AFMNet Annual Report - 2008/2009

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The Advanced Foods & Materials Network

2008/2009 Annual Report

AFMNet is supported by the Government of Canada through a Networks of Centres of Excellence program.

www.afmnet.ca

The Advanced Foods & Materials Network INSPIRATION FROM THE GROUND UP The Advanced Foods and Materials Network (AFMNet) had a very exciting 2008-2009 year.

In October of 2008, we secured our third cycle of funding from the federal government, through their Networks of Centres of Excellence (NCE) program. This exciting news allowed us to move ahead quickly with the selection of 12 new Discovery Research projects, in addition to our many and ongoing Strategic Transition & Application of Research (STAR) grants.

In this report, you will see how AFMNet is addressing its 4 major priorities of Research Excellence; Training Tomorrow’s Leaders; Networking and building Partnerships; and facilitating Knowledge and Technology Exchange and Exploitation. You will read how AFMNet researchers are helping Canadians fight against chronic diseases like diabetes and heart disease by way of the food system; how AFMNet HQP are securing exciting

careers and; how industry is coming on board with many of our projects to help science reach the consumer.

You will also learn of 2 very exciting new AFMNet initiatives: The Verna Kirkness “Be a Food Researcher for a Week” program and the Guelph Wellness Initiative. These programs are excellent examples of how AFMNet is reaching out to the Canadian community to foster the love of research and to increase the overall health of our citizens.

As we move forward, AFMNet will continue to focus on innovative, food and bio-materials research that produces tangible, practical benefits for Canadians. We are proud of what our Network has already accomplished and are extremely excited for the long-term benefits AFMNet will provide Canadians.

Dr. Larry Milligan Board Chair

Dr. Ron Woznow Chief Executive Officer

Prioritizing for

SUCCESS

AFMNet is Canada's national food and bio-materials research Network. Together, our researchers are presenting new ideas and developing new biology-based technologies to produce commercially viable, socially acceptable value-added products and processes that benefit all Canadians. Partnering with industry, government, not-for-profit organizations and national and international research institutions, AFMNet is providing scientific, social and economic return to Canada.

In August of 2008, AFMNet issued a third call for proposals and, after a rigorous review process, reduced our Discovery Research projects from 20 to 12. This number is complemented by our additional Strategic Transition & Application of Research (STAR) projects, currently at 6. Although we have fewer projects, our new portfolio comprises more comprehensive, more multidisciplinary projects with larger funding envelopes. The increased focus of our Round 3 projects advances our research objectives of effectively

balancing curiosity driven research (Discovery Research projects) and application based research (STAR projects).

Dr. Rickey Yada Entering our third funding cycle, Chief Research Officer AFMNet will continue to focus its research on the following critical areas: • Nanotechnology related to food and bio-materials; • Nutrigenomics and disease; • Consumer attitudes and behaviour and; • Traceability and authenticity of foods and food ingredients.

Projects that address the questions of social acceptance of products and services resulting from the use of new technology and the legal and regulatory issues that would impact the viability of new products and services are a priority.

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The Networks of Centres of Excellence is a joint program of the Natural Sciences and Engineering Research Council of Canada, the Social Sciences and Humanities Research Council of Canada, the Canadian Institutes of Health Research and Industry Canada.

Launched in 1989 to manage the original Network of Centres of Excellence (NCE), today the NCE Secretariat runs four national initiatives: Networks of Centres of Excellence (NCE); Centres of Excellence for Commercialization and Research (CECRs); Business-Led Networks of Centres of Excellence (BL-NCEs) and; Industrial Research and Development Internship program (IRDI).

AFMNet has 4 major priorities, outlined here and highlighted through our research success stories on the pages to follow ...

Research Excellence In the last 5 years, AFMNet funded research has resulted in 490 peer reviewed scientific publications.

For examples of our Excellence in Research, please see pages 3-4.

Building Capacity AFMNet is committed to helping create the leaders of the future.

By providing multidisciplinary, multisectoral training that facilitates opportunities and interaction with other universities, government and industry, we are increasing the value, visibility, and marketability of our Highly Qualified Personnel - undergraduate and graduate students, postdoctoral fellows and research associates. To meet some of our very talented HQP, please see pages 5-6.

Networking and Partnerships AFMNet consists of 149 researchers and 208 Highly Qualified Personnel and partners with 44 corporations, 24 universities, 20 government agencies and 16 non-governmental organizations.

Each plays an important role in helping AFMNet achieve its goals.

Moving forward, AFMNet will continue to build formal linkages with leaders in industry, academia and government to help guide the development and foci of AFMNet’s research programs and commercialization of new technologies. To get a sense of what can be achieved when working together, please see page 7-9.

Knowledge and Technology Transfer Scientific discoveries are the start of creating benefits for Canada from research. Since 2004, AFMNet research has resulted in 3 start-ups, 9 patents, 18 patent applications and 9 licenses. In addition, its research findings have been used by provincial and federal health regulators in the design of food policy regulations.

To read examples of our successes and promising projects, please see page 10-12.

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Research EXCELLENCE

Proving the link between vitamin C deficiency and obesity in young Canadians AFMNet researchers Leah Cahill and Ahmed El-Sohemy prove you’re never too young for a healthy dose of vitamin C.

One in seven young adults in Canada is deficient in vitamin C, according to a first-of-its kind AFMNet study of Canadians between the ages of 20 and 29. The study was conducted by AFMNet researchers Ahmed El-Sohemy and Leah Cahill of the Department of Nutritional Sciences at the University of Toronto.

In addition to determining this staggering deficiency, the study also found that young adults with a vitamin C deficiency have significantly higher waist circumference, body mass index, inflammation and blood pressure – indicators of chronic disease and obesity – than do people with adequate blood levels of vitamin C. The reason for these elevated indicators can be explained by the wide range of health benefits provided by vitamin C. Regarding chronic disease, vitamin C protects cells and their DNA from damage that can cause inflammation and heart disease. It also keeps the immune system nourished, strengthening it to battle ailments from the common cold to various types of cancers. Vitamin C also helps battle obesity by helping to produce a molecule called carnitine needed to burn fat. Studies have shown that subjects with inadequate blood vitamin C concentrations burn less fat during exercise than subjects with adequate vitamin C. Therefore, vitamin C deficient people may be more resistant to fat loss and more likely to become obese. The fatigue that accompanies vitamin C deficiency

may also prevent people from being as active as they could be if they had adequate vitamin C levels.

“Our research found that 47 per cent of young Canadian adults have deficient or sub-optimal blood levels of vitamin C, which is associated with adverse health effects,” said Dr. El-Sohemy. “These results demonstrate the importance of obtaining the recommended dietary allowance of vitamin C for young Canadians.”

The recommended dietary allowance for vitamin C is 75 milligrams (mg) per day for women and 90 mg/day for men. Since vitamin C is not naturally produced in the body, people must obtain this essential nutrient from their diet. Leah Cahill, a registered dietitian and AFMNet HQP, suggests that “fruits and vegetables are excellent sources of vitamin C.” For example, a yellow pepper contains 341 mg, 3 spears of broccoli contain 87 mg and an orange contains 70 mg of vitamin C. “Canadians need to incorporate more vitamin C into their diets. It’s so easy to obtain, it’s good for your health and many sources are delicious.”

The findings of the study, called Vitamin C Deficiency in a Population of Young Canadian Adults, were submitted to the American Journal of Epidemiology in March 2009 and published in July 2009.

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Ensuring Canadians achieve recommended levels of folate in their diet without possible negative effects of folic acid University of British Columbia Professor David Kitts and colleagues are looking at ways to use a reduced form of folate (one of the B vitamins), called L-5-methyltetrahydrofolate (L-MTHF), as an alternative to folic acid in food fortification practices.

