Recent Developments
In May 2011, we and WILD Flavors agreed with Domino Foods, Inc. ("Domino Sugar") to collaborate to offer all natural sweeteners made from all natural products such as cane sugar, rice, malt and stevia to the food and beverage industry. The three companies have agreed to focus their efforts to introduce a wide range of all natural, low calorie and no calorie sweetening solutions that contain Sunwin Stevia�. These innovative sweeteners can include both natural and artificial sweeteners plus sophisticated flavor modifiers based on the needs and demands of specific customers. In furtherance of these collaboration efforts, we are in the final stages of negotiating an agreement with Domino Sugar for the distribution of products jointly developed by WILD Flavors and Domino Sugar that include our stevia products.
Domino Sugar is the largest marketer of refined sugar in the United States and its affiliates produce and market the nationally recognized Domino�, C&H� and Florida Crystals� brands. In addition to the most comprehensive assortment of refined cane sugar products, Domino Sugar also produces brown rice syrup, evaporated cane juice, fondants, honey, invert sugar, malt, molasses, as well as flavor and texture modifiers. Based on this wide assortment of sweeteners, Domino Sugar has built long-term, outstanding business relationships with many consumer product companies, retailers, foodservice operators and distributors.
We are working with WILD Flavors to revise the Sunwin USA Operating Agreement and the Distribution Agreement we entered into with WILD Flavors in light of our collaboration efforts and proposed proposed business relationship with Domino Sugar. We anticipate that Sunwin USA's current operations may no longer be required. Also, we plan to continue our collaboration with WILD Flavors on the expansion opportunities in the European Union ("EU") following the recent determination by the EU Standing Committee on Food Chain and Animal Health that stevia is safe for use in food ingredients throughout the EU.
While we expect to finalize agreements with Domino Sugar and WILD Flavors in the first quarter of fiscal 2012, certain risks exist. See Item IA - Risk Factors - "We May Not Be Able to Complete Agreements With Domino Sugar and Wild Flavors Which Would Adversely Impact Our Plans to Penetrate and Compete in the U.S. Stevia Market" and "Our Revenues Have Declined and There Are No Assurances They Will Return to Historic Levels in Future Periods." |