Mr. Vito Sanzone reports

ELEMENT NUTRITIONAL SCIENCES INC. REACHES NEW IP LICENSING AGREEMENT

Further to the news release of Element Nutritional Sciences Inc. dated Sept. 11, 2023, a settlement has been reached between Eight IP LLC, the company and the company's subsidiary Element Nutrition Inc. (ENI) in connection with the claims relating to the company's use of the patented formula included in its Rejuvenate and Promino beverages. All dollar values herein are in U.S. dollars.

Vito Sanzone, the company's chief executive officer, stated: "The market opportunity to improve muscle health through superior protein remains significant. With the support of Eight IP, we have reached a new IP licensing agreement and are now positioned to turn our attention to developing our brands. We have a new leadership team and have cultivated relationships with investor, marketing and strategic partners, who all see the potential for Rejuvenate Muscle Health and Promino over the long term. Today, we see a clear path towards reaching our goals and we look forward to providing more updates in the near term."

The settlement

The company licenses Eight IP's U.S. patent No. 9,364,463. This patent was the result of over $20-million in financing, 27 clinical trials and over 20 years of research to discover the optimal ratio and key amounts of nutrients required to stimulate muscle protein synthesis. Clinical trials have demonstrated the formulation underlying this patent can increase muscle gain, increase muscle protein synthesis and strengthen recovery. The patent is critical in the formulation of the company's branded muscle health products Rejuvenate Muscle Health and Promino.

As a part of the settlement:

• Eight IP and ENI has entered into a settlement agreement and release in which ENI has agreed to pay Eight IP $300,000 within 90 days of the execution of the settlement agreement and release from the proceeds of a $1.5-million financing to be undertaken by ENI or its affiliates within the same 90 days. Further details in respect of proposed financing terms will follow.
• Eight IP and the company have agreed to permit Eight IP to enter a consent judgement in the amount of $1-million if the company is unable to raise the entire $1.5-million from the financing or complete the payment of the settlement amount within the prescribed time period.
• ENI has provided Eight IP with a revolving promissory note for the settlement amount payable under the terms of the settlement agreement and release.
• Eight IP and the company have entered into a pledge agreement in which the company pledges all of the shares of ENI, Hammock Pharmaceuticals Inc., Element Nutrition Ltd. and JAKTRX Inc. to Eight IP in the event of default of the promissory note.
• The company's former licence in respect of the patent is terminated, and replaced with a new licence agreement whereby Eight IP has granted ENI a 90-day non-exclusive licence to use the patent, to be extended provided ENI and the company comply with their obligations noted above and therein.
• Eight IP and ENI will within five business days of the execution of the settlement agreement and release jointly file a motion to stay the current claim, subject only to Eight IP's rights to file the consent judgment in the event of default by the company or ENI.
• The company has provided a guarantee to Eight IP to guarantee ENI's performance, observance and payment for all present and future indebtedness, liability and obligations pursuant to the promissory note and settlement agreement and release between Eight IP and ENI.

We seek Safe Harbor.