Dr. Frederick Sancilio reports

LOBE SCIENCES REPORTS FY2025 WITH A STRONGER BALANCE SHEET AND SHARPENED STRATEGY

Lobe Sciences Ltd. has released its audited financial results for the fiscal year ended Aug. 31, 2025 (FY 2025), and provided an update on operational progress achieved since the company's leadership transition and board renewal beginning in late 2024.

Dr. Frederick D. Sancilio, chairman and chief executive officer of Lobe Sciences, stated: "Fiscal 2025 was about strengthening Lobe's balance sheet and funding our core assets responsibly. Advancing L-130 through Cynaptec Pharmaceuticals Inc. allowed us to secure development capital while limiting dilution at Lobe, which we believe better aligns capital with asset value."

Financial highlights: FY 2025

In FY 2025, Lobe improved its balance sheet position and liquidity profile:

• Cash increased to $5,854,118 on Aug. 31, 2025, compared with $237,772 on Aug. 31, 2024.
• Working capital improved to a surplus of $5,163,526, compared with a deficit of $2,008,849 on Aug. 31, 2024.
• The current portion of the convertible notes was eliminated on Aug. 31, 2025, as compared with $641,374 on Aug. 31, 2024.
• Derivative liability decreased to $205,105 on Aug. 31, 2025, from $603,724 on Aug. 31, 2024.
• Short-term investments of $1,686,688 were held on Aug. 31, 2025 (none reported on Aug. 31, 2024).

Loss per share was three cents for fiscal 2025, compared with four cents for fiscal 2024, despite significant balance sheet restructuring and increased investment in corporate infrastructure and development activities. For FY 2025, the company reported a net loss attributed to the parent company of $4,861,611 (FY 2024: $4,420,727).

Management believes the strengthened working capital position reduces liquidity risk and improves the company's ability to pursue business development initiatives.

Progress since leadership transition

Following the leadership transition and board renewal in late 2024, Lobe implemented a broad operational and financial stabilization program aimed at strengthening governance and disclosure, reducing legacy balance sheet complexity, and positioning the company to pursue disciplined financing and value-focused business development opportunities.

In FY 2025, this transformation translated into a materially improved liquidity position and a clearer corporate structure focused on two core strategic development programs advanced through subsidiaries, as described below.

Product development program summary

Lobe is advancing two product development programs through its subsidiaries:

1. Cynaptec Pharmaceuticals Inc. (64 per cent owned by Lobe) -- L-130 for chronic cluster headache (lead program) and substance use disorder, with other indications under strategic review;
2. Altemia Inc. -- S-100, an early-stage drug product candidate for sickle cell disease.

In addition to these two continuing programs, the company continues to evaluate other strategic opportunities consistent with its business strategy and leverage its development expertise.

Cynaptec Pharmaceuticals: L-130 -- a CNS therapeutic

L-130 is a novel, patented, oral, stable analog of psilocin, the active metabolite of the pro-drug psilocybin, designed to enhance bioavailability and therapeutic efficacy. Psilocin has been identified as having therapeutic potential in a variety of neurological conditions. The lead indication for L-130 is chronic cluster headache, a neurological condition with limited treatment options and significant unmet clinical need.

As described in the company's MD&A (management's discussion and analysis), a phase 1a study in healthy volunteers and supporting preclinical work have been completed internationally under applicable standards, and the company is continuing to advance the development plan and partnership strategy in line with U.S. Food and Drug Administration (FDA) guidance received in its pre-IND (investigational new drug) correspondence.

Altemia: S-100 -- sickle cell disease drug product candidate

During FY 2025, Lobe refined its sickle cell disease strategy to prioritize S-100, an early-stage therapeutic candidate intended to address aspects of the underlying pathology of the disease. S-100 is based on a patented drug delivery platform and comprises a lipid-based formulation primarily containing docosahexaenoic acid and eicosapentaenoic acid in triglyceride form, combined with pharmaceutical-grade surfactants.

The company is also maintaining limited, preliminary commercialization activities related to a proprietary medical food intended to address nutritional deficiencies commonly observed in patients with sickle cell disease. These activities are focused primarily on assessing third party reimbursement pathways. There can be no assurance that reimbursement will be obtained or that the product will be commercially viable and the company may elect to pursue alternative strategies or discontinue commercialization efforts if reimbursement is not achieved.

Potential value-creation strategy

The company's strategy is focused on advancing the intrinsic value of its existing research and development assets. During fiscal 2025, Lobe's market capitalization remained below $5.0-million, making parent-level financings highly dilutive. In response, the company transferred its L-130 program into its wholly owned subsidiary, Cynaptec Pharmaceuticals, and completed a subsidiary-level financing that raised $8.46-million at a $22.56-million postmoney valuation, while retaining a 64-per-cent ownership interest. Management believes this approach supports continued development of L-130, limits dilution at the parent level and preserves long-term shareholder participation.

Outlook for FY 2026

In FY 2026, the company expects to build on progress made in FY 2025 by continuing to strengthen its corporate infrastructure, advance its core development programs through disciplined milestone execution and evaluate strategic opportunities aligned with shareholder interests. The timing and outcome of these initiatives will depend on market conditions, financing availability, regulatory considerations and other factors.

About Lobe Sciences Ltd.

Lobe Sciences is a biopharmaceutical company advancing programs in rare and orphan diseases with unmet medical needs. The company is pursuing development through its subsidiaries, including a majority interest in Cynaptec Pharmaceuticals and wholly owned subsidiary Altemia. Lobe utilizes a global network of contract pharmaceutical service providers to conduct research and development activities under Lobe's direct supervision.

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 L-130 (psilocin mucate) compound for treatment of the significant unmet medical needs of patients with chronic cluster headache, with an additional preliminary proof-of-concept to assess potential utility for substance use disorders. Cynaptec is 64 per cent owned by Lobe.

About L-130 (psilocin mucate)

L-130 is a novel, patented, oral, stable analog of psilocin, the active metabolite of the prodrugpsilocybin, 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 stand-alone pharmaceutical, L-130 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.