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 C$4.96 million in cash and short-term investments as of its most recent quarter ended February 28, 2026
Subsidiary R&D programs remain on track and on budget, with continued de-risking through Lobe's disciplined development model
VANCOUVER, BC / ACCESS Newswire / June 9, 2026 / Lobe Sciences Ltd. (CSE:LOBE)(OTCQB:LOBEF)(FSE:LOBE.F), a clinical-stage biopharmaceutical company advancing high-potential drug candidates for diseases with significant unmet medical needs through a disciplined pharmaceutical development platform and focused subsidiary companies, today announced that its directors and officers have settled C$1,372,761.20 in accrued management and director fees through the issuance of 12,749,643 common shares of the Company (the "Settlement Shares") at a deemed price of C$0.11 per share (the "Debt Settlement").
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 C$2.12 million in the first half of fiscal 2026, compared to approximately C$20,000 in the prior-year period, reflecting the Company's transition from pre-clinical preparation to active clinical execution across its core programs. Following completion of the share settlement, management and directors' ownership of the Company exceeds 40%.
Lobe's financial position remains strong, with C$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 programs remain on track and on budget, with continued progress intended to de-risk 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 US$6 million to fund the L-130 program without the issuance of additional Lobe common shares.
Dr. Frederick D. Sancilio, Ph.D., 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 ("MI 61-101"). 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% of the Company's market capitalization.
The Settlement Shares have not been and will not be registered under the U.S. Securities Act and may not be offered or sold in the United States, or to, or for the account or benefit of, U.S. persons or persons in the United States, absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.
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% 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 U.S. 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 U.S. Food and Drug Administration.
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR ITS REGULATION SERVICES PROVIDER HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ACCURACY OR ADEQUACY OF THIS NEWS RELEASE.
For Further Information
Dr. Frederick D. Sancilio
Chief Executive Officer
Lobe Sciences Ltd.
Email: info@lobesciences.com
Phone: +1 (949) 505-5623
Website: www.lobesciences.com
Cautionary Statement Regarding "Forward-Looking" Information
This news release includes certain statements and information that may constitute forward-looking information within the meaning of applicable Canadian securities laws. All statements in this news release, other than statements of historical fact, including statements regarding future estimates, plans, objectives, timing, assumptions or expectations of future performance, including, without limitation: the Company's belief that management and director equity ownership further aligns management, the Board and shareholders; the Company's belief that its cash and short-term investment position supports the continued execution of its business plan; the Company's expectation that its subsidiary R&D programs will remain on track and on budget; the Company's expectations regarding the advancement, de-risking, financing and achievement of clinical, regulatory and development milestones for its L-130 and S-100 programs; the Company's expectations regarding the benefits of its subsidiary financing model, including limiting dilution at the parent-company level; the Company's belief that L-130 has potential therapeutic applications, including for chronic cluster headache and potential additional applications; the Company's expectations regarding the timing and conduct of development activities for L-130; the Company's expectations regarding the advancement of chemistry, manufacturing and controls activities for S-100, the production of clinical supply, a planned Phase 2a study and the outcome or timing of review of the Orphan Drug designation application for S-100; and the Company's intention to continue pursuing its development strategy, are forward-looking statements and contain forward-looking information. Generally, forward-looking statements and information can be identified by the use of forward-looking terminology such as "intends", "anticipates", "expects", "believes", "plans", "may", "could", "should", "would" or similar words or expressions.
Forward-looking statements are based on certain material assumptions and analysis made by the Company and the opinions and estimates of management as of the date of this news release, including, among other things, that: the Company's cash and short-term investments, together with available financing alternatives, will be sufficient to support its business plan for the periods anticipated by management; the Company's subsidiary R&D programs will proceed on the timelines and within the budgets currently anticipated; the Company will have access to personnel, contractors, clinical sites, suppliers, regulatory advisors and other resources required to advance L-130 and S-100; regulatory and development activities, including FDA interactions, chemistry, manufacturing and controls activities, production of clinical supply, clinical trial planning and review of the Orphan Drug designation application for S-100, will proceed as currently expected; the Company will be able to finance clinical programs at the subsidiary level where appropriate; and general business, economic, capital market, regulatory and industry conditions will not materially adversely affect the Company's business, financial condition or development plans. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements or forward-looking information.
Important risks that may cause actual results to vary include, without limitation, the risk that: management and director equity ownership may not result in the expected alignment with shareholders; the Company's cash and short-term investments may not be sufficient to support its business plan for the periods anticipated by management; the Company may require additional financing sooner than expected, and such financing may not be available on acceptable terms or at all; the Company's subsidiary financing model may not limit dilution at the parent-company level as anticipated; the Company's R&D programs may not remain on track or on budget; L-130 or S-100 may fail to demonstrate safety, efficacy, therapeutic benefit, commercial viability or regulatory acceptance; clinical, regulatory, manufacturing, financing or development milestones may be delayed, modified or not achieved; the FDA may not grant Orphan Drug designation for S-100 or may require additional information or studies; applicable securities laws, exchange requirements, regulatory requirements or market conditions may adversely affect the Company's plans; and the other risks described in the Company's public disclosure documents filed on SEDAR+. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. Readers are cautioned that reliance on such information may not be appropriate for other purposes. The Company does not undertake to update any forward-looking statement or forward-looking information, except in accordance with applicable securities laws.
SOURCE: Lobe Sciences Ltd.
View the original press release on ACCESS Newswire:
https://www.accessnewswire.com/newsroom/en/biotechnology/lobe-sciences-directors-and-management-increase-equity-ownership-through-settlement-o-1173874
