Mr. Philip Young reports

LOBE SCIENCES ANNOUNCES ADDITIONAL DETAILS REGARDING THE ACQUISITION OF ALTEMIA & COMPANY

As a result of a review by the B.C. Securities Commission, Lobe Sciences Ltd. is issuing the following press release to clarify its disclosure with respect to the acquisition of Altemia & Company LLC on April 18, 2023. The company has also refiled the material change report with respect to the Altemia acquisition to reflect the information presented in this press release.

Philip J. Young, chairman and chief executive officer of the company, stated: "Starting in the second half of 2023, we will launch our first commercial product, a medical food called Altemia, for the management of [sickle cell disease]. This product has been well studied in human clinical trials. It is a proprietary, patent-pending formulation based on decades of research, and will add commercial revenue this year and beyond. By targeting the 55 major SCD clinics in the United States, we will be able to efficiently provide support and education for clinicians and other health care providers charged with addressing this vulnerable population. As we prepare for launch and commercialization, I will be able to call upon my previous successes launching and selling orphan drugs in specialty markets. Altemia will be positioned as a cost-effective medical food option for patients and payers seeking alternatives to drug products with significant side effects. We will be announcing further information related to our commercial plans shortly. In addition to Altemia, we have acquired a clinical-stage asset, SAN100, developed as a drug alternative, for the treatment of SCD uniquely in children. This indication may qualify for the pediatric priority review voucher."

Maghsoud Dariani, chief science officer of the company, added: "SCD affects approximately 100,000 patients in the United States and millions more across the globe. Altemia must be used under the direct care of medical professionals who are required to write a prescription for the product. Obtaining safe and effective treatments to lessen the debilitating effects of this disease is a constant struggle for patients globally. We believe that Altemia and our follow-on prescription product, SAN100, will become an important component in the daily lives of patients with SCD around the world."

"I began research in the fundamentals of SCD over 12 years ago and believe that the disease has been misunderstood," said Dr. Sancilio, founder and president of Altemia and Company LLC.

He went on to say: "During the last several years, our team began to realize that SCD could be managed with consumption of docosahexaenoic acid ethyl ester, but due to its lack of bioavailability, consumption of amounts that could affect SCD were nearly impossible. It would require a patient to consume up to 10 huge soft gelatin capsules of prescription products each day to match a single dose of Altemia. The search for a superbioavailable form of this fatty acid led to a technology using a natural emulsification process that was adapted for this new product. By using this formulation and triglyceride esters instead of the ethyl ester, we can provide the equivalent of 10 or more soft gels in one packet of Altemia. Clinical trials were initiated in 2021 and completed recently showing Altemia to significantly reduce C-reactive protein in patients after the first month of intervention. C-reactive protein is a biomarker related to inflammation and, when controlled, may impart a positive effect for SCD sufferers. This led to patent filings and, soon after, licence agreements with distributors in Europe and elsewhere."

He went on to say: "I am very happy to complete this transaction with Mr. Young and the Lobe team. Our group has invested a lot of time and several million dollars to bring us to the commercial launch phase of our first product. It's great to know that Mr. Young will be managing the sales and distribution of this product, allowing our development team to focus on its own strength."

Altemia was designed with patented natural emulsion technology (NET) allowing consistent and reliable fatty acid bioavailability. Altemia is simple to administer: a small daily packet of a great-tasting cream is taken by mouth or mixed with food daily.

Mr. Young concluded: "This transaction will transform our company into a revenue-generating biotech company committed to treating orphan diseases separating Lobe from the myriad of clinical-stage companies in North America and Europe. We will be able to use the revenue from the SCD sales to fund ongoing clinical activities with L-130 and L-131. I look forward to providing updates as we move forward with the planning and launch of Altemia for the treatment of sickle cell disease."

Terms of the agreement

Pursuant to the share exchange agreement, Altemia shareholders will receive total consideration of $3.8-million through the issuance on a pro rata basis of an aggregate of 76 million common shares of Lobe Sciences at a deemed issue price of five cents per Lobe Sciences share. All Lobe Sciences shares to be issued will be subject to contractual restrictions on transfer, pursuant to which 25 per cent of the Lobe Sciences shares issued will be transferable on the closing of the transaction, a further 25 per cent on delivery of inventory to a Lobe Sciences designated storage facility, 25 per cent on the first commercial sale allowing the trademark validation and 25 per cent on successful completion of SAN100 tech transfer documentation (batch records for research and development batch). Samples of SAN100 are delivered to Lobe Sciences. In addition, Lobe Sciences will issue three million warrants contingent on Altemia achieving $20-million in annual sales. Pricing of these warrants will be determined in accordance with the relevant Canadian Securities Exchange policy.

