We intend to retain overall control of our technology, product development and wholesale sales at a global level and we will engage international, national and regional existing wholesale distributors to market and distribute our products at a local level. We believe that this wholesale distribution approach will significantly aid in limiting our fixed operating and sales costs. In addition, we intend to develop and maintain a "revenue share" program with distributors, which we are currently formulating and which we intend to take into account the local factors and sales dynamics of each individual market.
In addition to utilizing local and regional distributor networks, we intend to use international trade shows and industry conferences to gain market exposure and brand recognition, such as Apimundia. We plan to work with leading entomologists and apiarists to enhance our marketing efforts. As sales volume increases, we plan to open additional regional offices and to continue to manage sales activities in each of our defined geographical regions and to provide marketing support to local and regional distributors in each area. Competition Argentina
With respect to the Argentine bee healthcare market, as noted above, we believe that there are at least 20 different products registered and approved by national regulatory authorities in Argentina that claim to treat one of the several reported causes of CCD. Approximately half of the products are antibiotics and the other half are remedies against Varroa Acariasis, a condition caused by the varroa mite, a parasite that affects the bee population in many countries. We believe that none of the products currently available in Argentina utilize our unique and proprietary chemical compounds, which contain antimicrobial agents and compounds to fight the invertebrate iridescent virus, and its interaction with the Nosema fungus, components to contrast the side effects of neonicotinoids used in pesticides. In addition, we believe that the current accepted practice advocated by associations of entomologists and apiarists and cooperatives of beekeepers is to avoid the use of antibiotics in treating bees and CCD-related problems. Our proprietary chemical compound does not contain antibiotics and also yields a high concentration of isoleucine, an amino acid commonly used by Argentine beekeepers to nourish their bees colonies.
In addition, we do not believe that the Argentina beekeeping market currently has a fully automated chemical compound distribution system like the BeesFree Dispenser, which will allow us to compete in the Argentine bee healthcare industry with respect to our chemical compound as well as our delivery system.
We believe that we also possess strategic advantages over potential competitors (e.g. Laboratorios Lavet, El Gigante, Roteh, Bayer Argentina) with respect to the value that we will deliver to customers. Based upon our analysis of the Argentine market performed in October, we have determined that the prices of competitor products, which are generally limited to treating one CCD-related cause and therefore are not as comprehensive as our proprietary chemical compound, range from $45 to $70 per liter. Although we believe that we will be able to price our product as the lowest in the market, at $40 per liter, and still maintain competitive gross profit margins. Based upon our calculations, on a per month basis, the average end-user cost of our chemical compound that treats the comprehensive causes of CCD will be approximately $2 to $3 per colony per month, excluding the cost of the BeesFree Dispenser, as compared to $3 to $ 4.50 per colony per month, that only treats one cause of CCD, based upon polling of beekeepers at Apimondia, the world's largest conference and fair on the beekeeping industry, held in Buenos Aires in September 2011.
United States
As noted above, we believe that there is only one other company in the U.S., Beeologics, LLC, that is specifically focused on the bee healthcare industry. Beeologics, LLC has recently been acquired by Monsanto Company, a global provider of agricultural products, which may provide Beeologics, LLC with significantly greater resources and opportunities than we possess at this time.
We believe Beeologics, LLC is currently focusing on the treatment of the Israeli Acute Paralysis Virus, which is just one of the generally accepted causes of the CCD syndrome. Beeologics, LLC's products, to our knowledge, are not intended to treat other known causes of CCD, such as bacterial infections, fungi infections, damage caused by overuse of new generations of pesticides and the low immune defense system response level of bees. However, our proprietary chemical compound and patent-pending product is designed to provide a complete bee healthcare remedy against what we believe to be the major causes of the CCD syndrome, including the invertebrate iridescent virus and its interaction with the Nosema fungus and neonicotinoids, which are used in pesticides. In addition to Beeologics, LLC, there are several other manufacturers of vertical products that market specific CCD-related problems, such as anti-Varroa strips.
