Fytokem Products Receives Financing Commitment

Fytokem Products Inc., a Saskatoon, Canada-based life sciences company that manufactures therapeutic plant extracts and bioactive molecules for the personal care, nutraceutical, pharmaceutical and bio-industrial industries, has entered into a subscription agreement with Saskatchewan’s Agri-Food Equity Fund (AFEF) to invest up to $400,000 in the company. The AFEF was launched in 1994 by Saskatchewan Agriculture and Food to help diversify the province’s agriculture industry by investing in new or expanding businesses.

Under the agreement, AFEF will purchase up to $250,000 on or before Oct. 31 of Series A Preferred Shares. A second investment of up to $150,000 in Series A Preferred Shares will be made prior to Dec. 31, if the company is able to raise additional capital. The secondary investment will be made on the basis of $1 of AFEF investment for every $2 of additional capital raised in excess of $500,000.

Fytokem has the option of redeeming up to one-third of the total number of shares purchased each year starting in January 2005. Any Series A Preferred Shares not redeemed by Fytokem could be converted to common shares at the discretion of AFEF, executives said.

“The AFEF has been a long-time supporter and shareholder of Fytokem and we are delighted to see them increase their commitment to the Company,” commented Art Hesje, president and chief executive officer, Fytokem. “This investment, together with additional financing options we are pursuing, will ensure that we have the resources to continue to execute on the product development and marketing of our bioactive product suite.”