Fytokem Accepts Conditional Investment Offer

The primary conditions of this private placement are that existing debt-holders of the corporation convert their debt instruments to equity. When completed, the conversions will sharply reduce the interest expenses incurred and substantially strengthen the Company's balance sheet.

The investment will see new equity of $400,000 on closing and a further $450,000 over the next three years. The initial investment will result in the issuance of 8 million shares. The follow-on investment will result in additional shares being issued over the next three years totaling 2.75 million common shares. The prices for the new equity will range from $0.05 per share on closing, to a high of $0.30 for the final transaction. All components of the transaction are subject to approval by regulatory authorities and the TSX Venture Exchange.

"We are very pleased with the investment proposal. It will provide a much needed cash infusion which gives us the opportunity to further grow our existing markets and help to launch the new products we have been working on", said Art Hesje, President and CEO. "I'm also pleased to see that our efforts have attracted the attention of the private investment community." -- www.cnxmarketlink.com