VANCOUVER, British Columbia— Forbes Medi-Tech Inc. (OTCBB: FMTI) entered into an agreement with MHT LLC, an affiliate company to Marco Hi-Tech JV LLC, to sell substantially all of its Reducol™ assets, including inventory and intellectual property, for approximately US$1.4 million, subject to shareholder approval. Forbes will then liquidate its affairs, distributing net proceeds to its shareholders. It expects those proceeds to be in the range of $0.08 to $0.13 per share, to be distributed approximately six months after the sale is completed.
The company has struggled in the past year to achieve liquidity, fighting both the general economic downturn and industry challenges. Charles Butt, Forbes’ CEO and president, noted the company had been funded and structured as a publicly-traded pharma company, gaining revenue from its nutraceutical business. The company attempted to shift the paradigm in 2008, closing its pharmaceutical development program and gaining equity financing in an attempt to expand its nutraceutical business through acquisition. However, Butt concluded, “with the fundamental shift in the sentiment of the capital markets in general, we felt compelled to re-examine our long-term plan. Consequently, the company’s board of directors, in the interest of stakeholders, ultimately determined that Forbes should divest its Reducol assets and distribute the net proceeds to its shareholders.”
Forbes is convening a special meeting of shareholders in mid-August to approve the asset sale and liquidation, both of which have been recommended by the company’s board of directors. The moves require a two-thirds approval of shareholders; the president, CEO, board members and senior officers have indicated their intent to vote for the sale and liquidation. Assuming both pass, Forbes’ common shares will be cancelled and de-listed from the OTCBB, likely by the first quarter of 2011.