Folate deficiency, due to insufficient dietary folate intake, can result in an increased risk of acute and chronic disease, most notably neural tube defects, such as spina bifida in a developing fetus. Low folate may also be associated with risk of cardiovascular disease.

Since 1998, Canada has supported mandatory fortification of flour with folic acid (a synthetic form of folate), but research suggests

there may be possible health concerns associated with consuming excessive amounts of folic acid, such as masking a Vitamin B12 deficiency.

AFMNet researchers are finding ways to stabilize the less stable L-MTHF so that it can be used as a replacement to folic acid. Once L-MTHF has been successfully developed in a capsule form, investigators will turn to additional nutrigenomic studies to investigate the epigenetic mechanisms related to L-MTHF. Finally, a clinical study is planned to take place in Southeast Asia where populations are predisposed to folate deficiency.

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Creating a “salty” taste without using much salt

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AFMNet researcher Dérick Rousseau from Ryerson University is helping the processed food industry develop effective ways of making foods like pizza, cheeses, breads and soup taste salty using less salt.

Studies show that reducing salt content in food by 20 to 30 per cent can lead to substantial reductions in healthcare costs by helping to decrease the risk of high blood pressure and heart disease. However, what typically results is a bland taste.

AFMNet researchers are using the concept of controlled release – similar to that found in over-the-counter acetaminophen-timed release capsules – to simulate the experience of a ‘salt hit.’

“Processed foods such as pizza and soup are often high in salt. But distribution and how quickly our taste buds sense the salt have an impact in the ‘perceived saltiness’ of food,” explains Rousseau. “For example, people believe potato chips are saltier than canned tomato soup. Because most of the salt on chips is on the surface, the saltiness is perceived more quickly, in comparison to tomato soup where the salt is dissolved evenly. In fact, the concentration of salt is about the same.” Rousseau’s research - to encapsulate grains

AFMNet researcher Dérick Rousseau is helping the Canadian food industry cut back on salt without cutting back on taste.

of salt to release an initial burst of saltiness followed by hits of salt while chewing - will allow food manufacturers to use less salt (about 25 per cent) without sacrificing taste.

Rousseau’s work could be a significant breakthrough for the food industry, which is facing growing calls for sodium reduction but is worried about making products less appetizing. In addition, by using normal table salt – as opposed to salt substitutes – AFMNet researchers are providing food manufacturers with a cost-effective way to maintain product acceptance, quality and safety.

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Training Tomorrow’s LEADERS Each year, AFMNet HQP transition into exciting new faculty positions both in Canada and abroad. Below are the stories of Apollo Tsopmo and Kunal Pal.

Former AFMNet HQP Apollo Tsopmo is now a faculty member at Carlton University in Ottawa, Ontario.

Apollo Tsopmo tells his story: In July 2005, I joined the Department of Human Nutritional Sciences of the University of Manitoba as a postdoctoral fellow in Dr. James Friel’s laboratory.

A few months later our project, entitled Bioactive Compounds of Human Milk, was selected by AFMNet for funding, starting my involvement with the Network and the HQP Association.

As part of my AFMNet project, I developed separation methods and assays to identify novel compounds in human milk that have antioxidant properties. These antioxidants can be used to reduce lung and intestinal diseases in infants, most of which are related to oxidative stress. Results from this research have been published and presented at international conferences such as Experimental Biology and Free Radical Biology, as well as at the AFMNet Scientific Conference.

As a member of the HQP Association, I also actively participated in 3 professional development workshops organized by the Association and found these workshops very interesting, not only in terms of networking, but also in terms of the content and what I was able to take away from the various speakers and sessions.

In July 2008, having completed my postdoctoral work with Dr. Friel, I joined the Food Science and Nutrition program at Carlton University, Ottawa as an Assistant Professor. This is a new program at Carleton and is designed to provide students solid science knowledge in chemistry, biology and biochemistry with a strong emphasis on assessment, management and communication of risk in food safety. Graduates of the program will not only be skilled scientists but will also have the ability to assess risk and formulate policy.

My time as part of the Advanced Foods & Materials Network helped me become a better researcher. More importantly, perhaps, is that it taught me the importance of getting science out of the lab and to the public, whether as a product like that of an improved formula for babies or in terms of policy to increase public safety. I thank AFMNet for the experience and am enjoying applying what I’ve learned to my new role as a professor, teaching courses in Food Chemistry and Food Analysis.

Kunal Pal tells his story: My post-doctoral fellowship at Ryerson University in Toronto began in February 2007. As the aircraft landed at Pearson International Airport, I found an amazing landscape with snow blanketing most of the airport. I hadn’t seen such a spectacle before in India, Former AFMNet HQP Kunal Pal is now a where we have to go to the faculty member at the National Institute mountains to catch a of Technology in India. glimpse of snow. My supervisor, Dr. Dérick Rousseau, met me at the airport and the next day took me to his Food Research Laboratory at Ryerson, where I received a very warm welcome.

After only two weeks, Dérick asked me to visit Dr. Allan Paulson’s laboratory at Dalhousie University in Halifax, marking the kickoff of my cross-Canada travels! Thereafter, I had the opportunity to attend various meetings and Professional Development Schools that helped to improve my technical skills, scientific knowledge and presentation skills, along with my self-confidence. I was also elected Vice-Chair of the 2008-09 AFMNet HQPA Governing Council, a position that helped me to improve my communication, administrative and organization skills.

During my second year in Canada, I was encouraged by Dérick to apply for jobs back in India as I was getting homesick and wanted to establish an academic career in my home country. I applied for a number of posts, including one at the National Institute of Technology in Rourkela, India, regarded as an Institute of National Importance for 5 years and funded by the Government of India.

I have no doubt that the hands-on-experience I gained working in Dr. Rousseau’s lab put me ahead of a large number of researchers back in India and helped me secure this exciting position. And now, a few months in, I clearly see how the academic experience at Ryerson and administrative training as a member of AFMNet were extremely beneficial in preparing me for the challenges associated with being a young faculty member. My new-found abilities are allowing me to prosper in this competitive environment.

Thank you and I invite you all to come visit me in India!

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Photo Credit: Mar tin Sch walb e

AFMNet HQP serves as mentor for award-winning high school science project

AFMNet HQP Sarah Schooling helped Guelph high school student Jenny Tian win gold at a regional science fair.

AFMNet HQP are instrumental in mentoring new students joining research labs each year. The 2008-2009 year, however, saw them take a very active role in the mentoring of Canadian high school students. One example is the “Be a Food Researcher for a Week” program (see page 7). The other is the story of Sarah Schooling and Jenny Tian...

In January 2009, Jenny Tian, a Grade 11 student at Centennial Collegiate Vocational Institute in Guelph, wanted to investigate the effectiveness of cleansers used in homes, hospitals and food-processing plants. To conduct the required experiments and answer the many questions associated with her science project, however, Jenny needed a mentor and access to laboratory facilities beyond those available at her high school.

Through her school administration, Jenny was paired up with AFMNet HQP Sarah Schooling at the University of Guelph. Schooling is a post-doctoral fellow in John Dutcher’s lab and works on his AFMNet-funded Bacteria, Biofilms and Foods project.

Twice a week, starting in January, Jenny visited Sarah after school to test cleaning agents against a variety of microbes found in homes, industry and institutions such as hospitals. She worked with Sarah to study benign strains of bacteria, including Escherichia coli, Staphylococcus aureus and Pseudomonas aeruginosa.

Disinfectants and sanitizing agents used at the recommended concentrations are known to reduce, but not eradicate, the bacterial load. Importantly, Jenny’s experiments demonstrated that viable bacteria were able to stick to surfaces during treatment and began to form biofilms - even at recommended concentrations and application times. These biofilms may cause further problems — they are inherently more resistant to treatment and release cells and extracellular products that may contaminate substances such as foods and food-processing surfaces. This raises questions as to whether chemical disinfection may actually promote cell attachment and biofilm formation.

