Functional Technologies Announces Letter of Commitment from Leading Global Yeast Producer

Successful confirmation of the performance of Acryleast yeasts in food applications under industrial processing conditions is an important milestone to drive the adoption of the Company's yeasts by various industries.

21 Sep 2012 --- Functional Technologies Corp. has announced that a global, industry leader in yeast production and yeast technology has signed a letter confirming its commitment to supply Functional Technologies with preliminary volumes of the Company's proprietary Acryleast yeasts, a platform solution that prevents and reduces the formation of acrylamide. This supply arrangement enables major food processing companies and collaborators, including in the baking, snack food, cereals and potato processing sectors, to evaluate and confirm the feasibility and effectiveness of the Acryleast platform in various commercial processes. Successful confirmation of the performance of Acryleast yeasts in food applications under industrial processing conditions is an important milestone to drive the adoption of the Company's yeasts by various industries.

The letter also describes the manner of collaboration enabling the two companies to evaluate the production and optimization of Acryleast yeasts, how this may be best facilitated by the Yeast Producer, as well as continued assessments of the industrial scale feasibility of Functional Technologies' existing and potential subsequent yeast strains and products for the prevention and reduction of acrylamide in specific food categories. Particulars including which 3rd party production and Yeast Producer-specific manufacturing facilities will be engaged for the production of the AcryleastTM yeasts are also provided in the letter. This is expected to provide end-user collaborators with some level of assurance that the quality of the Company's AP yeast, even at pilot scale volumes, is of commercial and high grade.

Collectively, this confirmed commitment provides for the potential for longer term arrangement and agreements, including the large scale production and supply of AcryleastTM yeasts for food processing end-users and customers across a variety of food market segments.

"We are pleased to continue to expand our working and strategic relationship with a respected, global leader in innovation and quality, as well as size, to further the commercial potential and distribution of our AP yeast platform," said Mr. Howard Louie, Chief Business Development Officer of Functional Technologies. "With this initial letter of commitment, we look forward to continuing to grow our relationship and working together to enhance the opportunities associated with our proprietary yeast technologies to the benefit of both parties."

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 ("WHO") as probable human carcinogens. Functional Technologies' lead technologies include yeasts that prevent and reduce the formation of foul-smelling hydrogen sulphide (H2S) and the WHO classified probable carcinogen, acrylamide - both 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.