Altemia holds a licensing agreement with Sancilio LLC, which grants Altemia a worldwide, non-transferable, non-sublicensable, exclusive right to make, have made, use, offer to sell, sell and import licensed products which utilize a patent used in the formulation of Altemia over the life of the underlying patent, which expires on March 11, 2041. Pursuant to the licensing agreement, Lobe Sciences will pay a tiered royalty on annual sales. In addition, the company will pay Sancilio 5 per cent of the net sales revenue received for the sale of a pediatric priority review voucher for the approval of its SCD prescription drug for the pediatric orphan indication. Sancilio is owned by Fred Sancilio and Alex Sancilio, who are also owners of Clearway Global LLC, which is leading the company's global regulatory and development strategy and its implementation.

Pursuant to the share exchange agreement, Altemia shall appoint one member to the company's board of directors. It is expected that Fred Sancilio will join the company's board of directors in the coming weeks.

Incentive award grants

The company has granted stock options to acquire a total of 5.8 million common shares of the company to directors, officers and consultants of the company. The options are exercisable at a price of five cents per share and expire three years from the date of grant. The options are subject to various vesting provisions where 50 per cent of the options granted vest immediately on the grant date and 50 per cent of the options vest on June 30, 2023. The company also issued one million deferred share units to a director of the company and 4.8 million restricted share units to officers of the company. Fifty per cent of the DSUs and RSUs vest on each of June 30, 2024, and June 30, 2025.

About Altemia

Altemia is a trademark registered to Altemia and Company of Stuart, Fla. Altemia is the brand name of a patent-pending oral emulsion consisting of a proprietary mixture of polyunsaturated fatty acid triglyceride esters clinically evaluated to reduce inflammation associated in adults with SCD. The term medical food, as defined in Section 5(b) of the Orphan Drug Act (21 USC 360ee (b)(3)) is "a food which is formulated to be consumed under the supervision of a physician and which is intended for the specific dietary management of a disease or condition for which distinctive nutritional requirements, based on recognized scientific principles, are established by medical evaluation." SCD is among a few inborn errors of metabolism specifically named in legislation that qualifies as treatable with medical foods. This product should not be confused with a previous product development program with a similar name. That program also called Altemia (SC411) was the project name used during the development of a drug product to treat SCD in children.

About sickle cell disease

SCD is a group of hereditary red blood cell disorders. Healthy red blood cells are round, and they move through small blood vessels to carry oxygen to all parts of the body. In someone who has SCD, the red blood cells (RBC) become inflamed under certain stress conditions resulting in, among other symptoms, an increase of C-reactive protein (a biomarker for SCD). Inflammation causes the RBC's membrane to become hard and sticky, and this tends to slow or even block blood flow in the blood vessels (capillaries) of the limbs and organs. This slowing of the blood cells causes a cascade of events that results in pain and a vaso-occlusive event (VOC). The sickle cells also die earlier than normal red blood cells, and the bone marrow cannot make enough new red blood cells to replenish the dying ones, which causes a constant shortage of red blood cells called anemia. Blocked blood flow may cause pain and other serious problems such as infection, acute chest syndrome and stroke. Populations that suffer from SCD have a shortened lifespan. According to the CDC, it is estimated that SCD affects approximately 100,000 individuals in the United States, occurring among approximately one out of every 500 black or African American births and one out of every 36,000 Hispanic American births. A similar number of patients are affected in Europe. There are millions of patients in the Middle East, Africa and India. Lobe Sciences plans to sell the product globally, either directly or through partners.

About Lobe Sciences Ltd.

Lobe Sciences is a biopharmaceutical company focused on developing patient-friendly, practical psychedelic medicines. The company, through collaborations with industry-leading partners, is engaged in drug research and development using subhallucinatory doses of psychedelic compounds and the development of innovative devices and delivery mechanisms to improve mental health and wellness. Each of its new chemical entities, L-130 and L-131, is being developed to address unmet medical needs in neurological therapeutic applications.

We seek Safe Harbor.