In addition, we believe that Beeologic, LLC's approach to the development of its bee healthcare products differs significantly from the design of our product. Beeologics, LLC's product employs genetically modified RNAi, which is intended to introduce in the affected bee population a genetic resistance to the Israeli Acute Paralysis Virus. We believe that the design of our proprietary chemical compound has certain advantages over Beeologic, LLC's products. As noted above, our product is intended to treat the major causes of the CCD syndrome and, therefore, it contains antimicrobial agents and compounds to fight the invertebrate iridescent virus and its interaction with the Nosema fungus, components to contrast the side effects of neonicotinoids, which are used in pesticides and other nutrients and antioxidants. In contrast, Beeologic, LLC's product is genetically designed to treat only the Israeli Acute Paralysis Virus. In addition, because Beeologic, LLC's products are based upon genetically-engineered DNA and RNA, it may face a significantly more complex regulatory approval process in the U.S. than products that do not employ such technologies. We believe that Beeologics, LLC will need to seek regulatory approval from the U.S. Food and Drug Administration, the Environmental Protection Agency and the IR4 agency, which could result in lengthy research, development, testing, manufacturing and regulatory processes. Furthermore, products that are intended to genetically engineer DNA and RNA, such as the product developed by Beeologics, LLC, may be opposed by those groups with strong feelings against genetic modification. We believe that our proprietary chemical compound, which consists of chemicals that have already been approved by the U.S. Food and Drug Administration in other products made by other manufacturers, may be subject to less regulatory scrutiny when we attempt to enter the U.S. market. In addition, we believe that our proprietary chemical compound may serve as an alternative to those beekeepers who oppose the genetic modification of their bee population. To our knowledge, Beeologics, LLC has begun the regulatory approval process for its first product and has been conducting field trials in Florida, Pennsylvania and Israel and a large scale clinical trial in the United States, but has not begun marketing this product.
We believe that there is no product currently available for sale that is similar to our proprietary BeesFree Dispenser. Other bee healthcare products currently available are dispensed in various ways, depending upon the problem they claim to treat. For instance, for treatment against the varroa mite, there is a product consisting of strips of the active ingredient that are hung inside beehives. Products consisting of antibiotics and nutrients are generally dispensed in liquid or granular form by receptacles located inside beehives.
In addition to the product developed by Beeologics, LLC, there are several chemical products already available that are intended to nourish bees with nutrients and antimicrobial substances. We believe that our proprietary chemical compound is the only mixture being marketed for the bee population that combines antimicrobial agents and compounds to fight the invertebrate iridescent virus and its interaction with the Nosema fungus with other components that contrast the side effects of neonicotinoids and other nutrients and antioxidants.
We believe that our existing advantages will allow us to maintain a competitive edge over potential competitors for a sufficient period of time to provide us with the opportunity to establish a presence in key markets, and to generate revenues that will be reinvested in the research and development of new products and technologies. We intend to spend at least 10% of our gross margin on an annual basis on research and development, primarily to cover the costs of recruiting and retaining talented and skilled technical personnel and ensure that we are at the forefront of bee healthcare technology.
However, there are also numerous competitive disadvantages that we face with respect to both our products and the bee healthcare industry as a whole. As a development stage company, we lack the significant resources of larger companies, or of smaller competitors, such as Beeologics, LLC, that are subsidiaries of larger companies. Without these significant resources, we may not be able to focus on research and development, marketing and sales of our products to the same degree as companies with more substantial resources. Furthermore, we believe that our international sales strategy is the most effective method of marketing and selling our product for a company of our size. However, we may face significant challenges in managing different sales teams that are located on different continents. Additionally, larger companies with more established distribution channels in the bee healthcare industry may be able to more effectively market products that could hinder the acceptance of our proprietary chemical compound. Also, we cannot be certain that other companies have not developed similar technologies as those found in our products. In the event that our products are substantially similar to other products being marketed to the international beekeeping industry, we may not be able to achieve the market share or growth that we predict that we will achieve.
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