Lobe Sciences Directors and Management Increase Equity Ownership Through Settlement of Accrued Fees by the Issuance of Common Shares

Executive Summary

• Directors and officers settled C$1.37M in accrued fees by receiving ~12.75M common shares at C$0.11/share, increasing their combined ownership to over 40%.
• The company reported a strong liquidity position with C$4.96M in cash and short-term investments, alongside a significant increase in R&D expenditures to C$2.12M in H1 2026 as it transitions to active clinical execution.
• Subsidiary programs L-130 (CNS/cluster headache) and S-100 (sickle cell disease) remain on track, with L-130 advancing per FDA pre-IND guidance and S-100 progressing CMC activities toward a Phase 2a study while awaiting Orphan Drug designation.

Key Details

• Debt Settlement: C$1,372,761.20 in accrued management and director fees settled via issuance of 12,749,643 common shares.
• Deemed Price: C$0.11 per share.
• Ownership Impact: Management and directors' combined ownership now exceeds 40%.
• Hold Period: 4-month hold period from issuance date per Canadian securities laws.
• Financial Position: C$4.96 million in cash and short-term investments as of quarter ended February 28, 2026.
• R&D Expenditures: C$2.12 million in H1 2026, up from ~C$20,000 in the prior-year period, reflecting transition to active clinical execution.
• L-130 Program (via Cynaptec Pharmaceuticals, 64% owned): Patented psilocin mucate (NCE) for chronic cluster headache; advancing per FDA pre-IND guidance; additional therapeutic applications progressing.
• S-100 Program (via Applied Lipid Therapeutics, wholly owned): Early-stage sickle cell disease candidate using lipid-based delivery platform; advancing CMC activities for clinical supply; planned Phase 2a study; Orphan Drug designation application under review by FDA.
• Subsidiary Financing Model: Designed to finance clinical programs at subsidiary level to limit parent-level dilution; Cynaptec previously raised US$6M for L-130 without issuing Lobe shares.
• Regulatory/MI 61-101: Transaction classified as related-party; exempt from formal valuation and minority approval requirements as consideration/value does not exceed 25% of market cap.

Notable Quotes

• Dr. Frederick D. Sancilio, CEO: "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."
• Dr. Harry Jacobson, Director & Interim CEO of Applied Lipid: "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."
• Mr. Wesley Ramjeet, Director & Audit Committee Chair: "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."