Forbes Medi-Tech Inc.
OTC Bulletin Board : FMTI

March 20, 2008 08:00 ET

Forbes Medi-Tech Announces $3.8 Million Non-Dilutive Funding Transaction

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 20, 2008) - Forbes Medi-Tech Inc. (TSX:FMI)(NASDAQ:FMTI)(NASDAQ:FMTID) ("Forbes" or the "Company") today announced that, as part of its continuing reorganization plan, it has entered into an agreement with a private investor (the "Investor") to reorganize Forbes Medi-Tech Operations Inc. ("FMTO"), a wholly-owned subsidiary of Forbes. The Investor is to make an investment of $3 million in a convertible debenture of FMTO. All of the assets, liabilities and operations of FMTO, including the proceeds from the issue of the convertible debenture, are to be transferred to Forbes, which will continue to carry on the business previously carried on by FMTO. The debenture is convertible into 35% of the voting common shares and all of the non-voting common shares of FMTO, representing 79% of the issued and outstanding common shares of FMTO at the time of completion of the transaction. The transaction is expected to close on or before April 30, 2008. Completion of the transaction is subject to the satisfaction of certain conditions. Following completion of the transaction, Forbes and the Investor will source and pursue other opportunities to maximize the value of their respective interests in FMTO. Subject to certain conditions, the Investor has agreed that Forbes will receive a minimum of $800,000 from these other opportunities within one year of completion of the transaction.

The transaction will not result in any change to the share ownership of Forbes, its listing on the NASDAQ or TSX, the composition of its Board of Directors, management or in any of its relationships and commitments to shareholders, employees, government and industry partners, customers, and suppliers. From an operational perspective, there will be no changes, Forbes will acquire from FMTO, and retain, all rights to its intellectual property and will continue to develop and market a portfolio of products for the benefit of all consumers, including the further commercialization of Reducol™, and to continue its pharmaceutical programs under its current business plan.

"We believe this transaction clearly unlocks value for our shareholders," stated Charles Butt, President and CEO of Forbes Medi-Tech. "We will immediately access $3 million of non-dilutive capital for our business development and operational plans, followed by an additional $800,000 within a year, plus a possible upside on the latter amount. We look forward to working with the Investor to fully develop this opportunity."

Based on our outstanding common shares of 4,801,512, this transaction will add shareholder value of approximately $0.79 per common share.

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' continuing reorganization plan and non-dilutive financing, and Forbes' strategy and vision, which statements can be identified by the use of forward-looking terminology such as "will", "expected", "expects", "possible", "strategy" and "vision". The Company's actual results could differ materially from those anticipated in these forward-looking statements and information as a result of numerous factors, including uncertainty whether the continued reorganization plan and financing will be undertaken or completed as planned or at all; the satisfactions of the conditions contained in the agreement with the Investor including those that are to be satisfied in the discretion of the Investor, the need for performance by the Investor, which is not assured; the possibility that the reorganization will result in different outcomes than those currently anticipated; uncertainty whether the Company will receive all of the anticipated proceeds of the financing, including the $800,000 within a year; the Company's need for further funding, which is not assured; changes in business strategy or development plans; uncertainty whether the Company will realize its strategies and vision; and other risks and uncertainties, as contained in news releases and filings with Securities Regulatory Authorities in Canada and the U.S. at www.sedar.com and at www.sec.gov, 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, except as required under applicable law, the Company does not assume any obligation to update any statement should those assumptions, beliefs, opinions or expectations, or other circumstances 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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