In April 2009, Jenny entered her results into the Waterloo-Wellington Science and Engineering Fair and was very successful. She took home the gold medal in the biotechnology senior category, as well as an award for innovative lab techniques. Tian also presented her work at the 2009 Sanofi-Aventis BioTalent Challenge and the 2009 AFMNet Annual Scientific Conference and says she learned a lot from these experiences, as well as from her University of Guelph mentor.

Sarah also found the experience rewarding: “This has been an invaluable experience. I had never been involved in an outreach project, nor had I had the challenge of supervising and mentoring a high school student – very different from working with university students. Jenny’s excellent work ethic and commitment to succeed were outstanding. It was also a unique opportunity for Jenny to sample ‘life-in-the-lab’.”

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Networking & PARTNERSHIPS Partnering with the aboriginal community to foster the love of science

Dr. Ahmed El-Sohemy with participants Lindsay (Winnipeg, MB) and Shyanne (Baker Lake, NU).

2009 was the inaugural year for AFMNet’s “Be a Food Researcher for a Week” program. The program was designed for First Nations, Métis and Inuit students in Grades 11 and 12 with an aptitude in science or social science and an interest in the field of food science and nutrition.

After an application process, twelve Aboriginal high school students – from Ontario, Quebec, Manitoba, Saskatchewan, Alberta, Northwest Territories and Nunavut – were selected to participate and spent their Spring Break in university labs country-wide to work alongside some of Canada’s top scientists conducting experiments in cutting-edge food and nutrition research.

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And the weeks were action and information packed. For example,

Lindsay from Winnipeg and Shyanne from Nunavut spent time in Dr. Ahmed El-Sohemy’s nutrigenomics lab at the University of Toronto. Here, they observed how to collect data from subjects and learned lab techniques such as DNA isolation and genotyping. The students also toured the University of Toronto campus, saw the food production and development labs at George Brown College and met Chef David Wolfman from the TV show ‘Cooking with the Wolfman’ on the Aboriginal Peoples Television Network.

“Taking part in the “Be a Food Researcher for a Week” Program was truly one of the most enlightening experiences of my life.

The trip opened my eyes to different universities and to the various careers available to individuals through nutrition research,” says Lindsay.

The partnerships formed between the participants, researchers and HQP will last a lifetime. Additional partnerships were also developed and/or strengthened through this one-of-a-kind program. They include: • AFMNet and secondary schools across Canada – AFMNet reached out to high schools across Canada to spread word of this new program and to encourage applicants. Science teachers, guidance counselors and principals from across the country advertised the program, wrote glowing reference letters and encouraged their students to take advantage of this unique opportunity.

• AFMNet and aboriginal leaders - AFMNet built a partnership with the aboriginal community, speaking about the program to the leaders of such influential groups as the Métis National Council, Congress of Aboriginal Peoples, Native Women’s Association of Canada, National Aboriginal Achievement Foundation and Inuit Tapiriit Kanatami.

• AFMNet and the media - the program was very well received by Canadian media, receiving national coverage n nso e t in 10 daily newspapers; 8 community papers; 22 on-line media sites; 8 television programs; 8 radio programs or M and 2 publications. The combined media coverage had an audience reach of over 7.98 million people!

• AFMNet and Calm Air - Calm Air, a regional airline operating throughout Manitoba and Nunavut, sponsored the round-trip flight of Shyanne between Baker Lake, Nunavut and Toronto, Ontario. For the 2010 year, we are looking for more, great sponsors and encourage you to contact AFMNet if you’re interested in helping aboriginal youth develop a love, and career, in science!

The “Be a Food Researcher for a Week” program is run in honour, and with the support of, Dr. Verna J. Kirkness, a member of the Order of Canada and lifelong advocate of Aboriginal education. “Education is the key to the future of our young Aboriginal people and an opportunity to be a food researcher for a week is an exciting and meaningful connection to the broad world of science,” said Dr. Kirkness.

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Providing the answers to molecular thickets and bacterial defenses through a Canadian-German collaboration.

All living organisms are equipped with small innate protein molecules, known as Cationic Antimicrobial Peptides (CAPs), that naturally fight bacteria. But just how do CAPs inhibit Gram-negative bacteria – a group of bacteria with a unique cell membrane structure? And how do such bacteria protect themselves, on a molecular scale, from first contact with the outside world? Knowing this, researchers could more-easily design CAPs capable of getting through bacterial defenses to destroy disease-causing and spoilagepromoting bacteria.

Pink turned to another of his colleagues, Motomu Tanaka, Professor of Biophysical Chemistry at the University of Heidelberg in Germany, whom he had met as a Post-doctoral Fellow in Munich. Tanaka was a major user of many of the neutron and synchrotron facilities in Europe and, with the Beveridge group supplying samples, he undertook to test the molecular predictions of Pink’s models. He eventually decided that grazing incidence X-ray scattering (GIXOS), to be performed at the European Synchrotron Radiation Facility (ESRF) at Grenoble, would be most likely to succeed.

In the three years since AFMNet provided funds to answer these questions, an international network of researchers has worked effortlessly together, and succeeded in identifying how Gramnegative bacteria build their cell wall into a dense molecular “thicket” in order to protect themselves from incursions from outside and, in particular, CAP-attacks.

Initially, the Tanaka group studied monolayers of lipopolysaccharides (LPS) from rough mutants of S.enterica, a Gram-negative bacterium and, with the Pink group carrying out new modeling and simulations, there was complete agreement between theory and experiment – calcium did indeed protect the membrane surface as had been predicted. But the greatest challenge was to design experiments to be carried out on LPS from wild type P.aeruginosa supplied by Erzsi Papp-Szabo of the Beveridge group. Emmanuel Schneck of the Tanaka group invented a technique to make the LPS layers required, the modeling was carried out by the Pink group and, when polydispersity is taken into account, the two approaches gave essentially identical results (see Figure 1).

In Canada, David Pink, a theoretical physicist from St. Francis Xavier University, worked tirelessly to supply the team with a correct picture of how bacterial surfaces behave in real-life environments. He modeled them mathematically in order to predict what to look for and where to search, and to aid in interpreting experimental data.

The models were sufficiently complex that he had to use the high performance computers at his university funded by the Atlantic Innovation Fund.

Initially, Pink worked with Terry Beveridge’s group at the University of Guelph and with Tom Gill and Lisbeth Truelstrup Hansen’s groups at Dalhousie University, who performed measurements of the minimum inhibitory concentration (MIC) of a specific CAP named protamine, needed to inhibit the bacteria. These measurements confirmed the predictions of the mathematical models. The experiments did not, however, provide evidence of what was taking place on the molecular scale predicted by the models – information important to the design of new CAPs.

Figure 1 Left: Centre: Right:

In the end, the combined experimental and theoretical studies of many AFMNet researchers across Canada, with collaborators in Germany, have discovered one of the principal mechanisms of the resistance of Gram-negative bacteria to CAPs. Divalent cations in the water spontaneously aggregate to the electrically-charged LPS, causing them to form a tightly-packed dense molecular “thicket” on the outside of the cell wall, thus protecting the bacterium from incoming CAPs and other molecules.

The disentangling of these molecular mechanisms and the resulting molecular picture opens the door to develop new and better antimicrobials (drugs that kill or prevent the growth of microbes, including bacteria, fungi and viruses) and, perhaps in the future, better antibacterial compounds for the health sector.

GIXOS experimental data showing the increase in electron density near z = 0, when calcium ions are present – as they are in native bacteria – thus suggesting collapse of the LPS molecules at the bacterial surface.

Electron density predicted by the mathematical model as calcium is added.

