Functional Technologies Corp.
TSX VENTURE : FEB

Functional Technologies Corp.

November 30, 2009 06:00 ET

RETRANSMISSION-Functional Technologies Corp.: Government Funding Secured for Commercial Scale Yeast Production

SUMMERVILLE, PRINCE EDWARD ISLAND and VANCOUVER, BRITISH COLUMBIA--(Marketwire – Nov. 30, 2009) – Phyterra™ Yeast Inc., a unit of Functional Technologies Corp. (TSX VENTURE:FEB), today announced it is installing a commercial-scale yeast production facility in Summerville, Prince Edward Island (PEI), enabled by federal and provincial government funding. In addition, the company is entering into a long-term lease agreement with Active Communities Development Inc., a Community Business Development Corporation in eastern PEI. Financial benefits from all sources of government total $5.1 million, representing a contribution of $1.6 million and loans of $3.5 million.

The Honourable Keith Ashfield, Minister of State (Atlantic Canada Opportunities Agency), the Honourable Allan Campbell, PEI Minister of Innovation and Advanced Learning, and Mr. Garth Greenham, President and Chief Operating Officer of Functional Technologies Corp., gathered today in Summerville to announce funding details.

"This substantial non-dilutive funding enables us to deliver a wider variety of our yeast products to market on a timely basis," said Mr. Greenham. "This will become a world-class facility for the emerging high-margin proprietary yeast market. As well, a location close to our research team in Charlottetown provides an excellent test-bed for new products and technologies," he added.

"The Government of Canada is committed to partnering in initiatives that continue to fuel the growth of an innovative economy on Prince Edward Island," said Minister Ashfield. "This investment will provide the tools necessary for Phyterra Yeast to expand their success from here in Atlantic Canada."

"Bioscience is a rapidly growing economic sector in Prince Edward Island that is providing sustainable jobs for Islanders," said Hon. Allan Campbell, PEI's Minister of Innovation and Advanced Learning. "The development of a new production facility in Summerville, near Montague will create 20 new long-term jobs in rural PEI and will help a company develop new products that will be widely used in the global food and beverage industry."

In aggregate, these approved projects provide the land, building improvements, equipment and start-up capital for a turnkey fermentation plant which will be used for process scale-up and commercial production of the company's proprietary enhanced yeastPhyterra's recently launched hydrogen sulphide-reducing wine yeast strains are currently undergoing trials with numerous California wineries, including three of the ten largest wine companies in the U.S. (by volume).

The plant, which the company has the option to purchase through its lease agreement, is expected to have initial annual production capacity of 50,000 kg of active dry yeast and be compliant with both US and Canadian GMP (Good Manufacturing Practices) standards. Capacity can be expanded easily and cost-effectively to accommodate up to 150,000 kg of active dry yeast annually.

With respect to the funding, Phyterra Yeast Inc., its sister company Phyterra Bio Inc. and Functional Technologies Corp. have entered into a complementary set of loan and security agreements with PEI Business Development Inc. and Atlantic Canada Opportunities Agency relating to fermentation equipment and start-up costs, totaling $2,960,000.

About Functional Technologies Corp.
Functional Technologies develops and commercializes proprietary technologies that enhance the natural properties of yeast and algae - nature's microscopic workhorses. Our scientists apply novel techniques to these micro-celled organisms to resolve significant safety and quality problems, and generate new opportunities in the global food, beverage and healthcare industries. Our first commercial products are our Phyterra™ line of proprietary yeast strains, designed to reduce the formation of foul-smelling hydrogen sulphide and the carcinogen urethane in wines and other fermented products. Our first target market is the US$1.5 billion wine and distilled spirits yeast markets. With a head office in Vancouver, Functional Technologies has research and development facilities in Prince Edward Island and a U.S. sales office in Napa Valley, California. For more information go to www.functionaltechcorp.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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