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Dr Linda Bisson Develops Yeast Strain to Minimize Hydrogen Sulfide Production

Functional Technologies Corp. (TSX VENTURE:FEB) is pleased to announce the exclusive licensing of proprietary hydrogen sulfide (H2S) reducing yeast technology from the University of California at Davis (UC Davis). H2S is a colorless volatile gas which produces a distinctive unpleasant noxious odor in wine, beer, and other fermented beverages. H2S is one of the most common occurring sensory defects, and a widespread problem, in wine production.

The nose is very sensitive to H2S, consequently small quantities of this volatile gas can easily be detected. Unless H2S is removed from wine promptly, it can react with other wine materials and form other off-odors and off-flavors which can be difficult and costly to remove. The need for new products to control H2S is widely recognized by industry producers, suppliers, as well as industry advocates and consumers. Although the industry has utilized different methods to attempt to remediate this sensory defect, it has typically resulted in suppliers and producers making trade-offs which may tend to have other ramifications and repercussions. Global yeast producers continue to recognize this problem by introducing new products specifically designed to deal with the H2S problem with varying degrees of success. The current consensus continues to be that a consistent, reliable product without the trade-offs associated with existing H2S reducing techniques that is readily available to the market is desirable to improve and simplify wine production in the future.

"What we have developed at UC Davis is a yeast technology that consistently minimizes H2S and has the flexibility to be applied across common yeast strains using classic natural breeding techniques," commented Dr. Linda Bisson, Professor at UC Davis' Viticulture and Enology Department. "This technology is unique in that it is a "preventative" solution that can be used proactively by commercial wineries to minimize H2S occurrence, as opposed to current options which are all reactionary and are used only once the H2S problem has occurred. H2S is a global problem within the fermented beverage industry, so from a commercial standpoint, yeast technology that prevents this sensory defect should be highly desirable. This trait can be crossed into any commercial strain, thereby preserving the other desirable characteristics of that strain."

The addition of the H2S reducing technology complements Functional Technologies' existing ethyl carbamate (urethane) reducing yeast platform, and provides the company with leading solutions for two of the most recognized wine quality problems facing commercial wineries today.

"We are thrilled to expand the Phyterra Yeast portfolio through this transaction. The H2S reducing technology can be applied to a variety of fermented beverages and is highly complementary to our ethyl carbamate reducing product line. Initially this will enable us to offer our commercial winery customers two proprietary technologies, one to improve the safety and one the sensory characteristics of their products," commented Garth Greenham, President and COO of Functional Technologies.

"The UC Davis license also demonstrates Functional Technologies' commitment to collaboration and innovation, and to ensuring that we remain at the forefront of the development and commercialization of proprietary yeast technology to improve the quality of fermented foods and beverages," added Mr. Greenham. "Dr. Bisson is a recognized world leader in the field of wine, wine yeast and microbiology and the science editor of the American Journal of Enology and Viticulture. Dr. Bisson's H2S yeast program has received broad support and funding from the commercial wine industry and from key organizations such as the American Vineyard Foundation and the California Competitive Grant Program for Research in Viticulture and Enology. We are pleased to have the opportunity to work with Dr. Bisson to bring this proprietary H2S yeast technology to the commercial wine industry."

Under the license, the company holds the exclusive rights to commercially utilize the technology for the life of the last patent relating to the technology issued in the United States of America and its territories and possessions, and any foreign countries where patent rights exist. The license is not subject to any restrictions affecting commercial utilization.

About Functional Technologies Corp.

Functional Technologies is a functional foods and biological health products company that develops and commercializes advanced yeast products, and other novel biological products, for the food and the health care industries. The company is currently commercializing a platform yeast technology that substantially reduces the formation of ethyl carbamate (also known as urethane, which has been recently reclassified by the World Health Organization up to a Group 2A carcinogen - the same carcinogen class as lead, PCB's, acrylamide and diesel exhaust), from wines and other fermented beverages and foods. Functional Technologies has licensed the exclusive worldwide rights to this technology from The University of British Columbia (UBC). The company is expanding the development of next generation products in this area, as well as evaluating new yeast based technologies with broad commercial market applications. In addition Functional Technologies, through its wholly-owned subsidiary Phyterra Bio Inc., is developing a platform of proprietary biological products, for animal health, utilizing proprietary science in the field of micro-algae.

This news release contains forward-looking statements as defined under applicable securities legislation. The forward-looking statements are made as of the date hereof, and the company has no intention to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise except as required by law. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such statements. Such factors include, among others, the company's stage of development, lack of product revenues and no assurance of product acceptance in the market, additional capital requirements, the ability to protect its intellectual property and dependence upon key personnel. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. Additional risks and uncertainties relating to the company and its business can be found in the "Risks and Uncertainties" section of its most recent Management's Discussion & Analysis filed on SEDAR (www.sedar.com).

SOURCE: Functional Technologies Corp.