Instantaneous snapshots of LPS molecules with no calcium and with calcium (red) showing the collapse into a dense molecular “thicket”.

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Networking & PARTNERSHIPS Bringing people and programs together to make Guelph the wellness capital of Canada The Guelph Wellness Initiative is AFMNet's newest venture. The goal of the initiative is to demonstrate that the wellness of a community can be improved through a combination of citizen engagement, education and program accessibility. AFMNet is leading this project as part of its mandate to translate research into social and economic benefits for Canadians.

The Guelph Wellness Initiative seeks to align all Guelph-based health and wellness programs, create networks for citizen engagement in their own wellness, address gaps in current local initiatives and build new partnerships and opportunities in the local community.

Support for the project has been overwhelming. Dr. Ron Woznow, AFMNet CEO, is thrilled. “In all my years of community work, I have never come across an idea that has gotten people so excited!”

Further to this, support is coming from major players in the area: “I know this will be of tremendous value to our community. Guelph is pleased to be part of this initiative and is very excited at the

prospect of becoming the wellness capital of the world,” remarks City of Guelph Mayor Karen Farbridge.

Dr. Nicola Mercer, Wellington-Dufferin-Guelph Public Health CEO, sees tremendous value in this initiative: “AFMNet’s leadership role in bringing together various health care and other wellness sector organizations, to improve the overall wellness of our community, will be of tremendous value.”

Guelph YMCA-YWCA CEO Jim Bonk supports the project adding that: “I applaud AFMNet’s leadership in bringing health and wellness related organizations together to ultimately improve the overall wellness of our community… I am very excited about the YMCA-YWCA being involved.”

Participants involved will be provided with access to local resources to assist in lifestyle changes towards improving their well being.

They will be measured with six main criteria: blood pressure, blood glucose, body mass index (BMI), flexibility, balance and happiness.

Initial results are expected by June 2010. Stay tuned!

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Knowledge and Technology EXCHANGE AND EXPLOITATION

Photo Credit: M artin Sc hw

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Developing eco-friendly, low carbon-footprint additives for the paint and coatings industry

Mirexus Biotechnologies Inc. founders, Oleg Stukalov and Anton Korenevsky, in the University of Guelph fermentation lab.

The research team of John Dutcher, Oleg Stukalov, Anton Korenevsky and Erzsebet Papp-Szabo discovered polysaccharide nanoparticles (nanoPS™). This discovery grew out of a long-term, multidisciplinary collaboration between researchers in the Departments of Physics and Molecular and Cellular Biology at the University of Guelph, supported by agencies including AFMNet since 2004. In 2007, the team of inventors was one of the first recipients of AFMNet STAR funding, which allowed Oleg and Anton to devote much of their time to the commercialization of their new technology.

NanoPS™ particles have many desirable properties such as a uniform surface chemistry, biodegradability and non-toxicity, and they are easily soluble in water, giving solutions with no significant viscosity even at relatively high concentrations. The combination of these properties in one material is unique and provides many applications for nanoPS™ in the market place. In December 2007, a U.S. provisional patent was filed to protect the commercial opportunities of nanoPS™. The agreement is between the University of Guelph and the researchers, with AFMNet sharing in the revenues generated from the commercialization of the work.

In March 2008, the inventors incorporated Mirexus Biotechnologies Inc. with the goal of Mirexus becoming the sole commercialization entity of the nanoPS™ technology. The team accessed the business advisory services of AFMNet partner BioEnterprise Inc. as well as MaRS Discovery District. Following that, the team secured funding from the OCE Market Readiness program (OCE Phase I), which was matched by a grant from C4, the Technology Transfer Consortium of Universities in Southwestern Ontario. This funding was put towards prototype development and process improvement, as well as towards market research. The results of this research identified medicine and paint & coatings as the two most promising areas of application for nanoPS™.

After consultations with Mirexus’ business advisors, including the Research to Business (R2B) team at AFMNet, Mirexus decided to focus on the coatings market, which also includes toners and inks. With process development help from the Guelph Food Technology Centre, Mirexus developed 2 eco-friendly, low carbon-footprint additives for the paint and coatings industry.

1) The first additive is dispersant of white pigment which allows a reduction in the amount of pigment used and also improves the color properties of the paint.

2) The second product is a viscosity modifier that improves the leveling and splash resistance properties of the paint.

Currently, Mirexus is working with two companies in the paint and coatings segment - Lorama Inc. located in Milton, Canada and a confidential American company.

These nanoPS™ additives, while developed for the paint industry, have other potential industrial applications in the plastics, toner and printing, cosmetics and food industries. To date, Mirexus has partnered with Xerox Research Centre of Canada to test the use of nanoPS™ as components of toners and continues to collaborate with academia in the area of biomedical and food applications for the nanoPS™ technology.

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Eliminating amnesic shellfish poisoning (ASP) and saving Canada’s shellfish growers and processors Propagation of marine algae used to toxify mussels in the Dalhousie Aquatron.

The first reported incident of amnesic shellfish poisoning (ASP) occurred in PEI in 1987 - the ingestion of blue mussels was linked to 19 hospitalizations and 4 deaths. The sickness causing culprit was domoic acid (DA), a heat resistant tricarboxylic acid responsible for permanent and irreversible memory loss in affected individuals and/or death. DA is produced globally by certain marine algae and enters the food chain through filter feeding shellfish such as mussels, clams and scallops.

Although evidence of DA-degrading bacteria has been reported in the past, very little has been done to determine the practical use of these organisms - until now. AFMNet researcher Tom Gill from Dalhousie University, and his team, are working to monitor the DA rate of degradation by toxin-eliminating bacteria and deliver “competent“ cultures to living shellfish. These competent cultures would render the DA non-toxic, eliminating the very harmful toxin from production facilities and, ultimately, the food supply.

Luckily, outbreaks of ASP are relatively infrequent in Canada, mainly due to the intensive sampling and shellfish toxin testing carried out by the Canadian Food Inspection Agency (CFIA). The major control measure, however, is devastating to Canadian companies.

Monitored production sites with more than 20 ug DA/g shellfish tissue are shut down, leading to significant harvesting and processing interruptions. The benefit of eliminating DA from the food system is thus two-fold: • It would improve consumer safety and save lives.

• It would allow an elevated and consistent level of shellfish production, enabling Canadian growers and processors to meet their contractual obligations and maintain their market share.

The project is relying on a multi-disciplinary approach for success.

Researchers include Project Leader Tom Gill, a food scientist, Rafael Garduno, a microbiologist, Carrie Donovan, a former AFMNet HQP and the aquaculture expertise of John Batt and his technical staff at the Dalhousie Aquatron facility. The project also involves input from government and industry. Collaborators include a shellfish grower, a commercial shellfish depuration facility (Innovative Fishery Products) as well as personnel from CFIA.

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Developing fish-derived nutritional products that target obesity-related metabolic disorders like diabetes, heart disease and cardiovascular disease From 2006-2009, AFMNet funded Université Laval professor André Marette and his team to study nutrients found in fish and their effects on the metabolic and genetic profile of humans.

The first part of the study involved feeding fish oil and fish proteins to obese laboratory animals.

And the results are in!

• Fish proteins were found to reduce inflammatory factors produced by abdominal fat, known to promote obesityrelated diseases. Moreover, the salmon protein hydrolysate (SPH) and fish gelatin hydrolysate (FGH) both improved insulin sensitivity thus reducing the risk for diabetes in the obese animals.

• In addition to the work on fish proteins, the team also showed that feeding the obese animals fish oil prevented fat growth, reduced the concentration of glucose in the blood and normalized glucose tolerance and insulin sensitivity.

Taken together, these data show great potential for fish-derived nutritional products that target obesity-related metabolic disorders like diabetes, heart disease and cardiovascular disease in humans - which is where the team has now turned their attention.

