Stevia supplier GLG Life Tech has insisted it is “very confident” in the future of its business despite continued delays in filing its latest annual accounts.
The Canada-based group has yet to report its financial results for 2011 amid delays in auditing transactions.
The delays have led to an order to halt trading in GLG Life Tech’s shares, which prompted a cash injection from its chief executive. The company’s auditor has also resigned and the firm has also decided to delist from the Nasdaq stock exchange.
Speaking to just-food yesterday (7 June), a spokesperson for GLG Life Tech said the US$6.5m in financing from chairman and CEO Dr Luke Zhang was “a proactive measure” while trading in the company’s shares was halted. “The financial reporting delays have resulted in a cease trade order for stock during which time the company is prohibited from raising capital. There are no insolvency proceedings that GLG is subject to,” the spokesperson said.
Thomson Penner & Lo has replaced PricewaterhouseCoopers as GLG Life Tech’s auditor. Last week, GLG Life Tech said PwC had resigned and the stevia supplier said the accountants had needed an investigation from another accounting firm on their opinion of the company’s accounts.
“We assessed the costs, delays, and uncertainties associated with the process proposed by PwC and determined that it was more likely to obtain a complete audit in a reasonable time and at a cost that it could afford if the Company appointed its previous auditor,” the spokesperson said.
Reflecting on the NASDAQ delisting, he said GLG Life Tech remained on the Toronto Stock Exchange. “With regard to our Nasdaq delisting, we follow many companies (notably Daimler and Hitachi) that have taken this path. The expense and management time commitment to maintaining US registration, SOX in particular, is onerous. Please note we are maintaining our listing on the TSX which is also a top tier stock exchange in North America. When trading resumes, it will be easy for our US shareholders to trade their shares on the TSX.”
The events have added to what was an up-and-down 2011 for GLG Life Tech. It faced lawsuits over allegations that it had failed to disclose certain information under US securities rules. It saw sales fall amid problems with the after-taste of its stevia, which led to product launches being delayed. However, GLG Life Tech did secure a deal to supply stevia to global ingredients group International Flavors & Fragrances.
The spokesperson said GLG Life Tech had looked at “after-taste issues” and said customers were noticing the results.
“In terms of addressing the main issue of the stevia industry, after-taste, GLG’s consumer product subsidiary AN0C has had great success with its proprietary all natural zero calorie beverage formulations that addressed after taste issues. We have subsequently set up a subsidiary called AN0C Stevia Solutions to bring their better tasting stevia formulations to the international market for food and beverage companies,” he said. “We have several large customers already benefiting from our expertise and we are confident that we can solve any aftertaste issues food and beverage companies may have.
The spokesperson also expressed the company’s optimism about its future and in the outlook for stevia. Food and drink manufacturers are using the intense sweetener in their products as the ingredient is natural and zero-calorie. However, there have been indications that demand for the sweetener has not reached levels expected by some suppliers.
“Ultimately we are very confident about our future, and in the large opportunity that exists in the stevia market,” the spokesperson said. “Since the beginning of the year, GLG has increased its customer base and shipped products to a variety of both regional and global manufacturers. New customers include those in the tabletop sweetener, flavour houses, bottled beverages, pharmaceutical, prepared food, and supplement product markets. We remain very bullish on the stevia market based on the growing number of food and beverage companies who are introducing products sweetened with stevia and the increasing number of countries where stevia is permitted to be used as a sweetener.”