Fytokem announces Q3 2007 financial results



    TSX Venture Exchange: FYT

    SASKATOON, Nov. 29 /CNW/ - Fytokem Products Inc. (the Company) today
announced its financial results for the third quarter of 2007.
    "Our Q3 results reflect the costs of efforts currently underway that will
develop increased sales" said Art Hesje, President and CEO of Fytokem. "I
expect our efforts aimed at product improvement and new products to result in
strengthened revenue in the short and long-term."
    Consumers are selecting more natural, preservative-free finished products
while some manufacturers are developing their own preservative systems using
preservative-free ingredients. We are accommodating these trends with the
development of new product formats that provide the same competitive
efficacies and yet appeal to a wider range of customers and products. During
the quarter we completed product development work on preservative-free product
formats for our current product lines. Work on these products began over a
year ago. These newly formatted products are being introduced to the market.
    In addition, we continue to work on developing new active ingredients and
other revenue sources that will allow us to develop the value of our research
library.

    About Fytokem Products Inc.

    Fytokem Products Inc. develops and delivers proven natural ingredients to
leading formulators in the personal care, nutraceutical and pharmaceutical
industries. The Company has been issued patents for technology related to two
of its products and has other patent applications pending.
    Fytokem has two product lines currently offered in the market. Canadian
Willowherb(TM) is a multi-function plant extract with strong efficacies as an
anti-irritant, and anti-oxidant that also has application as an acne
treatment. Tyrostat(TM) is a multi-efficacy plant extract sold primarily for
its use as a tyrosinase inhibitor which provides skin-lightening efficacy.

    The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release. Statements contained in this news release, which
are not historical facts, are forward-looking statements that involve risks,
uncertainties and other factors that could cause actual results to differ
materially from those expressed or implied by such forward-looking statements.
Fytokem disclaims any intention or obligation to update or revise any
forward-looking statement, whether as a result of new information, future
events or otherwise.


    
    Fytokem Products Inc.
    Statements of Income (Loss) and Deficit
    (Unaudited)

                             Three Months Ended         Nine Months Ended
                                 September 30              September 30

                              2007         2006         2007         2006
                          ------------ ------------ ------------ ------------
    REVENUE
      Sales               $   156,338  $   184,256  $   625,444  $   805,737
      Cost of sales            72,413       67,254      278,222      269,794
                          ------------ ------------ ------------ ------------
      Gross margin             83,925      117,002      347,222      535,943
      Other revenue                 -            -            1            2
                          ------------ ------------ ------------ ------------
                               83,925      117,002      347,223      535,945
                          ------------ ------------ ------------ ------------
    EXPENSES
      Product development      38,498       37,291      124,135      110,906
      Marketing                14,371       18,341       57,310       62,080
      Finance and
       administration          67,830       72,303      225,123      224,255
      Amortization              5,685        6,460       16,950       18,988
      Interest on long
       term debt               11,143        8,013       34,894       27,793
      Dividend interest
       on Series A
       Preferred Shares        10,953        8,564       30,220       24,916
      Accretion on
       convertible demand
       loan                     1,953        6,925        9,698       23,601
      Stock compensation
       expense                 (1,650)       2,183        4,383       17,650
                          ------------ ------------ ------------ ------------
                              148,783      160,080      502,713      510,189
                          ------------ ------------ ------------ ------------

    NET INCOME (LOSS)         (64,858)     (43,078)    (155,490)      25,756
                          ------------ ------------ ------------ ------------
    DEFICIT, BEGINNING
     OF PERIOD              5,161,383    4,896,604    5,070,751    4,965,438

    DEFICIT, END OF
     PERIOD               $ 5,226,241  $ 4,939,682  $ 5,226,241  $ 4,939,682
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------

    BASIC AND DILUTED
     (LOSS) INCOME PER
     SHARE (Note 7)       $    (0.004) $    (0.002) $    (0.009) $     0.001
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------



    Fytokem Products Inc.
    Balance Sheets
    September 30, 2007 and December 31, 2006
    (Unaudited)

                                                   September 30, December 31,
                                                        2007         2006
                                                    ------------ ------------
    CURRENT ASSETS
      Cash                                          $       658  $       643
      Accounts receivable                               164,619       57,518
      Inventories                                       265,184      230,381
      Prepaid expenses                                      635          501
                                                    ------------ ------------
                                                        431,096      289,043

