Dr. Fred Sancilio reports

LOBE SCIENCES LTD. ANNOUNCES PRIVATE PLACEMENT TO SUPPORT DRUG DEVELOPMENT OF NOVEL CONJUGATED PSILOCIN

Lobe Sciences Ltd. has arranged a non-brokered private placement of preferred shares in the capital of Lobe Sciences' newly created subsidiary, Cynaptec Pharmaceuticals Inc., for an initial gross proceeds of $6-million (U.S.). In connection with the private placement, the investor holds an exclusive option to purchase additional preferred shares for gross proceeds of up to $20-million (U.S.). The total gross proceeds, if the option is fully exercised, would total $26-million (U.S.).

Cynaptec is a newly created private Delaware corporation that will own and develop the company's novel drug development candidate, Conjugated Psilocin. Lobe Sciences previously announced its intention to spin out Conjugated Psilocin to Alera Pharma Inc., another subsidiary of the company.

Lobe has now successfully achieved the spinout of Conjugated Psilocin to Cynaptec and proceeds from the private placement secure financing for Conjugated Psilocin to be advanced in accordance with its development plan.

Accordingly, Lobe Sciences has transferred to Cynaptec: (i) worldwide patents, applications, know-how and other intellectual property (IP) covering technology related to Conjugated Psilocin; and (ii) related commercial contracts. In consideration for the transferred IP, Cynaptec issued to Lobe Sciences 6,399,900 shares of common stock of Cynaptec. Furthermore, Cynaptec and Lobe Sciences entered into a shared services agreement pursuant to which Lobe Sciences will provide to Cynaptec certain administrative services, regulatory affairs services and financial services.

Pursuant to the private placement, Cynaptec issued to the investor 3.6 million shares of Series A-1 preferred stock (par value of one U.S. cent per share) at a purchase price of $1.66 (U.S.) per share. The preferred shares: (i) are entitled to a dividend if and when declared on the common stock; (ii) have preference to the common stock as it relates to the proceeds from any liquidation, dissolution or winding up of Cynaptec; (iii) are entitled to price-based anti-dilution adjustment protection; and (iv) are initially entitled to exclusively vote for two of the five members of the board of directors of Cynaptec as well as other rights generally accorded to preferred stockholders in an early-stage financing. Immediately following the private placement, Lobe Sciences owns 64 per cent of the issued and outstanding shares of capital stock of Cynaptec. If the option is fully exercised by the investor, the investor would own 68 per cent of the issued and outstanding shares of capital stock of Cynaptec. The aforementioned option is exercisable by the investor within 120 days following: (i) Cyntaptec's completion of preclinical and phase 1 single ascending dose (SAD) programs as well as a proof-of-concept (POC) study to determine if Conjugated Psilocin impacts headache frequency, intensity or duration; and (ii) the investor's receipt of final study reports for the SAD programs and the POC for chronic cluster headaches and the investigational new drug (IND) enabling studies. The proceeds of the private placement will be used to finance additional preclinical research (including IND enabling studies) and phase 1 and phase 2a clinical studies for Cynaptec's proprietary novel Conjugated Psilocin. The funds from the additional option of up to $20-million (U.S.) would be used to support the phase 3 clinical program in the orphan indication for chronic cluster headaches.

About Lobe Sciences Ltd.

Lobe Sciences is a biopharmaceutical company focused on using lipid technology to develop innovative treatments for orphan and rare diseases. Lobe Sciences commercializes Altemia MF, a medical food designed to manage deficiencies commonly found in sickle cell disease. Additionally, through Cynaptec, Lobe Sciences retains an interest in developing Conjugated Psilocin in neurology and psychiatric indications. Alera Pharma remains a wholly owned subsidiary of the company that Lobe Sciences may elect to utilize for future activity unrelated to Conjugated Psilocin.

About Cynaptec Pharmaceuticals Inc.

Cynaptec is a biopharmaceutical company dedicated to developing innovative therapies for neurological and psychiatric disorders. Cynaptec's initial development program is focused on the use of its proprietary Conjugated Psilocin compound for treatment of the significant unmet medical needs of patients with chronic cluster headaches, with an additional preliminary proof of concept to assess potential utility for substance use disorders.

About Conjugated Psilocin

Conjugated Psilocin is a novel, patented, oral, stable analogue of psilocin, the active metabolite of psilocybin (a pro-drug), designed to enhance bioavailability and therapeutic efficacy, which has been identified as having therapeutic potential in a variety of neurological conditions. Whereas conventional psilocin is an unstable compound that has been challenging for the industry to develop as a standalone pharmaceutical, Conjugated Psilocin's stability and bioavailability profile and associated safety and efficacy signals suggest the potential for prescription drug development in a variety of neurological and psychiatric indications.

We seek Safe Harbor.