The goal of their current AFMNet project is to discover new bioactive fish peptides to ultimately produce a functional food that will reduce the incidence of diabetes and heart diseases in obese, insulin-resistant subjects.

From the projects exciting scientific advancements thus far, have come four equally exciting industrial collaborations.

• Proteus Industries is an American company looking to market a novel fish protein isolate with unique fat-blocking properties.

Marette’s lab has been enlisted to test the ability of this fish protein isolate to improve the metabolic syndrome in obese animals.

• Cooke Aquaculture is also developing a partnership with Marette’s team. Looking to use their fish co-products to produce a new nutraceutical ingredient for the treatment of obesity and related metabolic disorders, Marette’s lab will carry out pre-clinical testing on animal models of metabolic diseases.

• Ocean Nutrition Canada has been a key industrial partner from the beginning of the project and will continue to provide fishderived omega-3 fatty acids for the current research project.

André Marette’s Université Laval research team are using fish to fight disease.

• Norland Industries is also an important partner and will continue to provide the team with fish gelatin hydrolysates to carry out further studies in animal models and possibly for future clinical trials.

Finally, this team will use Santé Bioactives Inc. as a commercialization vehicle for the bioactive fish peptides and lipids they discover. Santé Bioactives is a Pan-Canadian bioactive peptide company started by AFMNet and its researchers working in the area of bioactive peptides.

13 | AFMNet Annual Report 08/09

AFMNet in the NEWS

(A selection of coverage received from April 1, 2008 to March 31, 2009) CBC TV – April 3, 2008 AFMNet researcher Ahmed El-Sohemy is featured in a segment on nutrigenomics. farmcentre.com – April 14, 2008 AFMNet Chief Research Officer (CRO) Rickey Yada and his team are highlighted for their study of the enzyme that prevents the browning of chips made from cold-stored tubers in a potato from North Dakota. The team is working to identify the genes responsible and eventually transfer them to Canadian potatoes. nowtoronto.com – May 1, 2008 AFMNet researcher Serguei Golovan is quoted in an article about PETA’s (the animal rights organization) announcement of a million-dollar incentive to the first group that can meet their criteria and produce in-vitro chicken meat.

YouTube.com – June 9, 2008; New York Times – May 20, 2008; Canadian Press, Le Devoir, CHCH (Hamilton) – May 15, 2008; CTV Newsnet, CTV News, CBC News, A-Channel News (CHUM Barrie), Physorg.com, ScienceDaily, Genetic Engineering & Biotech News, Toronto Star, CTV.ca, Kingston Whig-Standard, St. Catharines Standard, Kitchener-Waterloo Record, Sarnia Observer, Peterborough Examiner, Breitbart.com, Yahoo News, Canoe.ca, The Telegraph (UK), Halifax Chronicle Herald, Truro Daily News, Thaindian News, CBC.ca, Confectionary News, Hamilton Spectator, MSN News, Science Codex, Science Daily, EurekAlert, Newkerala.com, Newswise, Thecheers.org, Guelph Mercury, ScientificBlogging.com, foodnavigator.com – May 14, 2008; Bio-Medicine.org, Science Centric, Thunder Bay Chronicle Journal, MetroNews.ca, Freepublic.com, GeneRef.com – May 13, 2008.

AFMNet researcher Dr. Ahmed El-Sohemy is the principal author of a study, published in the journal Physiological Genomics, that found that a variation of the GLUT2 gene is linked to habitual consumption of sugar.

Pharmacy Post – May 2008 AFMNet researcher Heather Boon is featured in an article on natural health products.

570 Radio (Kitchener) – June 1, 2008; AM980 Radio (London) – May 30, 2008 AFMNet researchers Barbara Moffatt and Gregor Reid are interviewed separately on their research projects.

Science Daily, Chemical Science, Physorg.com, Science Centric – June 10, 2008 AFMNet researcher Dérick Rousseau leads a team studying the surface of chocolate as it ages in order to find a way to maintain its shiny brown appearance instead of becoming dull and white.

Top Crop Manager – June 12, 2008 AFMNet researchers Nicholas Low and Mike Nickerson are developing a technology to create microcapsules made of pea and canola protein designed to hold droplets of flax oil.

St. Catherines Standard, Belleville Intelligencer, Sudbury Star, London Free Press, CanadaEast.com, The Canadian Press, Yahoo Canada – June 17, 2008 AFMNet researcher Ahmed El-Sohemy comments on a study that shows regular coffee consumption is not associated with a higher death rate. nutraingredients-usa.com – June 25, 2008 AFMNet researcher Dérick Rousseau’s study, published in the Journal of Nutrition, shows that fortified cheese is as good as supplements for vitamin D. Rogers Television-First Local News (London) – June 30, 2008 The research project of AFMNet HQP Jamie Hemsworth and her advisor, AFMNet Researcher Gregor Reid, is highlighted. nutraingredients.com – July 1, 2008 AFMNet researcher Dérick Rousseau’s study of controlled release of ingredients is featured.

Guelph Mercury – July 4, 2008 AFMNet CRO Rickey Yada is quoted in this feature article on the Network.

Hamilton Spectator – July 9, 2008; Fresh Plaza.com – July 4, 2008; Simcoe Reformer, Calibre Macro World Online, Guelph Mercury, Kitchener Waterloo Record, Lethbridge Herald, NewsNow.co.uk, Brandon Sun, CBC.ca, Cornwall Seaway News, East Ottawa.ca, Medicine Hat News, MySask.com, MyTELUS.com, Orleans Star, Prince George Citizen, The Monitor.ca, West Island Chronicle, Westmount Examiner – July 3, 2008; Kelowna Daily Courier, Vernon Daily Courier – July 2, 2008; Prince George Citizen – June 28, 2008; Canadian Press – June 27 2008; Business News Network – June 12, 2008 Various interviews with AFMNet researcher Louise Nelson about her research on how to eliminate post-harvest losses in the apple industry due to fungal decay.

Woodstock Sentinel Review, Hamilton Spectator – July 9, 2008; Brandon Sun, Cornwall Seaway News, Guelph Mercury, Kitchener Waterloo Record, Lethbridge Herald, Medicine Hat News, Montreal Monitor, Westmount Examiner, West Island Chronicle – July 3, 2008; Ming Pao, Simcoe Reformer – July 1, 2008; Cape Breton Post –June 30, 2008; Prince George Citizen – June 28, 2008; Business News Network – June 11, 2008;

14 | AFMNet Annual Report 08/09

570 Radio (Kitchener) – June 1, 2008; CFPL-AM (London) – May 30, 2008 Media coverage from the AFMNet Annual Conference including interviews with AFMNet researchers Rotimi Aluko, Spencer Henson, Barb Moffatt and Louise Nelson about their research projects.

Globe and Mail – July 10, 2008 AFMNet researchers David Castle, Conrad Brunk and Richard Gold were part of the scientific panel that published a report warning that products with nanomaterials, tiny substances in everything from sunscreen to diesel fuel, may be toxic.

Ottawa Citizen – August 1, 2008; nutraingredients.com – June 23, 2008 AFMNet researcher Gregor Reid is quoted in articles about probiotics.

Fruit and Vegetable Magazine – September-October 2008 AFMNet researcher Louise Nelson’s study of post-harvest fruit loss due to fungus decay is featured. farmcentre.com – September 1, 2008 AFMNet researchers Robert Hancock, John Vederas and Santosh Misra are part of a team looking at creating new antimicrobial agents for food safety. farmcentre.com – September 15, 2008 AFMNet researcher Yoshi Mine has found that eggshell calcium has high bioavailability – a measurement of the amount of calcium absorbed by the body – and high food safety compared to other calcium supplements.

AgriSuccess Journal – September/October 2008 An interview with AFMNet CRO Rickey Yada on nutrigenomics.

