World-regarded Research Facility:

A collaborative research agreement with UBC and its Wine Research Centre provides the Company with access to one of the most advanced and best equipped wine research facilities in the world.

Economically Viable Product Manufacturing Solution:

The Company can offer what is currently the most economically-viable solution to virtually eliminate, or in the very least substantially reduce, current Ethyl Carbamate levels in wine and fortified spirits. Use of the new yeast strain requires no costly retooling or processing changes in the manufacturing and production. The total cost per bottle of wine is estimated at 1.5 cents per bottle, an extremely insignificant amount to the end user.

Patent Pending Technology:

An international PCT patent application on this urea-degrading yeast technology has been filed. In addition, national jurisdictional patent filings have now been made in 16 countries, including those in Europe.

End-Product Integrity Unchanged

The removal of Ethyl Carbamate from wine has been found thus far in commercial trials not to have any flavour, smell or colour implications on the final product. Further testing will be conducted with all the new yeasts produced to support this conclusion.

Huge Global Market for Wine / Distilled Spirits' Yeast:

The global market for wine, brandy and sake yeasts is estimated to be in excess of 12 thousand metric tonnes of yeast (estimated to produce 30 billion litres of wine, brandy and sake). Current prices, depending on the specific strain of yeast, are in the range of $20US - $140 (US) per kilogram. The pricing strategy for Functional Technologies' wine yeast strains targets the high end of this price scale.

A Platform Technology for Additional Fermented Food and Beverage Markets:

Ethyl Carbamate is of concern in other fermented food and beverage products such as distilled spirits, bread and yeast baked goods, beer and rice wines (sake). The Company has secured the right to license the new yeast strain as a "platform" technology into these markets.

Short Time Horizon for a Biotech Investment:

Functional Technologies' yeast technology has been under development for five years. Its first two products are now entering the final stages of commercial development and these strains are now ready for commercial sale with other strains in varying degrees of development.

Regulatory requirements for yeasts are minimal as they are designated by the US FDA as "generally recognized as safe" (GRAS) substances. There are no clinical trials required prior to commercialization.

Functional Technologies' Business Strategy

The Company 's business strategy is to make commercially available its improved proprietary yeast products wherever the EC problem exists in fermentation production. As well as to provide or facilitate improved and inexpensive testing guildlines protocols and sample analysis to provide better, easier, and accurate EC levels testing based on both for actual and potential values.

Comparatively Minimal Capital Investment for a Life Sciences / Biotech Project:

Due to many of the key success factors listed above, the Company does not expect to require the sizable capital infrastructure investment that is typical of life science or biotech projects. The Company's collaborative research agreement with UBC has provided it with access to a world renowned wine research facilities. These facilities include state-of-the-art equipment allowing this project to be significantly more cost-effective than building internal infrastructure. Once the technology is completed, the yeast strain production is easily scaleable through a known and well understood manufacturing process. The Company has the necessary financial capital to take its yeasts to commercialization (refer to current financial statements).