Lexaria Bioscience Corp 10-Q for FY2023 Q3
Lexaria Bioscience Corp. (LEXX)
About this 10-Q
Lexaria Bioscience Corp filed this 10-Q on July 14, 2023, covering the quarter ended May 31, 2023 (FY2023 Q3).
Headline figures
Quarter ended May 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $93.15K
- down 6.6% from $99.72K a year earlier
- Net loss
- $2.37M
- compared with a net loss of $2.38M a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from [ ] to [ ]
Commission file number
(Exact name of registrant as specified in its charter) |
| ||
(State or other jurisdiction of Incorporation or Organization) |
| (I.R.S. Employer IdentifiCAtion No.) |
|
|
|
| ||
(Address of principal executive offices) |
| (Zip Code) |
Registrant’s Telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
Title of Class | Trading Symbol(s) | Name of each exchange on which registered |
Warrants | LEXXW | The NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the last 90 days.
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
|
| Emerging growth company |
If an emerging growth company, indicate by a check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date.
DOCUMENTS INCORPORATED BY REFERENCE
None.
TABLE OF CONTENTS
| Page 2 of 29 |
| Table of Contents |
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
LEXARIA BIOSCIENCE CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
| May 31, |
|
| August 31, |
| ||
|
| 2023 |
|
| 2022 |
| ||
| ASSETS |
|
|
|
|
|
| ||
| Current |
|
|
|
|
|
| ||
| Cash |
| $ |
|
| $ |
| ||
| Marketable securities |
|
|
|
|
|
| ||
| Accounts receivable |
|
|
|
|
|
| ||
| Inventory |
|
|
|
|
|
| ||
| Prepaid expenses and deposit |
|
|
|
|
|
| ||
| Total Current Assets |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| Non-current assets, net |
|
|
|
|
|
|
|
|
| Right of use assets |
|
|
|
|
|
| ||
| Intellectual property |
|
|
|
|
|
| ||
| Property & equipment |
|
|
|
|
|
| ||
| Total Non-current Assets |
|
|
|
|
|
| ||
| TOTAL ASSETS |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
LIABILITIES and STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities |
|
|
|
|
|
|
|
|
| Accounts payable and accrued liabilities |
| $ |
|
| $ |
| ||
| Lease payable |
|
|
|
|
|
| ||
| Total Current Liabilities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| Long Term Liabilities |
|
|
|
|
|
|
|
|
| Lease payable |
|
|
|
|
|
| ||
| Total Long Term Liabilities |
|
|
|
|
|
| ||
| TOTAL LIABILITIES |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
| Stockholders' Equity |
|
|
|
|
|
|
|
|
| Share Capital |
|
|
|
|
|
|
|
|
| Authorized: |
|
|
|
|
|
|
|
|
| $ |
|
| $ |
| |||
| Additional paid-in capital |
|
|
|
|
|
| ||
| Deficit |
|
| ( | ) |
|
| ( | ) |
| Equity attributable to shareholders of the Company |
|
|
|
|
|
| ||
| Non-controlling Interest |
|
| ( | ) |
|
| ( | ) |
| Total Stockholders' Equity |
|
|
|
|
|
| ||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
| Page 3 of 29 |
| Table of Contents |
LEXARIA BIOSCIENCE CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
| Three-Months Ended |
|
| Nine-Months Ended |
| ||||||||||
|
| May 31, |
|
| May 31, |
| ||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
|
|
|
|
|
|
|
|
| ||||||||
| Revenue |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
| Cost of goods sold |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Gross profit |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Research and development |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| General and administrative |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Total operating expenses |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Loss |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common shareholders |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| Non-controlling interest |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted loss per share |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| - Basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
| ||||
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
| Page 4 of 29 |
| Table of Contents |
LEXARIA BIOSCIENCE CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
| Nine-Months Ended May 31, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
|
| (Unaudited) |
| |||||
| Cash flows used in operating activities |
|
|
|
|
|
| ||
| Net loss |
| $ | ( | ) |
| $ | ( | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
| Stock based compensation |
|
|
|
|
|
| ||
| Depreciation and amortization |
|
|
|
|
|
| ||
| Noncash right-of-use lease expense |
|
|
|
|
|
| ||
| Unrealized loss on marketable securities |
|
|
|
|
|
| ||
| Shares issued for services |
|
|
|
|
|
| ||
| Lease accretion |
|
|
|
|
|
| ||
| Change in operating assets and liabilities |
|
|
|
|
|
|
|
|
| Accounts receivable |
|
|
|
|
| ( | ) | |
| Inventory |
|
|
|
|
| ( | ) | |
| Prepaid expenses and deposits |
|
| ( | ) |
|
|
| |
| Accounts payable and accrued liabilities |
|
|
|
|
|
| ||
| Due to related parties |
|
|
|
|
| ( | ) | |
| Operating lease liability |
|
| ( | ) |
|
|
| |
| Net cash used in operating activities |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
| Cash flows used in investing activities |
|
|
|
|
|
|
|
|
| Purchase of equipment |
|
| ( | ) |
|
| ( | ) |
| Intellectual property |
|
| ( | ) |
|
| ( | ) |
| Net cash used in investing activities |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
| Cash flows from/(used in) financing activities |
|
|
|
|
|
|
|
|
| Proceeds from issuance of equity |
|
|
|
|
|
| ||
| Lease Payments |
|
|
|
|
| ( | ) | |
| Net cash from/(used in) financing activities |
| $ |
|
| $ | ( | ) | |
|
|
|
|
|
|
|
|
|
| Net change in cash for the period |
|
| ( | ) |
|
| ( | ) |
| Cash at beginning of period |
|
|
|
|
|
| ||
