Genufood Unlocks Additional $20 Million in Fundingadmin
Genufood Energy Enzyme Corp. (OTCBB: GFOO), an exporter and
distributor of nutraceutical enzyme products, recently announced a new
two-year $20 million equity purchase agreement with Southridge LLC. The
agreement provides the funding necessary to support the company’s
commercialization strategy. In this article, we’ll take a look at this
commercialization strategy and why investors in the $140 billion global nutraceutical market may want to take a closer look.
Growing Market for Enzymes
The global enzymes portion of the global nutraceutical market is
expected to grow at a 6.8% compound annual growth rate (“CAGR”) to reach
$8 billion in size by 2015, according to the Freedonia Group.
With many Asian economies growing at a rapid clip, many analysts expect
the fastest growth to come from this region, which is approaching North
America in size. In fact, the Asia-Pacific region is expected to have
the second-largest nutraceutical market share by 2017.
With many chronic, hereditary diseases and functional imbalances
caused by deficiency of certain enzymes, Genufood Energy Enzyme Corp.
fills a key void within this market with products that are produced from
natural fruit and vegetable extracts and available to target a wide
number of conditions (see Figure 1). The company’s focus on the Asia-Pacific region could also drive more significant growth than many U.S. players in the market.
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According to the company’s S-1 filing
with the SEC, it began marketing and exporting a limited number of
products in Taiwan in September 2010 and in Singapore and Sri Lanka in
June 2011. Management plans to expand on these sales by appointing a
Country Sole Distributor in Taiwan, China, Hong Kong, Macau, Singapore,
Malaysia, Thailand and Sri Lanka in order to distribute its enzyme
products for human consumption, animal consumption, and special outlets.
With new funding in place, Genufood Energy Enzyme Corp. plans to
develop a new packing and bottling plant in Singapore and repacking
plant in Sri Lanka in order to lower its cost of sales and enhance its
profitability and market share over the coming years. While the company
has reported minimal revenues to date, key agreements are already in
place with manufacturers of its enzyme products and sufficient cash
resources are available to begin operations.
On July 14, 2013, the company also opened its first of ten planned
retail locations, in the Suntec City Mall in Singapore. The move into
direct retail complements its existing distribution networks and is
designed to create brand awareness of its ProCellax and ProAnilax enzyme
supplements in the large and growing market. Management plans to fully
roll out its commercialization strategy within the next nine months,
according to its S-1 SEC filing.
Interested investors can watch the entire video interview on YouTube here:
In its second quarter 10-Q filing, management also already reported
early signs of success with its new business model, with revenues that
grew from $0 to $107,686 year over year. These results didn’t include
the impact of its new retail locations quite yet, but investors have an
idea of the possibilities and healthy gross margins of 46.3% could be
further improved. As of July 19, 2013, the firm also reported more than
$1.1 million in cash, putting it on stable footing.
Potential Investment Opportunity
Investors in the nutraceutical space, including companies like USANA
Health Sciences Inc. (NYSE: USNA) or Nutraceutical International Corp.
(NASDAQ: NUTR), may want to take a closer look at this emerging company.
Genufood Enzyme Corp. has raised the capital that it needs to execute
on its commercialization strategy over the next nine months, while the
equity commitments represent a strong vote of confidence in its
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Posted: November 6th, 2013 under ACCESSWIRE.