Functional Technologies Corp.

Functional Technologies Corp.

January 29, 2010 09:00 ET

Functional Technologies Reports Fiscal Q1 2010 Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 29, 2010) - Functional Technologies Corp., (TSX VENTURE:FEB) (the "Company") reported financial results for the quarter ended November 30, 2009 and provides an update on its highlights for fiscal Q1 2010. 

Quarterly Highlights include:

  • Announced plans to install a commercial-scale yeast production facility in Summerville, Prince Edward Island (PEI), enabled by federal and provincial government funding – with financial benefits from all sources of government total $5.1 million. The fermentation plant, which 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, will be used for process scale-up and commercial production of the Company's proprietary enhanced yeast. The Company has entered into a long-term lease agreement with Active Communities Development Inc., a Community Business Development Corporation in eastern PEI. Phyterra Yeast Inc., its sister company Phyterra Bio Inc. and Functional Technologies Corp. entered into a complementary set of loan and security agreements with PEI Business Development Inc. and Atlantic Canada Opportunities Agency relating to fermentation equipment totaling $2,960,000;
  • Commenced trials for numerous California wineries, including three out of the ten largest wine companies in the United States (by volume), for recently launched hydrogen sulfide (H2S)-reducing yeast strains. The Company also reported it has received product requests from over sixty-five (65) wineries, which collectively represent hundreds of wine brands;
  • Entered into an agreement with Innovation PEI entitling the Company to recover a labour rebate of up to $299,250 relating to $570,000 of eligible salaries in the design and development of the planned commercial-scale yeast production facility in Summerville, PEI and yeast products. 

As reported earlier, the Company, in addition to its ongoing efforts to commercialize its H2S-reducing yeast strains and the installation of production capability in PEI, is looking forward to completing the following milestones during calendar H1 2010:

  • Complete commercial "conviction" trials for H2S-reducing yeast with large US wineries, a key step prior to widespread adoption; 
  • Receive kosher approval for PEI laboratory facilities and hence future commercial yeast strains; ensuring the highest quality yeast for customers and partners, enabling the Company to meet production criteria for several contract manufacturers;
  • Complete development of two new ethyl carbamate-reducing yeast strains for the rice wine / sake market; 
  • Apply for and receive US Food and Drug Administration GRAS (Generally Recognized As Safe) designation for yeast strains related to H2S-reducing technology;
  • Launch additional new H2S-reducing wine yeast strains to complement the three already available. 

Fiscal 2010 Q1 Results

Amounts, unless specified otherwise, are expressed in Canadian dollars. The Company's consolidated financial statements for the quarter ended November 30, 2009, from which the financial information in this news release was extracted, were prepared in accordance with Canadian Generally Accepted Accounting Principles (Canadian GAAP). 

The Company incurred a net loss of $908,912 for the quarter ended November 30, 2009 compared to a net loss of $772,225 for the quarter ended November 30, 2008, an increase of $136,687. The increase in the net loss was the result of an increase in operating expenses and a decrease in government assistance. The increase in operating expenses was primarily in the following areas: amortization of intangible assets, office and general expenses, and salaries and wages; which were offset by deceases in professional fees and research and development. In the coming quarters the Company expects a reduction in net losses due to reduced administration expense as well as initial wine yeast and contract drying revenues. 

Government assistance for the quarter ended November 30, 2009 amounted to $172,456 compared to $212,445 for the year ending November 30, 2008, a decrease of $39,989.

Amortization of intangible assets for the quarter ended November 30, 2009 was $40,594 compared to $0 for the quarter ended November 30, 2008, and primarily relates to the acquisition of Phycobiologics Inc. (now known as Phyterra Bio Inc.).

Stock based compensation for the quarter ended November 30, 2009 was $154,972 compared to $97,079, for the quarter ended November 30, 2008, an increase of $57,893. The increase is principally attributable to the fair value of options granted during the quarter ended November 30, 2009, which were allocated to the statement of operations. 

Liquidity and Outstanding Share Capital

As at November 30, 2009, the Company had cash and short-term investments of $1,007,672 compared to $2,045,659 as at August 31, 2009 and working capital of $1,225,473 compared to $2,204,642 as at August 31, 2009. As at January 21, 2010, Functional Technologies had 33,246,584 common shares issued and outstanding. 

Additional Information

This news release should be read in conjunction with the Company's consolidated financial statements for the quarter ended November 30, 2009 and the notes thereto, together with the MD&A for the corresponding period, which are available on the Company's website at and on SEDAR at 

FORWARD-LOOKING STATEMENTS: This news release contains forward-looking statements about the Company and its future plans. Forward-looking statements are statements that are not historical facts, and in this news release include the statements regarding the commercial-scale yeast production facility in Summerville, PEI the Company plans to install, the statement regarding the labour rebate the Company is entitled to recover pursuant to the agreement with Innovation PEI, and the statements as to certain milestones that the Company looks forward to completing in the first half of calendar 2010. 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; uncertainties as to whether the Company will satisfy the criteria required to be met in order to access the government funding secured by the Company; uncertainties as to the availability and cost of financing; 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 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 if those beliefs, opinions or expectations, or other circumstances, should change. Reference to the section entitled "Risks and Uncertainties" commencing on page 13 of the Company's management's discussion and analysis relating to the fiscal quarter ended November 30, 2009, which is available on SEDAR at

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


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