SKIN.L Regulatory News (SKIN)

7 January 2019

Integumen plc

("Integumen" or "the Company")

Trading Update

The Company is pleased to announce the positive results of major restructuring and accelerated growth in product sales and contract test services at Labskin (Innovenn Limited, a wholly-owned subsidiary of Integumen plc).

Highlights:

· Following the year end of 31 Dec, (unaudited) revenue for 2018 is more than 200% of the 2017 level (of £238,000)

· Order book at 31/12/2018 £247,000 (31/12/2017 - £37,000)

· H2 - 480% increase in Labskin sales

· H2 - STOER For Men skin products division reached break-even and recurring orders to June 2019 to maintain at or above breakeven

· Disposal of TSPro GmbH has removed c€1.34m (£1.19m) of short and long-term obligations

· New Product Development of CBD (see below) oils and STOER For Men

· Labskin AI and the integration of data analytics using the Labskin-On-A-Chip portable microbiology laboratory testing with results expected in early Q2 2019

· Labskin additional laboratories at our HQ in York expected to be ready in February 2019

· Labskin Cannabinoid (CBD) testing protocols prepared and will be offered to existing and new skin-care clients

· Combined debt and equity funding of over £900,000 completed

STOER For Men with CBD oils:

New formulation for STOER For Men, a skin care range of products owned by Integumen, is being tested with CBD oils.

CBD oil is an extract from the Cannabis Sativa plant. Cellulac (9.35% owned by Integumen) has developed a low-cost CBD oil extraction process and is collaborating with Labskin to provide a formulation for the STOER For Men range of cosmetics. Testing is underway using CBD oils of a quality comparable to that produced by Cellulac in an earlier proof of concept project. Results expected end of Q1 2019.

Topical CBD's attributes include its anti-inflammatory and analgesic (pain-relief) properties. Researchers are finding more evidence that it can treat skin disorders like dry skin, psoriasis, and eczema. This is why the ingredient is being seen increasingly in many face creams, serums, and body lotions. Inflammation is a contributing factor for acne and the signs of ageing. While acne rates are increasing, there are not many new treatment options in development.

Acne has many components which include blocked pores, excess sebum, inflammation, and proliferation of bacteria. A 2014 study found that CBD helps suppress breakouts by regulating oil production by sebaceous glands. This indicates the potential of using CBD as a non-steroidal over-the-counter alternative to drugs like Accutane and Spironolactone. Assuming CBD has the ability to control inflammation and oil production, it would treat two parts of acne lesion formation. That is significant as the only alternative is the use of retinoids.

Gerard Brandon (Chief Executive Officer) commented:

"Integumen has been transformed to become a vertically integrated business. Other technology collaboration partners in artificial intelligence, clinical research, medical device and life science companies are building their own technology on top of the Labskin AI backbone. Labskin allows skin-care, health-care, pharmaceutical manufacturers and cosmetic companies to test their products on human-like skin in a real-world environment with full access to multiple state-of-the-art partner technologies. We no longer simply manufacture and sell skin-testing kits.

We are a clinical product development Company. We combine data analytics with access to therapeutic operational expertise and offer solutions for our clients from regulatory approvals right through to marketing fully tested ingredients that have been certified on our physical testing living human tissue."