VANCOUVER, BRITISH COLUMBIA--(Marketwired - April 25, 2013) - Functional Technologies Corp. (TSX VENTURE:FEB) (the "Company") today reported operational and financial results for the second quarter ended February 28, 2013. Amounts, unless specified otherwise, are expressed in Canadian dollars.
The Company achieved a net gain of $0.0177 million during the three month period ending February 28, 2013 ("Q2, 2013"), as compared to a net loss of $4.6 million in the same period in 2012 ("Q2, 2012"), representing an improvement of $4.630 million. This positive change is primarily a result of an asset impairment charge of $3.393 million in the prior period but also reflects a decrease in operating expense of $0.446 million in Q2, 2013 relative to Q2, 2012, as well as a $0.198 million gain from asset sales and $0.689 million gain from forgiveness of debt during Q2, 2013.
Operating expenses, excluding stock-based compensation expenses, for Q2, 2013 were $0.78 million, compared to $1.1 million in Q2, 2012.
Liquidity and Outstanding Share Capital
As at February 28, 2013, the Company had cash and short-term investments of $0.5 million compared to $0.38 million as at August 31, 2012.
As at February 28, 2013, Functional Technologies had 61,370,444 common shares issued and outstanding.
The second quarter of fiscal 2013 was primarily a quarter of reorganization to position the Company to move forward with its revised business plan, first announced April 4, 2012, which involved the sale and closure of non-yeast technology assets and subsidiaries. This restructuring, designed to place the Company in a position to minimize operating expenses while simultaneously accelerating commercialization of its proprietary yeast technologies, made significant advances during the quarter.
During Q2, 2013, the Company announced:
- November 1, 2012 - The termination of the proposed sale of assets to former employees;
- December 7, 2012 - Senior Management Changes;
- February 4, 2013 - The hiring of in-House Investor Relations.
During Q2, 2013 operational highlights included significant advances in the commercialization of the Company's Acrylamide Preventing ("AP") yeast. During this quarter commercial-grade AP yeast was independently manufactured by a global yeast manufacturer and third-party tested in commercial snack food products at a pilot scale level by a global food manufacturer. This pilot scale testing produced positive results that warrant further testing at a commercial scale.
Subsequent to quarter-end:
- As at April 15, 2013 Finance PEI (formerly known as Innovation PEI), a secured creditor, enforced its security on the property of the Company's subsidiary, Phyterra Bio Inc. and placed Phyterra Bio Inc. into receivership. The total amount of indebtedness secured is $260,789.
- On April 25, 2013, the Company filed a notice of intent to submit a proposal to creditors under the Bankruptcy and Insolvency Act. Reference should be made to the Company's news release of April 25, 2013 for further information.
The Company's Q2/13 consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), reporting standards to which the Company transitioned from Canadian Generally Accepted Accounting Principles during the fiscal year ended August 31, 2012.
This news release should be read in conjunction with the Company's consolidated financial statements for the quarter ended February 28, 2013 and the notes thereto, together with the MD&A for the corresponding period, which are available on the Company's website www.functionaltechcorp.com and 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 carcinogen acrylamide, both of which are natural occurring 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.
The head office and R&D operations for Functional Technologies are based in Vancouver, BC, Canada.
For more information, please visit our website at www.functionaltechcorp.com.
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