Functional Technologies Corp.
TSX VENTURE : FEB

Functional Technologies Corp.

November 09, 2011 09:00 ET

Functional Technologies Enters Evaluation Agreement With Significant European Confectionary Producer, Adding to Other Collaborative Activities

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 9, 2011) - Functional Technologies Corp. (TSX VENTURE:FEB) (the "Company") is pleased to announce it has signed an agreement enabling an undisclosed leading European producer of sweet & savoury baked goods, snacks and confectionaries (the "Collaboration Partner") to evaluate the Company's proprietary acrylamide-preventing (AP) yeast technology in the Collaboration Partner's commercial materials used to produce many of their branded food products.

Regarded as a top-tiered confectionary producer in Europe, the Collaboration Partner is seeking innovative strategies that mitigate acrylamide in numerous products, but with minimal impact on sensory attributes of the end-product. Given previous successful studies, including in end-user provided commercial materials for the production of non-bread products, the application of the Company's AP yeast products are expected to yield valuable, affirmative data. Functional Technologies' AP yeast platform will be evaluated in pre-pilot scale trials that simulate commercial conditions, which should also simultaneously enable preliminary development of production protocols. Results obtained from these studies are expected to facilitate meaningful discussions for the Company's technologies and/or services to subsequently be employed by the Collaboration Partner.

This agreement adds to several other existing collaborative and testing relationships with top-tiered multinational producers of food products that span several sectors in major regions of the world. Various companies operating in both traditional and non-traditional (i.e. non-bread) baker's yeast markets such as baked goods, biscuits, snack foods, pasta-based foods or sweet & savoury foods have already engaged Functional Technologies to test its proprietary AP yeast strains in a variety of products. Several additional companies are in discussions with management to begin the same over the next few months. These companies typically represent thought leaders in their respective sectors, and are dominant in North America, Europe, and/or Asia. Cumulatively, these collaborations speak to Functional Technologies' strategic cultivation of working and potentially commercial relationships with end-users of its proprietary yeasts to drive new market opportunities.

In recognition of the opportunities associated with these efforts, one top-tiered multinational yeast producer has manufactured and provided to Functional Technologies free of charge, 1,500 kg of one of the Company's AP yeast strains for use in evaluation trials, alleviating in part the cost associated with conducting such studies. As at the end of August 2011, Functional Technologies had cash and equivalents of approximately $4.2 million. This does not include $2.5 million in funding from the Government of Canada (announced in March 2011) supporting the development of AP yeast applications in commercial potato processing. Consequently, while the Company believes it is well capitalized to weather the current turbulent capital markets environment, the gratuitous provision of yeast inventory to advance studies confirming the effectiveness of Functional Technologies' AP yeast platforms in commercial applications is useful in extending the Company's runway.

"We are pleased the attractiveness of our proprietary platform solution to prevent and mitigate acrylamide in a variety of foods continues to be validated, as multinational food companies seek to remain competitive in the global marketplace by addressing the health and liability associations with this chemical," said Howard Louie, chairman and CEO of Functional Technologies. "It is a pleasure and privilege for our management and technical teams to work with sector-leading companies, and to continue to establish the efficacy, commercial protocols and thereby commercial appeal of our AP yeasts."

Forward-Looking Information

This news release contains forward-looking information (within the meaning of Canadian securities legislation) about Functional Technologies Inc. and its future plans. Forward-looking information relate to future events or future performance and reflect management's expectations or beliefs regarding future events rather than historical facts, and in this news release include the statements (the "forward-looking statements") regarding: (1) the potential for one or more of the Company's existing or potential licensees/collaborative partnerships to progress, including into commercial relationships formed with global firms in the food sectors; (2) ability for the Company's yeast technologies to reduce acrylamide in novel food applications under commercial conditions (3) the expectation that such relationships will enable the Company to accelerate the commercial progression of the Company's yeast products in global markets. The forward-looking statements in this news release are subject to various risks, uncertainties and other factors that could cause the Company's actual results or achievements to differ materially from those expressed in or implied by forward-looking statements. These risks, uncertainties and other factors include, without limitation, uncertainty as to the Company's ability to achieve the goals and satisfy the assumptions of management; uncertainty as to the demand for the Company's products and the Company's ability to meet such demand; and general economic factors and other factors that may be beyond the control of the Company. Forward-looking statements are based on the opinions and expectations of the Company's management at the time they are made, and the Company does not assume any obligation, beyond what is required under applicable Canadian securities legislation, to update its forward-looking statements if those opinions or expectations, or other circumstances, should change. Reference to the section entitled "Risks and Uncertainties" commencing on page 19 of the Company's management's discussion and analysis relating to the fiscal quarter ended May 31, 2011, which is available on SEDAR at www.sedar.com.

About Functional Technologies Corp.

Functional Technologies develops and commercializes proprietary, advanced yeast-based solutions to significant challenges in the food, beverage and healthcare industries. The Company's platform improves the performance of innate yeast functions, and prevents the formation of naturally occurring toxins and contaminants that either affect final product quality or are classified by the World Health Organization as probable human carcinogens. Functional Technologies' lead technologies include yeasts that prevent and reduce the formation of the foul-smelling hydrogen sulphide (H2S) and the carcinogens acrylamide and ethyl carbamate (more commonly known as urethane), by-products of food and beverage processing. These contaminants are found in many commonly consumed items, such as fermented food products and alcoholic beverages, and baked and fried foods. With a head office in Vancouver, Functional Technologies Corp. has R&D operations in Prince Edward Island and Europe, as well as a U.S. sales office in Napa Valley, California. For more information, please visit our website at 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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