Functional Technologies Corp. (CA:FEB: news, chart, profile) is pleased to announce it has received a grant from PEI Business Development Inc. towards the company's ongoing development and commercialization of its proprietary Phyterra Yeast products. Phyterra Yeast products are developed to substantially reduce the formation of ethyl carbamate (also known as urethane) or hydrogen sulfide (H2S), in wines and other widely consumed fermented beverages and foods. Functional Technologies' commercial-stage ethyl carbamate and development-stage H2S reducing technologies provide the company with proprietary solutions for two of the most recognized wine quality problems facing commercial wineries today.
The PEI Business Development grant provides Functional Technologies with up to $125,000 of non-repayable support for its Phyterra Yeast development and commercialization. This grant is in addition to previously announced funding Functional Technologies has received from other government bodies. To date, Functional Technologies has received over $2 million in non-dilutive government cash commitments for the development and commercialization of its proprietary Phyterra Yeast products. This funding will help the company upgrade their Grahams Pond production facility in PEI and help support approximately 10 full time positions in PEI.
"This grant is another step in Functional Technologies' strategy to utilize non-dilutive funding to support the development and commercialization of its proprietary Phyterra Yeast products," commented Functional Technologies' President and COO, Garth Greenham. "We are pleased that our government partners have independently recognized the near-term commercial opportunity of our yeast platforms and provided us with their support and endorsement."
Functional Technologies is also pleased to report the completion of its previously announced acquisition of Maritime Pulse Drying ("MPD"). MPD is a Prince Edward Island based custom spray drying company with new, state-of-the-art, pulse spray drying equipment and highly specialized technical personnel.
The acquisition of MPD complements Functional Technologies' earlier acquisition of the Grahams Pond production and laboratory facility and the technical knowledge developed from work done at the CFIA (Canadian Food Inspection Agency) accredited pilot plant in PEI. The MPD acquisition provides Functional Technologies with full production-scale drying technology capable of drying cream (wet) yeast into bulk dry active product ready for the global commercial winery and home wine markets. Refurbishing work on Grahams Pond has already begun and the MPD equipment installation will begin shortly.
Under the terms of the definitive agreement, Functional Technologies acquired 100% of the outstanding common shares of MPD in consideration for US$10,000 cash and 143,000 common shares of the company which are subject to a four month hold period. These shares have been placed in escrow and will be released as to 50% on April 9, 2009 and as to 50% on October 9, 2009. As part of the acquisition, MPD's equipment loans, which include an ACOA (Atlantic Canada Opportunities Agency) 10 year interest free loan, will remain in place. A small royalty on certain drying revenue, excluding Phyterra Yeast and Bio products, will be paid.
Through its acquisition of MPD, Functional Technologies has also secured an agreement to perform contract drying for a non-competitive company - providing for revenue generation during the low periods between the North and South American crush seasons.
About Functional Technologies Corp.
Functional Technologies is a functional foods and biological health products company that develops and commercializes advanced yeast products, and other novel biological products, for the food and the health care industries. The company is currently commercializing a platform yeast technology that substantially reduces the formation of ethyl carbamate (also known as urethane, which has been recently reclassified by the World Health Organization up to a Group 2A carcinogen - the same carcinogen class as lead, mercury, acrylamide and diesel exhaust), from wines and other widely consumed fermented beverages and foods. As part of its core focus of improving and enhancing the quality of the global food and beverage supply, Functional Technologies has recently expanded its yeast portfolio through the licensing of proprietary hydrogen sulfide (H2S) reducing technology from the University of California at Davis. H2S is one of the most common occurring sensory defects, and a widespread problem, in wine production. In addition Functional Technologies, through its wholly-owned subsidiary Phyterra Bio Inc., is developing a platform of proprietary biological products, for animal health, utilizing proprietary science in the field of micro-algae.
For further company information, please access our website at www.functionaltechcorp.com.
This news release contains forward-looking statements as defined under applicable securities legislation. The forward-looking statements are made as of the date hereof, and the company has no intention to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise except as required by law. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such statements. Such factors include, among others, the company's stage of development, lack of product revenues and no assurance of product acceptance in the market, additional capital requirements, the ability to protect its intellectual property and dependence upon key personnel. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. Additional risks and uncertainties relating to the company and its business can be found in the "Risks and Uncertainties" section of its most recent Management's Discussion & Analysis filed on SEDAR ( www.sedar.com).