Forbes Medi-Tech, Inc. issued a press release after the closing bell on Friday to announce the closing of an asset sale in which the majority of its assets have been sold to Pharmachem Laboratories, Inc. In negotiation since July, this sale was previously announced as accepted on August 20, 2010 in which terms were reached at US$4.0 million.
This dollar amount is significantly higher than the amount offered by MHT, LLC as announced in initial negotiations for an asset sale as announced in July. Pharmachem Laboratories is a U.S.-based manufacturer and supplier of ingredients, including nutritionals, food and beverages, flavors and fragrances. Forbes Medi-Tech, in connection with the sale approval, has changed its name to FMI Holdings Ltd.
While not formalized as of yet, Abakhan & Associates, Inc. has been designated as liquidator. This has been approved by the shareholders. It is expected that the formalities will be completed in the beginning of September 2010.
Shareholders are expected to receive on distribution payment as a result of the closing of the Company. This cash payment will not be realized until the assets are sold. The Company’s costs and liabilities will also be factored into the consideration, but it is estimated that the net proceeds will be in the area of CDN$.50 to CDN$.58 per share and can be expected approximately 6 months following all required claims actions. Upon distribution of considerations, it is expected that all common shares will be cancelled and the Company will no longer be listed on the “Over the Counter Bulletin Boards.” Provided that no complications occur, finalization of the complete dismantling of the Company is targeted to be completed in the first quarter of 2011.
Shares of FMTI popped up from $.12/share on the news earlier this month and closed Friday at $.44.