Dr. Fred Sancilio reports

LOBE SCIENCES PROVIDES CORPORATE UPDATE

Lobe Sciences Ltd. is providing a corporate update with respect to certain recent transactions. The company wishes to provide notice of the following transactions:

• On March 14, 2024, the company issued $678,450 ($500,000 (U.S.)) principal amount of convertible notes. The notes were secured against the company's intellectual property. The security interest has since been released. The notes bear interest at 10 per cent per annum and mature on March 15, 2027. The notes are convertible into common shares in the capital of the company upon listing of the common shares on the Australian Securities Exchange or another recognized securities exchange in the United States or Australia prior to maturity at any initial public offering price. The company and the holder of the notes have agreed to amend the notes to comply with the policies of the Canadian Securities Exchange and to provide that the conversion price shall be equal to the lowest price permitted by the policies of the CSE.
• On April 4, 2024, the company issued 16,424,220 common shares in settlement of $318,782 owing by the company to Clearway Global LLC, a related party.
• On May 15, 2024, the company issued $1,462,716 ($1,072,609 (U.S.)) principal amount of convertible notes in satisfaction of outstanding accounts payable. The settlement notes bear interest at 10 per cent per annum and mature on May 15, 2027. The settlement notes are convertible upon a change of control or upon listing of the common shares on a designated stock exchange prior to maturity at the greater of: (i) 2.4 cents; and (ii) the initial public offering share price, if applicable; provided that in no case shall the conversion price be less than the minimum price permitted under applicable law or the rules of any exchange on which the common shares are then listed for trading, which shall be not less than five cents while the common shares are listed on the CSE, without the prior consent of the CSE.
• Effective Sept. 1, 2024, the company entered into a compensation agreement with each director of the company, providing for the issuance of seven million common shares to each director. One-third of the compensation shares were issued upon signing of the compensation agreements, one-third of the compensation shares are to be issued on the one-year anniversary of signing the compensation agreements and the remaining compensation shares are to be issued on the two-year anniversary of signing the compensation agreements.
• On Nov. 13, 2024, the company issued an aggregate of 10,828,400 common shares to a former director and a current officer of Clearway in settlement of $246,572 owing to such person.
• On Dec. 12, 2024, the company issued a convertible note to a private investor for gross proceeds of $250,000 (U.S.). The convertible note bears interest at 10 per cent per annum and matures on Dec. 12, 2027. The note is convertible into common shares upon completion of a transaction as defined in the convertible note agreement at a 30-per-cent discount to the prevailing market price at the time of conversion. The company and the holder of the convertible note intend to amend the convertible note to comply with the policies of the CSE and to provide that the conversion price shall be equal to the lowest price permitted by the policies of the CSE.
• On Dec. 13, 2024, the company issued an aggregate of 850,000 common shares to a former officer and director in settlement of $17,000 owing to such person.
• On Jan. 29, 2025, the company issued an aggregate of 9,413,333 common shares to current officers and directors of the company in settlement of $188,267 owing to such persons.
• On Jan. 31, 2025, the company issued 3.5 million restricted share units to an officer of one of the company's subsidiaries, with one-third of such restricted share units vesting on issuance, and one-third vesting on each of the first and second anniversaries of issuance.

In connection with the above transactions, an aggregate of 36,015,952 common shares and 3.5 million restricted share units were issued to related parties (within the meaning of Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions)), and such issuances were considered related-party transactions for the purposes of MI 61-101. Such related-party transactions are exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the securities issued to the related parties, nor the consideration paid by the related parties exceeded 25 per cent of the company's market capitalization.

The company also wishes to provide the following corporate update on its current operations:

• The company continues to make significant progress in its businesses, notably Conjugated Psilocin and Altemia. As previously reported, the company has obtained two patents issued by the U.S. patent office for psilocin mucate (Conjugated Psilocin). The company has also filed patent applications in multiple key international pharmaceutical markets as a follow-up step.
• The company published the results of a key clinical study: "Phase 1, First-in-Man Clinical Trial and Pharmacokinetics of Psilocin Mucate (L-130)" in the peer reviewed Journal of Clinical Pharmacology and Therapeutics.
• The company has received preinvestigational new drug feedback from the Food and Drug Administration. This key consultative step with the U.S. regulator allows the company to confirm the steps necessary to complete the preclinical program to file and obtain an IND to initiate human clinical trials. The company is actively finalizing the development plan based upon this feedback.

About Lobe Sciences Ltd.

Lobe Sciences is a commercial-stage biotechnology company focused on using lipid technology developing solutions for unmet medical needs. Lobe Sciences is developing patented drug candidates to treat chronic cluster headache and innovative medical foods to address deficiencies commonly seen in sickle cell disease (Altemia).

We seek Safe Harbor.