Food Researcher for a Week” internship program for Canadian Aboriginal high school students.

Advanced Foods and Materials Network/Canadian Obesity Network/Canadian Stroke Network Doctor’s Review, Ontario Restaurant News – March 2009; Calgary Herald, marketwire.com, Montreal Gazette, Nanaimo Daily News, Ottawa Citizen, Vancouver Province, Vancouver Sun, Victoria Times-Colonist, Windsor Star, Winnipeg Free Press – February 2, 2009 Three of Canada’s Networks of Centres of Excellence awarded the second national “Salt Lick Award” to the country’s pizza producers for loading the popular fast-food with blood-pressure raising sodium.

CITY-TV, Breakfast Television (Edmonton), Wynyard Advance-Gazette – March 30, 2009; 630 CHED (Edmonton) – March 28, 2009; At Guelph – March 25, 2009; Edmonton Journal, Yellowknife News North – March 23, 2009; Metro, Edmonton – March 20, 2009; K103.7 FM, Kahnawake – March 19, 2009; CBC-Radio (Ottawa Morning) – March 16, 2009; CBC-Radio (Ontario Today) – March 11, 2009; Guelph Mercury – March 10, 2009; Regina Leader Post, The Varsity – March 9, 2009; CFRA Radio (Ottawa) – March 8, 2009; Eastern Door, CJOH-TV/CTV (Ottawa) – March 6, 2009; Global TV (Toronto) – March 5, 2009; 24 Heures, Metro (Ottawa) – March 4, 2009; APTN – February 27, 2009; Kivalliq News, Yellowknife – February 25, 2009; CBC-Radio (Up To Speed - Winnipeg) – February 24, 2009; Metro (Toronto and Edmonton), CITY-TV Breakfast Television (Winnipeg) – February 23, 2009; CBC-TV (Winnipeg) – February 20, 2009 For 5 weeks, throughout February and March, 12 grade 11 and 12 Aboriginal high school students traveled to AFMNet labs across the country to take part in the Verna J. Kirkness “Be a Food Researcher for a Week” internship program.

Good Fruit Grower, Vol. 59 No. 15 – October 1, 2008 AFMNet researchers Louise Nelson and Peter Sholberg are solving the age-old problem of post-harvest fruit loss due to fungus decay. Their research is focused primarily on apples, but with an application to other fruits and vegetables as well.

Nickel Belt News – December 19, 2008; Metro, Calgary – December 16, 2008; Shaw TV, Winnipeg – December 11, 2008; Fredericton Daily Gleaner, Moncton Times and Transcript, Sault Star – December 6, 2008; Sudbury Star, Welland Tribune – December 5, 2008; Brandon Sun, Prince George Citizen, Regina Leader Post – December 4, 2008; GlobalTV.com – December 3, 2008; The Labradorian – December 1, 2008; Central Plains Herald-Leader – November 29, 2008; Portage Daily Graphic – November 28, 2008; Prince Albert Daily Herald – November 27, 2008; 24 Hours (Calgary and Toronto), Brantford Expositor – November 26, 2008 AFMNet announces the launch of the Verna J. Kirkness “Be a 15 | AFMNet Annual Report 08/09

Partners in the Private and Public Sector

Chenomx Edmonton, Alberta

Protein Fractionation Inc. Toronto, Ontario

Provincial Departments and Agencies

CIBC Halifax, Nova Scotia

Senomyx, Inc. San Diego, California

CNKonsulting Montreal, Québec

Specialty Biopolymers Bozeman, Montana

Agri-Food Research and Development Initiative Morris, Manitoba

Agriculture and Agri-Food Canada Ottawa, Ontario

CoaSun Inc. Guelph, Ontario

Syngene Biotek Inc. Victoria, British Columbia

Alberta Agriculture, Food and Rural Development Edmonton, Alberta

Canadian Dairy Commission Ottawa, Ontario

Cobalt Pharmaceuticals Inc. Mississauga, Ontario

Taiyo Kagaku Co., Ltd. Yokkaichi, Japan

Genome British Columbia Vancouver, British Columbia

Canadian Food Inspection Agency Ottawa, Ontario

Cognis La Grange, Illinois

The Coca-Cola Company Beijing, China

Canada Foundation for Innovation Ottawa, Ontario

Danone Vitapole Palaiseau, France

Wrigley Science Institute Chicago, Illinois

Fonds québécois de la recherche sur la nature et les technologies Québec, Québec

Canadian Neutron Beam Centre Chalk River, Ontario

FloraPure BioSciences Inc. Victoria, British Columbia

Others

Federal Departments and Agencies

BC Fruit Growers’ Association Kelowna, British Columbia

Beef Information Centre Food and Consumer Products of Canada Mississauga, Ontario Woodbridge, Ontario Bejo Sheetal Seeds Pvt. Ltd. Fuji Vegetable Oil Inc. Jalna, India White Plains, New York BIOCAP Canada Foundation General Mills Kingston, Ontario Minneapolis, Minnesota Boise State University HFS Food Service Boise, Idaho Burlington, Ontario Canadian Centre for Functional Inimex Pharmaceuticals Inc. Medicine Vancouver, British Columbia Coquitlam, British Columbia Life Science Advisors Carl Zeiss Meditec Chute-à-Blondeau, Ontario Baden-Württemberg, Germany Lipid Nutrition North America CLA Network Channahon, Illinois Red Deer, Alberta Maple Leaf Foods Dairy Farmers of Canada Guelph, Ontario Montreal, Québec/ McLaughlin Consultants Inc. Dietitians of Canada Guelph, Ontario Toronto, Ontario Miller Thomson LLP FEAST Enterprises Guelph, Ontario Oshawa, Ontario Nestlé Research Center Food & Nutrition Delta Davis, California Wageningen, Netherlands Nexia Biotechnologies Inc. Instituto Potosino de Investigación Vaudreuil-Dorion, Québec Científica y Tecnológica (IPICYT) Norland Products Inc. San Luis Potosí, Mexico Cranbury, New Jersey Joint Institute for Food Safety Nutri-Pea Ltd. and Applied Nutrition Portage la Prairie, Manitoba Southport, North Carolina Ocean Nutrition Canada Ltd. Marine Harvest Ingredients Dartmouth, Nova Scotia Hjelmeland, Norway

Bell Alliances International Inc. Mississauga, Ontario

Okanagan Tree Fruit Cooperative Kelowna, British Columbia

Bioriginal Food & Science Corp.

Saskatoon, Saskatchewan

Ontario Pork Guelph, Ontario

BioSyntech Canada Inc. Laval, Québec

Parrheim Foods Portage la Prairie, Manitoba

Burnbrae Farms Ltd. Lyn, Ontario

Pilot Plant Corp.

Saskatoon, Saskatchewan

Cargill Inc. Minneapolis, Minnesota

Polymer Source Inc. Montreal, Québec

Environment Canada Gatineau, Québec Health Canada Nepean, Ontario Indian Institute of Technology Kharagpur Kharagpur, India National Research Council of Canada Ottawa, Ontario Natural Sciences and Engineering Research Council Ottawa, Ontario Networks of Centres of Excellence Ottawa, Ontario Pacific Northwest National Laboratory Richland, Washington Public Health Agency of Canada Ottawa, Ontario United States Department of Agriculture Washington, D.C.

Industry Agropur Longueuil, Québec Ambrilia Biopharma Inc. Verdun, Québec Axcelon Biopolymers Corp.

