Forbes Medi-Tech Announces $3.8 Million Non-Dilutive Funding Transaction
March 20 2008 - 8:00AM
Marketwired
VANCOUVER, BRITISH COLUMBIA (NASDAQ: FMTI)(NASDAQ: FMTID)
("Forbes" or the "Company") today announced that, as part of its
continuing reorganization plan, it has entered into an agreement
with a private investor (the "Investor") to reorganize Forbes
Medi-Tech Operations Inc. ("FMTO"), a wholly-owned subsidiary of
Forbes. The Investor is to make an investment of $3 million in a
convertible debenture of FMTO. All of the assets, liabilities and
operations of FMTO, including the proceeds from the issue of the
convertible debenture, are to be transferred to Forbes, which will
continue to carry on the business previously carried on by FMTO.
The debenture is convertible into 35% of the voting common shares
and all of the non-voting common shares of FMTO, representing 79%
of the issued and outstanding common shares of FMTO at the time of
completion of the transaction. The transaction is expected to close
on or before April 30, 2008. Completion of the transaction is
subject to the satisfaction of certain conditions. Following
completion of the transaction, Forbes and the Investor will source
and pursue other opportunities to maximize the value of their
respective interests in FMTO. Subject to certain conditions, the
Investor has agreed that Forbes will receive a minimum of $800,000
from these other opportunities within one year of completion of the
transaction.
The transaction will not result in any change to the share
ownership of Forbes, its listing on the NASDAQ or TSX, the
composition of its Board of Directors, management or in any of its
relationships and commitments to shareholders, employees,
government and industry partners, customers, and suppliers. From an
operational perspective, there will be no changes, Forbes will
acquire from FMTO, and retain, all rights to its intellectual
property and will continue to develop and market a portfolio of
products for the benefit of all consumers, including the further
commercialization of Reducol(TM), and to continue its
pharmaceutical programs under its current business plan.
"We believe this transaction clearly unlocks value for our
shareholders," stated Charles Butt, President and CEO of Forbes
Medi-Tech. "We will immediately access $3 million of non-dilutive
capital for our business development and operational plans,
followed by an additional $800,000 within a year, plus a possible
upside on the latter amount. We look forward to working with the
Investor to fully develop this opportunity."
Based on our outstanding common shares of 4,801,512, this
transaction will add shareholder value of approximately $0.79 per
common share.
About Forbes Medi-Tech Inc.
Forbes Medi-Tech Inc. is a life sciences company dedicated to
the research, development and commercialization of innovative
products for the prevention and treatment of life-threatening
disease. Our strategy and vision is to develop and market a
portfolio of products for the benefit of all consumers, from the
healthy person desiring consumer lifestyle products that can help
reduce the risk of future disease, to medical patients needing
therapeutic prescription products for the treatment of an
established ailment. Additional information on Forbes Medi-Tech can
be found at www.forbesmedi.com.
This News Release contains forward-looking statements and
information regarding Forbes' continuing reorganization plan and
non-dilutive financing, and Forbes' strategy and vision, which
statements can be identified by the use of forward-looking
terminology such as "will", "expected", "expects", "possible",
"strategy" and "vision". The Company's actual results could differ
materially from those anticipated in these forward-looking
statements and information as a result of numerous factors,
including uncertainty whether the continued reorganization plan and
financing will be undertaken or completed as planned or at all; the
satisfactions of the conditions contained in the agreement with the
Investor including those that are to be satisfied in the discretion
of the Investor, the need for performance by the Investor, which is
not assured; the possibility that the reorganization will result in
different outcomes than those currently anticipated; uncertainty
whether the Company will receive all of the anticipated proceeds of
the financing, including the $800,000 within a year; the Company's
need for further funding, which is not assured; changes in business
strategy or development plans; uncertainty whether the Company will
realize its strategies and vision; and other risks and
uncertainties, as contained in news releases and filings with
Securities Regulatory Authorities in Canada and the U.S. at
www.sedar.com and at www.sec.gov, any of which could cause actual
results to vary materially from current results or the Company's
anticipated future results. Forward-looking statements and
information are based on the assumptions, beliefs, opinions and
expectations of the Company's management at the time they are made,
and, except as required under applicable law, the Company does not
assume any obligation to update any statement should those
assumptions, beliefs, opinions or expectations, or other
circumstances change.
NASDAQ and the Toronto Stock Exchange have not reviewed and do
not accept responsibility for the adequacy or accuracy of the
content of this News Release.
Contacts: Forbes Medi-Tech Inc. Investor Relations (604)
681-8976 Email: ir@forbesmedi.com Forbes Medi-Tech Inc. David Goold
Chief Financial Officer (604) 689-5899 Email: dgoold@forbesmedi.com
Website: www.forbesmedi.com
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