| Cash at end of period |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
| Supplemental information of cash flows: |
|
|
|
|
|
|
|
|
| Non-cash shares for services included in prepaid expenses |
| $ |
|
| $ |
| ||
| Income taxes paid in cash |
| $ |
|
| $ |
| ||
| Recognition of ROU Asset and Liability due to modification |
| $ |
|
|
|
|
| |
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
| Page 5 of 29 |
| Table of Contents |
LEXARIA BIOSCIENCE CORP.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Nine-Months Ended May 31, 2023 and 2022
(Unaudited)
|
|
|
|
|
| Additional |
|
|
|
| Non- |
|
|
| ||||||||||
|
| Common Stock |
|
| Paid-in |
|
|
|
| controlling |
|
| Stockholders |
| ||||||||||
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Interest |
|
| Equity |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Balance August 31, 2022 |
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
| ||||
| Stock based compensation |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| Net loss |
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | |||
| Non-controlling interest |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
| Balance November 30, 2022 |
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
| ||||
| Stock based compensation |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| Net loss |
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | |||
| Non-controlling interest |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
| Balance February 28, 2023 |
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
| ||||
| At The Market financing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| S-1 financing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Stock based compensation |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| Net loss |
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | |||
| Non-controlling interest |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
| Balance May 31, 2023 |
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance August 31, 2021 |
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
| ||||
| Stock based compensation |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| Net loss |
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | |||
| Non-controlling interest |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
| Balance November 30, 2021 |
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
| ||||
| Shares issued for services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Net loss |
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | |||
| Non-controlling interest |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
| Balance February 28, 2022 |
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
| ||||
| Stock based compensation |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Net loss |
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | |||
| Non-controlling interest |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
| Balance May 31, 2022 |
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
| ||||
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
| Page 6 of 29 |
| Table of Contents |
LEXARIA BIOSCIENCE CORP. NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS May 31, 2023
|
1. Nature of Business
Lexaria Bioscience Corp. (“Lexaria”, “we”, “our” or “the Company”) is a biotechnology company pursuing the enhancement of the bioavailability of a diverse and broad range of active pharmaceutical ingredients (“API”) using DehydraTECHTM, our patented proprietary drug delivery technology.
We are primarily a research and development company relying on our expanding intellectual property portfolio that continues to investigate the benefits of using DehydraTECH with numerous molecules. We have also begun an investigational new drug (“IND”) registration process with the US Food and Drug Administration (“FDA”).
Revenues are generated primarily from intellectual property (“IP”) licensing contracts for DehydraTECH based on the terms of use and defined geographic and licensing arrangements. We also derive income from our third party contracted manufacturing of Business-to-Business (“B2B”) DehydraTECH enhanced ingredients which are processed to corporate customer specifications and sold by them online and in stores in the US. We also perform contract services in R&D for customer specific formulations that are used in comparison testing to customers’ existing products.
Going Concern Consideration
The Company’s consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with accounting principles generally accepted in the United States (“US GAAP”) applicable to a going concern which assumes the Company will have sufficient funds to pay its operational, research and development and capital expenditures for a period of at least 12 months from the date this Report.
Since inception, the Company has incurred significant operating and net losses. Annual losses attributable to shareholders were $
The Company entered into a sales agreement with Maxim Group LLC, (“Maxim”) on August 12, 2022, where we may offer and sell shares of our common stock with an aggregate offering price of up to $
| Page 7 of 29 |
| Table of Contents |
We may also offer securities for sale during our fiscal year 2023 or thereafter in response to market conditions or other circumstances if we believe such a plan of financing is required to advance the Company’s business plans and is in the best interests of our stockholders.
On May 8, 2023, the Company announced the pricing of its public offering of
The securities described above are registered pursuant to a registration statement on Form S-1, as amended (File No. 333-271096), which was declared effective by the Securities and Exchange Commission (the “SEC”) on May 8, 2023.