    DEFERRED FINANCE CHARGES                                272        1,808
    CAPITAL ASSETS                                       29,761       41,126
                                                    ------------ ------------
                                                    $   461,129  $   331,977
                                                    ------------ ------------
                                                    ------------ ------------

    CURRENT LIABILITIES
      Accounts payable and accrued liabilities      $   802,691  $   513,972
      Accrued liability relating to Series A
       Preferred Shares                                 146,964      116,743
      Current portion of long term debt (Note 3)        270,000      273,378
                                                    ------------ ------------
                                                      1,219,655      904,093

    LONG TERM DEBT (Note 3)                             384,673      419,975
                                                    ------------ ------------
                                                      1,604,328    1,324,068
                                                    ------------ ------------

    CAPITAL DEFICIENCY
      Common Shares (Note 4)                          3,895,499    3,895,499
      Equity portion of convertible demand loan          56,683       56,683
      Contributed surplus (Note 6)                      130,860      126,478
      Deficit                                        (5,226,241)  (5,070,751)
                                                    ------------ ------------
                                                     (1,143,199)    (992,091)
                                                    ------------ ------------
                                                    $   461,129  $   331,977
                                                    ------------ ------------
                                                    ------------ ------------



    Fytokem Products Inc.
    Statements of Cash Flows
    (Unaudited)

                             Three Months Ended         Nine Months Ended
                                 September 30              September 30
                              2007         2006         2007         2006
                          ------------ ------------ ------------ ------------
    CASH FLOWS FROM
     (USED IN) OPERATING
     ACTIVITIES
    Net income (loss)     $   (64,858) $   (43,078) $  (155,490) $    25,756
    Items not affecting
     cash
      Amortization              5,685        6,460       16,950       18,988
      Non-cash interest
       expense                    452          634        1,536        1,902
      Non-cash accretion
       expense                  1,953        6,925        9,698       23,601
      Non-cash stock
       compensation
       expense                 (1,650)       2,183        4,382       17,650
                          ------------ ------------ ------------ ------------
                              (58,418)     (26,876)     122,924       87,897

    Changes in non-cash
     working
      Accounts receivable    (116,696)      71,045     (107,101)     (45,274)
      Inventories             (45,811)     (59,499)     (34,804)     (31,469)
      Prepaid expenses           (149)        (138)        (133)        (109)
      Accounts payable
       and accrued
       liabilities            147,366        4,925      288,720       24,065
      Accrued liability
       relating to
       Series A Preferred
       Shares                  10,953        8,564       30,220       24,916
                          ------------ ------------ ------------ ------------
                              (62,755)      (1,979)      53,978       60,026
                          ------------ ------------ ------------ ------------


    CASH FLOWS USED IN
     INVESTING
     ACTIVITIES
      Acquisition of
       equipment               (2,184)      (6,189)      (5,585)      (7,431)
                          ------------ ------------ ------------ ------------
                               (2,184)      (6,189)      (5,585)      (7,431)
                          ------------ ------------ ------------ ------------

    CASH FLOWS (USED IN)
     FROM FINANCING
     ACTIVITIES
      Proceeds from
       issuance of common
       shares                       -            -            -       15,000
      Repayment of long
       term debt              (18,378)     (44,287)     (48,378)     (71,013)
                          ------------ ------------ ------------ ------------
                              (18,378)     (44,287)     (48,378)     (56,013)
                          ------------ ------------ ------------ ------------

    NET INCREASE (DECREASE)
     IN CASH DURING THE
     PERIOD                   (83,317)     (52,455)          15       (3,418)

    CASH POSITION,
     BEGINNING OF PERIOD       83,975       84,897          643       35,860
                          ------------ ------------ ------------ ------------
    CASH POSITION,
     END OF PERIOD        $       658  $    32,442  $       658  $    32,442
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------

    SUPPLEMENTAL
     INFORMATION
      Cash interest paid  $    10,691  $     7,379  $    33,359  $    25,891
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
    




For further information:

For further information: Art Hesje, President and CEO, Fytokem Products
Inc., (306) 668-2552 tel, (306) 978-2436 fax, ahesje@fytokem.com,
www.fytokem.com

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FYTOKEM PRODUCTS INC.

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