Forbes Medi-Tech Receives Financing

Forbes Medi-Tech Receives Financing

VANCOUVER, British Columbia--Forbes MediTech Inc.(TYS: FMI, NASDAQ:FMTI) restructured its operations and management sectors,effectively laying off more than half its workforce.

"In today's financial environment, it is important for usto retain cash and optimize our human resources while remaining focused on ourkey objectives in both our sterol commercialization initiatives andpharmaceutical development program," said Charles Butt, president and chiefexecutive officer.

As a result, the company will no longer be conducting researchon-site but will instead be outsourcing science needs to universities andcontract research organizations. In the company's last financial statement,dated Aug. 29 for the second quarter (2Q02) ended June 30, research expenseswere already being reduced, coming in at US$593,000 for 2Q02 compared toUS$769,000 in the same quarter the year prior.

Under the restructuring, Forbes also laid off 18 from its staffof 35. The company expects this will lead to an annual savings of US$547,000.

This shift in the company's operations also led to promotionsfor a few people. Laura Wessman was promoted to the newly created position ofvice president of business development and Patricia Pracher, previously directorof financial services, was promoted to corporate controller.

The company was given an extra 180 days, or until April 14,2003, from the NASDAQ Stock Market to become compliant with NASDAQ's US$1minimum per share bid to continue to be listed on the SmallCap Market.

The company also announced it had received US$625,000 throughthe issuance of 1.5 million special warrants at $.65 per special warrant throughDominick & Dominick Securities Inc. of Toronto. Each special warrant willconvert into one common share on Jan. 24, 2003. This is part of a concurrentoffering still being discussed in brokerage firms in New York.

"This financing provides Forbes with an important cashinfusion, which, together with the remainder of this year's sterol salescommitments, will sustain the company's operations into 2003," Butt said.He added that the company would continue to seek additional financing to supportits operations in the coming year.

Forbes also stated it had secured sterols supply agreements forup to US$25.6 million over a two-year period based on customer forecasts. Thisincludes a major supply agreement between its manufacturing joint venture, Phyto-SourceLP, and a large multi-national company. The identity of the customer andcontractual terms and conditions are being withheld for competitive reasons,according to the company (www.forbesmedi.com).