London, Ontario

Massey University Auckland, New Zealand National Institute of Nutrition and Seafood Research Oslo, Norway National Water Research Institute Burlington, Ontario Richardson Centre for Functional Foods and Nutraceuticals Winnipeg, Manitoba

16 | AFMNet Annual Report 08/09

Ontario Ministry of Agriculture, Food and Rural Affairs Guelph, Ontario Saskatchewan Agriculture and Food Saskatoon, Saskatchewan

Researchers by University Dalhousie University Tom Gill Manfred Jericho Martin Kalmokoff Roger McLeod Allan Paulson Lisbeth Truelstrup Hansen McGill University Marc Fortin Martina Stromvik McMaster University Premysl Bercik Lori Burrows Adam Hitchcock Elena Verdu Queen's University Brian Amsden Ryerson Polytechnic University Dérick Rousseau St. Francis Xavier University David Pink Université de Moncton Chantal Matar Université de Montréal Robert Prud'homme Jean Claude Lavoie (CHU Sainte-Justine) Université de Sherbrooke Stephen Cunnane Université Laval Hélène Jacques André Marette Michel Pézolet Marie-Claude Vohl John Weisnagel University of Alberta Timothy Caulfield John Vederas Donna Vine

University of British Columbia Jiri Frohlich Robert Hancock David Kitts Shuryo Nakai Louise Nelson (Okanagan) University of Guelph Marica Bakovic Anthony Clarke John Dutcher Hermann Eberl Ming Fan Cecil Forsberg Susan Glasauer Chris Gray George Harauz Spencer Henson Bruce Holub John Katsaras Yoshinori Mine University of Lethbridge Brent Selinger University of Manitoba Rotimi Aluko Harold Aukema Trust Beta William Diehl-Jones James Friel Peter Jones Miyoung Suh University of Ontario Institute of Technology Julia Green-Johnson

Lorelei Graham Miller Thomson LLP Guelph, Ontario Joe Hall CIBC Halifax, Nova Scotia Lekh Juneja Taiyo Kagaku Co., Ltd. Yokkaichi, Japan Jean-Paul Laforest Université Laval Québec, Québec Benoît Lamarche Institute of Nutraceuticals and Functional Foods Québec, Québec Jim F. Lawrence Health Canada Ottawa, Ontario David Lineback Joint Institute for Food Safety and Applied Nutrition Southport, North Carolina Stephen Liss University of Guelph Guelph, Ontario Brad McKay HFS Food Service Burlington, Ontario

University of Ottawa David Castle Gary W. Slater

Enikö Megyeri-Lawless Networks of Centres of Excellence Ottawa, Ontario

University of Saskatchewan Darren Korber Nicholas Low Michael Nickerson

Barbara Moffatt University of Waterloo Waterloo, Ontario

University of Toronto Heather Boon Ahmed El-Sohemy Molly Shoichet University of Victoria Conrad Brunk Santosh Misra Patrick von Aderkas University of Waterloo Barbara Moffatt University of Western Ontario Wankei Wan

Board of Directors Larry Milligan, Chair University of Guelph Guelph, Ontario Valerie Bell Bell Alliances International Inc. Mississauga, Ontario J. Bruce German Nestlé Research Center Davis, California

Pamela Moss Networks of Centres of Excellence Ottawa, Ontario Allan Paulson Dalhousie University Halifax, Nova Scotia Gabriel Piette Agriculture and Agri-Food Canada Saint-Hyacinthe, Québec

Ron Woznow Advanced Foods and Materials Network Guelph, Ontario

Rickey Yada Advanced Foods and Materials Network Guelph, Ontario

Rickey Yada Advanced Foods and Materials Network Guelph, Ontario

Huaying Zhang The Coca-Cola Company Beijing, China

International Scientific Advisory Committee David Lineback, Chair Joint Institute for Food Safety and Applied Nutrition Southport, North Carolina Jean-Michel Antoine Danone Vitapole Palaiseau Cedex, France Hongda Chen United States Department of Agriculture Washington, D.C. Tanya Ditschun Senomyx, Inc. La Jolla, California John Finley Louisiana State University Baton Rouge, Louisiana Lynn Frewer Wageningen University Wageningen, Netherlands J. Bruce German University of California Davis, California Kees de Gooijer Food & Nutrition Delta Wageningen, Netherlands Lekh Juneja Taiyo Kagaku Co., Ltd. Yokkaichi, Japan Mary L’Abbé Health Canada Ottawa, Ontario

Ellen Silva General Mills Minneapolis, Minnesota

Michael Lyon Canadian Center for Functional Medicine Coquitlam, British Columbia

Jan Smith Advanced Foods and Materials Network Guelph, Ontario

Allan Paulson Dalhousie University Halifax, Nova Scotia

Emöke Szathmáry University of Manitoba Winnipeg, Manitoba

Jan Smith Advanced Foods and Materials Network Guelph, Ontario

Phyllis Tanaka Food and Consumer Products of Canada Woodbridge, Ontario

Ron Woznow Advanced Foods and Materials Network Guelph, Ontario

17 | AFMNet Annual Report 08/09

Research Management Committee Carl Breckenridge Dalhousie University Halifax, Nova Scotia David Castle University of Ottawa Ottawa, Ontario John Dutcher University of Guelph Guelph, Ontario Ahmed El-Sohemy University of Toronto Toronto, Ontario Constantinos Karatzas CNKonsulting Montreal, Québec Nicholas Low University of Saskatchewan Saskatoon, Saskatchewan Susan Lutz Alberta Agriculture and Food Edmonton, Alberta Enikö Megyeri-Lawless Networks of Centres of Excellence Ottawa, Ontario Larry Milligan University of Guelph Guelph, Ontario Pamela Moss Networks of Centres of Excellence Ottawa, Ontario Allan Paulson Dalhousie University Halifax, Nova Scotia Jan Smith Advanced Foods and Materials Network Guelph, Ontario Michael Smith Health Canada Nepean, Ontario Paul Truscott Advanced Foods and Materials Network Guelph, Ontario Ron Woznow Advanced Foods and Materials Network Guelph, Ontario Rickey Yada Advanced Foods and Materials Network Guelph, Ontario

Advanced Foods and Materials Network

Financial Statements Auditor’s Report To the Members of Advanced Foods and Materials Network

We have audited the statement of financial position of Advanced Foods and Materials Network as at March 31, 2009 and the statements of operations, net assets and cash flows for the year then ended. These financial statements are the responsibility of the organization's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the

financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the organization as at March 31, 2009 and the results of its operations and cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.

Robinson Lott & Brohman LLP, Chartered Accountants Guelph, Ontario April 21, 2009

Statement of Financial Position as at March 31, 2009 Scholarships and Projects Fund

NCE Operating Fund

$

31,971 544,338 0 0 0 567,309

$

0 0 0 0

$

2009 Total

2008 Total

ASSETS CURRENT Cash Short term investments (note 4) Accounts receivable Due from University of Guelph (note 8) Prepaid expenses

$

$

129,621 0 0 1,802,001 2,430 1,934,052

$

$

161,592 544,338 0 1,802,001 2,430 2,510,361

$

$

175,444 504,604 45,995 2,190,154 2,430 2,918,627

LIABILITIES CURRENT Accounts payable and accrued liabilities Targeted RFP payable STAR grant payable

$

27,872 81,000 413,244 522,116

$

27,872 81,000 413,244 522,116

$

70,443 150,000 436,600 657,043

NET ASSETS NEC Operating Fund Scholarships and Projects Fund $

0 576,309 576,309 576,309

$

1,411,936 0 1,411,936 1,934,052

18 | AFMNet Annual Report 08/09

$

1,411,936 576,309 1,988,245 2,510,361

$

1,547,223 714,361 2,261,584 2,918,627

Statement of Net Assests for the Year Ended March 31, 2009

BALANCE, beginning of the year Deficiency of revenues over expenses BALANCE, end of the year

Scholarships and Projects Fund

NCE Operating Fund

$

714,361

$

1,547,223

$

(138,052) 576,309

$

(135,287) 1,411,936

2009 Total

$

2,261,584

$

(273,339) 1,988,245

2008 Total

$

2,325,219

$

(63,635) 2,261,584

Statement of Operations for the Year Ended March 31, 2009 Scholarships and Projects Fund

