Announcement: Execution of Memorandum of Understanding

The Company is pleased to announce that it has executed a Memorandum of Understanding (MOU) with its proposed partner to develop, produce, market and distribute edible films. The MOU sets out the obligations of both parties and the work to be undertaken to determine the feasibility of a joint venture or similar contractual relationship.

This project, along with several other specific projects, is a high commercial priority of the Company and although there can be no assurance that a formal agreement will be concluded, the Company has detailed a senior team to manage the project. The work to be undertaken is complex and extensive and includes: formulation and experimentation of edible film trials; feasibility, cost analysis and development of a programme to establish cGMP facilities; assessment of robustness of IP; market research; regulatory procedures and submissions; and determination of a beneficial business model.

In recent months several trials have been undertaken on various film formulations with encouraging results. The Company has one contract with a large pharma company for which trials will commence in the near future, and is in discussions with a major global company for whom it is anticipated samples will be provided very early in the New Year.

The Company will update shareholders on progress when milestones are achieved.