Functional Technologies Corp FEBTF

AlphaNorth Asset Management

[Tommer3]

Acquired ownership of 1,365,000 units


EARLY WARNING REPORT

THIS REPORT IS MADE PURSUANT TO NATIONAL INSTRUMENT 62-103

1. Name and address of Offeror:

AlphaNorth Asset Management

144 Front Street West, Suite 420

Toronto, ON M5J 2L7

(the “Offeror”)

2. The designation and number or principal amount of securities and the Offeror’s

securityholding percentage in the class of securities of which the Offeror

acquired ownership or control in the transaction or occurrence giving rise to the

obligation to file the news release, and whether it was ownership or control that

was acquired in those circumstances:

On December 16, 2010, the Offeror acquired beneficial ownership of 1,365,000 units

(the “Units”) of Functional Technologies Corp. (the “Issuer”) at a price of
.55 per

Unit through a private placement. Each Unit consists of one common share (a

“Share”) and one-half of a share purchase warrants (a “Warrant”). Each whole

Warrant will entitle the holder to acquire one additional Share for a period of 24

months at an exercise price of
.70 per Share. Assuming exercise of all the

Warrants, the Offeror would have acquired a total of 6,042,000 shares of the Issuer

which would represent 16.7% of the then issued and outstanding shares of the Issuer.