NCE Operating Fund

$ $

$

2009 Total

2008 Total

REVENUE NCE grant (note 9) Other revenue Interest revenue

0 37,489 18,539 56,028

5,559,000 0 0 5,559,000

$

5,559,000 37,489 18,539 5,615,028

$

5,559,000 85,000 18,720 5,662,720

DIRECT EXPENSES Research grants distributed Scholarships, awards and other grants

0 125,172 125,172

4,289,268 77,000 4,366,268

4,289,268 202,172 4,491,440

4,383,918 139,294 4,523,212

(69,144)

1,192,732

1,123,588

1,139,508

0 7,181 0 0 0 0 0 0 58,548 0 65,729

133,316 21,510 43,538 105,181 2,700 458,363 35,442 5,625 506,954 15,390 1,328,019

133,316 28,691 43,538 105,181 2,700 458,363 35,442 5,625 565,502 15,390 1,393,748

125,837 43,777 9,007 72,453 2,700 401,201 54,388 4,650 441,844 16,293 1,163,143

(134,873)

(135,287)

(270,160)

(23,635)

3,179

0

3,179

40,000

OPERATING EXPENSES Communications Conferences and travel Consulting Commercialization Insurance Meetings Office Professional fees Salaries and benefits Telephone

TOTAL OPERATING DEFICIENCY OF REVENUE OVER EXPENSES for the year OTHER EXPENSES Loss on Investment (note 5)

TOTAL DEFICIENCY OF REVENUE OVER EXPENSES for the year

$

(138,052)

$

(135,287)

19 | AFMNet Annual Report 08/09

$

(273,339)

$

(63,635)

Statement of Cash Flows for the Year Ended March 31, 2009 2009 Total

2008 Total

CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Deficiency of revenue over expenses for the year

$

Changes in non-cash working capital Short term investment Due from University of Guelph Accounts receivable Accounts payable and accrued liabilities Targeted RFP payable STAR grant payable

(273,339)

$

(63,635)

(39,734) 388,153 45,995 (42,571) (69,000) (23,356) 259,487 (13,852)

140,674 (83,374) (45,995) 62,373 150,000 (179,900) 43,778 (19,857)

0

30,000

NET (DECREASE) INCREASE IN CASH for the year

(13,852)

10,144

NET CASH, beginning of year

175,444

165,300

CASH PROVIDED BY INVESTING ACTIVITIES Decrease in investments

NET CASH, end of year

$

20 | AFMNet Annual Report 08/09

161,592

$

175,444

Notes to the Financial Statements for the Year Ended

March 31, 2009 1. NATURE OF ORGANIZATION The purpose of the Advanced Foods and Materials Network is to bring together researchers in law, engineering and the natural, social and health sciences with the private and public sectors, to advance food and biomaterials research. The Network is a nonprofit organization incorporated under the laws of Ontario. The network is hosted by the University of Guelph. As part of the NetworkHost Agreement, the University is responsible for providing suitable space to house the Administrative Centre of the Network; receiving and distributing funds to participating institutions as approved by the Board of Directors; providing accounting and financial reporting for NCE funds and contributions to the Network from other sources as required by NCE Directorate; and providing suitable support to assist the Scientific Director in his or her network responsibilities.

In addition, as part of the agreement, the University of Guelph employs one fulltime Administrative Officer and one parttime Financial Manager, seconded to AFMNet. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) FUND ACCOUNTING The Network follows the restricted fund method of accounting for contributions.

The Scholarships and Projects Fund accounts for the Network's scholarship advancements, research activities and other general activities.

This fund reports unrestricted resources and restricted grants other than the NCE grant.

The NCE Operating Fund is a restricted fund that reports only restricted resources that are to be used according to the Network's agreement with Networks of Centres of Excellence. (b) SHORT TERM INVESTMENTS Investments are classified as heldfortrading and are recorded at fair value.

restricted contributions are recognized as revenue 4. SHORT TERM INVESTMENTS of the appropriate restricted fund.

Investments have been recorded at market value.

The balance consists of the following: Unrestricted contributions are recognized as Bank of Montreal Bond revenue of the Scholarships and Projects Fund in Discount Note, the year received or receivable if the amount to be due May 2009 $ 100,930 received can be reasonably estimated and 3.8% Manulife Bank GIC, collection is reasonably assured. due December 2009 150,000 4.0% Advisor's (d) INCOME TAXES Advantage Trust GIC, The organization is exempt from income tax due December 2009 293,408 under Section 149(1)(e) of the Income Tax Act. $ 544,338 (e) USE OF ESTIMATES The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates.

3. FINANCIAL INSTRUMENTS Credit risk management The organization's financial instruments consists of cash, temporary investments, the amount due from the University of Guelph, accounts payable and accrued liabilities. Unless otherwise noted, it is management's opinion that the organization is not exposed to significant interest, currency or credit risks arising from these financial instruments.

5. LOSS ON INVESTMENT In prior years the organization invested in a 7% Florapure Biosciences Inc. convertible debenture.

It was determined in 2008 that the fair market value of the investment was less than cost and a loss on investment was recorded accordingly. In 2009 the investment had no value and the remaining investment balance was recorded as a loss.

6. COMPARATIVE FIGURES Certain figures presented for comparative purposes have been reclassified to conform to the current year's presentation.

7. COMMITMENTS The Network has entered into research contracts and is committed under those contracts to provide funding of $6,800,000 over two years.

Fiscal 2011 is the final year of the contract. The funding of existing research projects and potential research projects are reviewed in year two and changes are made when deemed necessary by Fair value of financial assets and financial the Research Management Committee. liabilities The carrying values of cash, the amount due from 8. UNIVERSITY OF GUELPH the University of Guelph, accounts payable and University of Guelph holds research funds in trust accrued liabilities approximate their fair value due for the Network. All funds held at the University of to the relatively short period to maturity of these Guelph and carried forward at March 31, 2009 items. have been committed to Discovery Project Funding 2009-2011 (see Note 7).

9. ECONOMIC DEPENDENCE The Network receives the majority of their funding through a grant from Networks of Centres of Excellence. This agreement ends in fiscal 2010.

(c) REVENUE RECOGNITION Restricted contributions related to general activities are recognized as revenue of the Scholarships and Projects Fund in the year in which the related expenses are incurred. All other

21 | AFMNet Annual Report 08/09

Acknowledgements

Advanced Foods and Materials Network Visit the AFMNet website at www.afmnet.ca.

Address correspondence to: Louise Jessup, Communications Manager Advanced Foods and Materials Network 150 Research Lane, Suite 215 Guelph, Ontario, Canada N1G 4T2 Phone: 519-822-6253 Fax: 519-824-8453 Email: louise.jessup@afmnet.ca AFMNet thanks its host, the University of Guelph, for their continued generous support.

Executive Editors: Ron Woznow Rickey Y. Yada Writer and Copy Editor: Louise Jessup Design: Teressa van Vliet, 端berTONIC:GraphicPOP Advanced Foods and Materials Network Staff Paula Allen, Guelph Wellness Project Coordinator Tom Dowler, Business Development Analyst Phil Guinchard, Information Technology Manager Louise Jessup, Communications Manager Kelly Krashinsky, Research Manager Allan Paulson, Associate Chief Research Officer Monique Poirier, Executive Assistant Jan Smith, Network Operations/Fi nancial Manager Gabriela Soraggi, Executive Assistant Ron Woznow, Chief Executive Officer Rickey Yada, Chief Research Officer

AFMNet is supported by the Government of Canada through a Networks of Centres of Excellence program.

22 | AFMNet Annual Report 08/09