidants and related good-health benefits, I believe red tea is poised for mainstream consumer acceptance and will become the next hot tea trend," says Gold, who plans to redesign, renew and expand the product line, as well as open new marketing channels and licensing opportunities. Studies show that some of the antioxidants found in Rooibos (pronounced 'Roy-boss'), commonly referred to as Red Tea, may protect against cancer, heart disease and stroke. According to a report by the Sage Group, a market research firm, the U.S. tea market is valued at $6.8 billion and is expected to reach $10 billion by 2010. Of that, specialty teas, which include Red Tea, account for $1.5 billion, with sales projected to grow at a rate of 20% annually. Pursuant to the terms of the non-binding letter of intent, the consideration to the sellers for the purchase of Kalahari's business and assets consist of shares of HESG common stock to be paid subject to an earn-out schedule over a period of three years. The letter of intent provides for an anticipated closing date of November 30, 2006 and is subject to certain conditions, including the company obtaining a minimum of one million dollars in financing, satisfaction of due diligence requirements and other customary closing conditions generally required for a transaction of this type. There can be no assurance that the acquisition will be consummated. About Kalahari, Limited Kalahari (www.KalahariLtd.com) offers healthy products that are Fuel for Life's Safari. Kalahari teas, bottled iced teas and Fruit Trekker(R), 100% fruit energy bars, are sold in over 5,000 supermarkets, natural food stores and specialty retailers nationwide. About Health Sciences Group, Inc. Health Sciences Group is dedicated to developing and acquiring unique and innovative products that support and enhance a "healthstyle" with a focus on nutrition, wellness and functional well-being. For more information, visit www.HealthSciencesGroup.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.