Dr. Frederick Sancilio reports

LOBE SCIENCES DIRECTORS AND MANAGEMENT INCREASE EQUITY OWNERSHIP THROUGH SETTLEMENT OF ACCRUED FEES BY THE ISSUANCE OF COMMON SHARES

Lobe Sciences Ltd.'s directors and officers have settled $1,372,761.20 in accrued management and director fees through the issuance of 12,749,643 common shares of the company at a deemed price of 11 cents per share.

• Directors and management elected to receive restricted equity in place of accrued fees payable, thereby increasing ownership and further aligning with shareholders;
• The Canadian Securities Exchange has accepted the share issuance, allowing the company to complete the settlement;
• Company remains well positioned with $4.96-million in cash and short-term investments as of its most recent quarter ended Feb. 28, 2026;
• Subsidiary R&D (research and development) programs remain on track and on budget, with continued derisking through Lobe's disciplined development model.

Management and the board elected to receive equity in place of cash compensation to further align with shareholders. The Canadian Securities Exchange has accepted the issuance of the settlement shares. The shares will be subject to a four-month hold period from the date of issuance in accordance with applicable Canadian securities laws, in addition to any other restrictions that may apply under the securities laws of jurisdictions outside Canada.

Lobe has continued to increase investment in its clinical development programs. Research and development expenditures reached $2.12-million in the first half of fiscal 2026, compared with approximately $20,000 in the prior-year period, reflecting the company's transition from preclinical preparation to active clinical execution across its core programs. Following completion of the share settlement, management and directors' ownership of the company exceeds 40 per cent.

Lobe's financial position remains strong, with $4.96-million in cash and short-term investments including cash held in its subsidiaries, as of the end of its most recent quarter, per its financial statements, as filed on SEDAR+. The company's subsidiary R&D (research and development) programs remain on track and on budget, with continued progress intended to derisk the assets through clinical, regulatory and financing milestones. The L-130 therapeutic program is operated through Cynaptec Pharmaceuticals Inc., a majority-owned subsidiary of Lobe. The S-100 sickle cell disease program is operated through Applied Lipid Technologies Inc., a wholly owned subsidiary of Lobe.

Lobe's subsidiary model is designed to finance clinical programs at the subsidiary level where appropriate, allowing Lobe shareholders to benefit from asset advancement while limiting dilution at the parent-company level. Cynaptec previously raised $6-million (U.S.) to finance the L-130 program without the issuance of additional Lobe common shares.

Dr. Frederick D. Sancilio, PhD, chairman and chief executive officer of Lobe Sciences, said: "Our decision to receive restricted shares reflects a simple view: we believe in Lobe, its programs and its strategy. The board and management chose restricted equity because we see meaningful value in increasing our ownership at this stage. Our focus remains on disciplined execution and building value for all shareholders."

"I believe the company's development platform and subsidiary model provide a disciplined path for advancing valuable pharmaceutical assets. Electing to receive equity reflects confidence in that plan and in the opportunity represented by the company's subsidiary programs," said Dr. Harry Jacobson, director of Lobe Sciences and interim chief executive officer of Applied Lipid Technologies Inc.

Mr. Wesley Ramjeet, director of Lobe Sciences and chair of the audit committee, said: "This settlement increases management and director ownership while preserving flexibility for the company. From a governance and capital allocation perspective, the decision reflects confidence in Lobe's business plan and reinforces alignment between the board, management and shareholders."

MI 61-101 matters

The debt settlement is considered to be a related party transaction as defined under Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. The company is exempt from the formal valuation requirement in Section 5.4 of MI 61-101 in reliance on Section 5.5(b) of MI 61-101, as the company is not listed on a specified market within the meaning of MI 61-101. Additionally, the debt settlement is exempt from the minority approval requirement in Section 5.6 of MI 61-101 in reliance on Section 5.7(1)(a) of MI 61-101 insofar as neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the settlement shares issuable to related parties exceeds 25 per cent of the company's market capitalization.

Cynaptec Pharmaceuticals Inc.: L-130 -- CNS therapeutic program

L-130 (psilocin mucate) is a patented, highly bioavailable, orally administered new chemical entity (NCE) designed as a stabilized form of psilocin, the active metabolite of psilocybin. The NCE is designed to provide enhanced stability, improved bioavailability and more consistent circulating levels of psilocin, supporting reliable systemic exposure relative to traditional psilocybin-based approaches. Development of L-130 is being conducted by Cynaptec Pharmaceuticals Inc., a subsidiary of the company in which Lobe holds a 64-per-cent ownership interest.

L-130 is initially being developed for the treatment of chronic cluster headache, a severe neurological condition with limited treatment options. The program is advancing in alignment with guidance received from the United States Food and Drug Administration following pre-IND interactions. Additional applications of L-130 are also progressing forward, consistent with the timeline provided on the company's website.

Applied Lipid Therapeutics LLC: S-100 -- sickle cell disease program

S-100 is an early stage therapeutic candidate for sickle cell disease being developed through Applied Lipid Therapeutics LLC, a wholly owned subsidiary of the company. It is designed to address underlying disease mechanisms using a lipid-based delivery platform, consisting of a unique blend of triglyceride esters of docosahexaenoic acid (DHA) and eicosapentaenoic acid (EPA), combined with a patented absorption-enhancing excipient system to improve bioavailability. The company is advancing chemistry, manufacturing and controls (CMC) activities to support production of clinical supply for a planned phase 2a study. Orphan drug designation has been applied for and is under review by the United States Food and Drug Administration.

We seek Safe Harbor.