Functional Technologies Corp.
TSX VENTURE : FEB

Functional Technologies Corp.

July 30, 2012 18:34 ET

Functional Technologies Reports Third Quarter 2012 Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 30, 2012) - Functional Technologies Corp. (TSX VENTURE:FEB) (the "Company") today reported operational and financial results for the third quarter ended May 31, 2012 ("Q3/12"). Amounts, unless specified otherwise, are expressed in Canadian dollars. The Company's Q3/12 consolidated financial statements have been prepared in accordance with International Financial Reporting Standards.

"Functional Technologies Corp. has continued to make progress in driving the evaluation and adoption of its core, proprietary technologies of acrylamide-preventing (AP) and hydrogen sulphide (H2S)-preventing yeast platforms," said Mr. Christopher Morris, Functional Technologies' interim Chief Executive Officer. "This includes evaluation trials of AP yeasts in new food applications, creating opportunities in addition to those from snack and bread-related food sectors, reflecting growing interest and validation from both major and intermediary food producers globally. The Company also continues to execute on initiatives to attain and focus its capital resources on these core assets, reducing large capital costs, operational burn and dilution of management bandwidth associated with non-core programs. Collectively, these strategies are expected to position the Company to achieve significant commercial objectives in the coming quarters while improving its balance sheet and reducing operating overhead."

Operating Highlights

During and subsequent to the end of Q3/12, the Company:

  • Announced the signing of a definitive agreement, subject to certain conditions, finalizing the previously announced spin-out of non-core assets in Prince Edward Island;
  • Announced debt and equity financings;
  • Reported it has received a patent grant as well as a notice of patent issuance for its H2S-preventing wine yeast technology in New Zealand and the U.S., respectively;
  • Appointed Mr. Carlos Barroso, a seasoned international food industry executive, to its Advisory Board;
  • Began trading on the OTCQX market in the U.S. under the ticker symbol "FEBTF";
  • Launched new strains of H2S-preventing wine yeasts, enhancing and complementing its existing product portfolio; and
  • Announced new testing and development agreements for its AP yeasts, presenting new opportunities in additional food segments and sectors. Also reported new inquiries to develop collaborative relationships for the evaluation of the AP yeasts from 10 new food producers and suppliers that approached senior Company representatives at a large and prominent global snack food conference.

Financial Results

The Company incurred a net loss of $1.4 million during Q3/12, compared to $1.1 million for the three months ended May 31, 2011 ("Q3/11"). Operating expenses, excluding stock-based compensation expenses, for Q3/12 were $1.1 million, compared to $1.0 million in Q3/11.

Liquidity and Outstanding Share Capital

As at May 31, 2012, the Company had cash and short-term investments of $0.7 million compared to $4.2 million as at August 31, 2011. As at May 31, 2012, the Company had working capital of $0.3 million compared to $3.9 million as at August 31, 2011.

As at July 27, 2012, Functional Technologies Corp. had 49,396,895 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 May 31, 2012 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.

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 statement (the "forward-looking statement") that the Company's business strategies are expected to position the Company to achieve significant commercial objectives in the coming quarters while improving its balance sheet and reducing operating overhead. This forward-looking statement is 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 the forward-looking statement including, without limitation, uncertainty as to the Company's ability to achieve the goals and satisfy the assumptions of management; uncertainty as to the Company's ability to raise sufficient funds to maintain operations; 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 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 17 of the Company's management's discussion and analysis relating to the fiscal quarter ended May 31, 2012, 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. For more information, please visit our website at www.functionaltechcorp.com.

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