Forbes Medi-Tech Inc.
OTC Bulletin Board : FMTI

December 20, 2007 08:01 ET

Forbes Medi-Tech Announces Plan of Arrangement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 20, 2007) - Forbes Medi-Tech Inc. (TSX:FMI)(NASDAQ:FMTI) today announced its Board of Directors have approved the submission of a corporate reorganization to its shareholders for approval. The corporate reorganization, if approved, will result in shareholders exchanging their existing shares in Forbes, a Canadian federal corporation, for shares in a new company (Newco) incorporated in the Province of British Columbia (B.C.). This exchange will result in Forbes becoming a wholly-owned subsidiary of Newco. As a B.C. company, Newco will be afforded the ability to undertake a new set of financing alternatives and offer a broader range of financial instruments.

"This transaction has long-term shareholder value in mind and will enhance the Company's ability to finance operations through non-dilutive and alternative forms of financing," said Charles Butt, President & CEO of Forbes Medi-Tech Inc.

The Company will be calling a special meeting, currently scheduled to be held in mid February 2008, to consider and, if thought fit, approve the reorganization. The Company expects to mail a notice of meeting and information circular in mid January.

To allow investment by certain institutional investors whose policies preclude investing in stocks under US$1 and regain compliance with Nasdaq's minimum US$1 bid requirement, the share exchange ratio will be not less than two shares of Forbes for each one share of Newco and not more than four shares of Forbes for each one share of Newco. The Board of Directors will determine the exact ratio before the reorganization is effective. The shares of Newco are expected to be listed on both Nasdaq and the TSX in substitution for shares of Forbes under the same trading symbols. Forbes shareholders are to retain their existing equity interest in Forbes. Current holders of options and warrants of Forbes are also to exchange their existing options and warrants, at the same ratio as the share exchange, for options and warrants in Newco.

"With access to a broader institutional investor pool, we are focused on building long-term shareholder value with the additional activity in our Nutritional business and advancing our Pharmaceutical development program," said Butt.

The reorganization is to be carried out as a plan of arrangement under the Canada Business Corporations Act, and is subject to shareholder and regulatory approval as well as approval by the Supreme Court of British Columbia. Subject to these conditions, the Board has unanimously recommended that shareholders approve the reorganization. Completion of the transaction, pending the outcome of a shareholder vote, and court and regulatory approvals, is expected to occur in the first quarter of 2008.

About Forbes Medi-Tech Inc.

Forbes Medi-Tech Inc. is a life sciences company dedicated to the research, development and commercialization of innovative products for the prevention and treatment of life-threatening disease. Our strategy and vision is to develop and market a portfolio of products for the benefit of all consumers, from the healthy person desiring consumer lifestyle products that can help reduce the risk of future disease, to medical patients needing therapeutic prescription products for the treatment of an established ailment. Additional information on Forbes Medi-Tech can be found at www.forbesmedi.com.

This News Release contains forward-looking statements and information regarding Forbes proposed Plan of Arrangement and reorganization, listing of Newco shares on TSX and Nasdaq, share price, ability to obtain new financing and access to a broader investor pool, Forbes' strategy and vision, and other information related to future periods. Forward-looking statements and information can be identified by the use of forward-looking terminology such as "will", "scheduled", "expects", "are to", "is to be", "building", "strategy", "vision", or comparable terminology referring to future events or results. Forward-looking statements and information are statements and information about the future and are inherently uncertain. The Company's actual achievements and other results and occurrences could differ materially from those anticipated in these forward-looking statements and information due to a variety of risks, uncertainties and other factors, including, without limitation, uncertainty whether the plan of arrangement will be submitted to shareholders as proposed or at all, or if approved, will be implemented; uncertainty whether all necessary approvals to the plan of arrangement, including regulatory and shareholder approval, will be obtained; uncertainty as to timing of the shareholders meeting and mailing of materials; uncertainty whether the Nasdaq minimum bid price will be achieved and whether the Company's or Newco's shares will remain, or will be, listed on the TSX and/or Nasdaq; the need for additional funding, which may not be available in a timely manner or at all, notwithstanding Newco's ability to offer new financing alternatives; the risk of unanticipated costs or expenses; uncertainty whether the Company will realize is strategies and vision; the need for additional research and development, the outcome of which is uncertain; changes in business strategy or development plans; as well as a description of other risks and uncertainties affecting the Company and its business, as contained in news releases and filings with the United States Securities and Exchange Commission and Canadian Securities Regulatory Authorities, any of which could cause actual results to vary materially from current results or the Company's anticipated future results. Forward-looking statements and information are based on the assumptions, beliefs, opinions and expectations of the Company's management at the time they are made, and the Company does not assume any obligation to update its forward-looking statements or information if those assumptions, beliefs, opinions or expectations or other circumstances should change.

NASDAQ and the Toronto Stock Exchange have not reviewed and do not accept responsibility for the adequacy or accuracy of the content of this News Release.

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