Based on our existing working capital, management believes the Company has sufficient working capital to satisfy the Company’s estimated liquidity needs for the next 12 months. In making this assessment, the Company believes that this alleviates the substantial doubt in connection with the Company’s ability to continue as a going concern. However, there is no assurance that management’s plans will be successful. If the Company is unable to obtain funding, the Company would be forced to delay, reduce or eliminate some or all of its research and development programs, preclinical and clinical testing or commercialization efforts, which could adversely affect its business prospects.
| Page 8 of 29 |
| Table of Contents |
2. Significant Accounting Policies
The significant accounting policies of the Company are consistent with those of our audited financial statements on Form 10-K for the year ended August 31, 2022.
Basis of Consolidation
These interim consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries; Lexaria CanPharm ULC, Lexaria CanPharm Holdings Corp., PoViva Corp., Lexaria Hemp Corp., Kelowna Management Services Corp., Lexaria Nutraceutical Corp., and Lexaria Pharmaceutical Corp., and our
Basis of Presentation
The Company’s unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with United States generally accepted accounting principles (US GAAP) have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of results for a full year or for any subsequent period.
These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated annual financial statements and notes thereto included in our annual report filed on Form 10-K for the year ended August 31, 2022.
Recent Accounting Guidance
Pronouncements Issued but Not Yet Adopted
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2023. These standards require that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used, and establishes additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, these standards now require allowances to be recorded instead of reducing the amortized cost of the investment. These standards limit the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. The Company does not currently expect the adoption of these standards to have a material impact on its consolidated financial statements.
Estimates and Judgments
The preparation of financial statements in conformity with US GAAP requires us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Some of the Company’s accounting policies require us to make subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. These accounting policies involve critical accounting estimates because they are particularly dependent on estimates and assumptions made by management about matters that are highly uncertain at the time the accounting estimates are made. Although we have used our best estimates based on facts and circumstances available to us at the time, different estimates reasonably could have been used. Changes in the accounting estimates used by the Company are reasonably likely to occur from time to time, which may have a material effect on the presentation of financial condition and results of operations.
| Page 9 of 29 |
| Table of Contents |
The Company reviews these estimates, judgments, and assumptions periodically and reflect the effects of revisions in the period in which they are deemed to be necessary. Although we believe that these estimates are reasonable actual results could differ.
In preparing these unaudited interim consolidated financial statements, the significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those applied to the audited consolidated financial statements for the year ended August 31, 2022.
3. Marketable Securities
The components of Marketable Securities were as follows:
|
| Cost Basis |
|
| Unrealized Gains |
|
| Unrealized Losses |
|
| Fair Value |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August 31, 2021 |
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| |||
Common stock |
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||
August 31, 2022 |
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| |||
Common stock |
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||
May 31, 2023 |
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| |||
Marketable securities held by Lexaria represent available-for-sale common stock of Hill Incorporated (formerly Hill Street Beverage Company Inc.). Unrealized gains and losses from common stock are due to market price movements. In management’s opinion based on the evaluation of available information at May 31, 2023, unrealized losses represent temporary impairments.
4. Accounts Receivable
Accounts receivable at May 31, 2023 and August 31, 2022 consist of the following:
May 31, 2023 | August 31, 2022 | |||||||
| Trade and deposits | $ | $ | ||||||
| Territory license fees | ||||||||
| Sales tax | ||||||||
| $ | $ | |||||||
| Page 10 of 29 |
| Table of Contents |
5. Inventory
Inventory of raw materials on May 31, 2023, and August 31, 2022, consist of the following:
|
| May 31, 2023 |
|
| August 31, 2022 |
| ||
| Raw materials |
| $ |
|
| $ |
| ||
|
| $ |
|
| $ |
| ||
During the nine-month period ended May 31, 2023, raw materials inventory valued at $
6. Prepaid Expenses and Deposits
Prepaid expenses consist of the following at May 31, 2023 and August 31, 2022:
|
| May 31, 2023 |
|
| August 31, 2022 |
| ||
| Advertising & conferences |
| $ |
|
| $ |
| ||
| Legal fees |
|
|
|
|
|
| ||
| License, filing fees, dues |
|
|
|
|
|
| ||
| Office & insurance |
|
|
|
|
|
| ||
| Consulting |
|
|
|
|
|
| ||
| Capital financing |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
7. Intellectual Property, net
The following is a list of capitalized US patents held by the Company as at May 31, 2023:
Issued Patent # | Patent Certificate Grant Date | Patent Family |
Food and Beverage Compositions Infused With Lipophilic Active Agents and Methods of Use Thereof | ||
Compositions and Methods for Enhanced Delivery of Antiviral Agents |
| Page 11 of 29 |
| Table of Contents |
A continuity schedule for capitalized patents is presented below:
|
| May 31, 2023 |
|
| August 31, 2022 |
| ||
| Balance beginning |
| $ |
|
| $ |
| ||
| Addition |
|
|
|
|
|
| ||
| Amortization |
|
| ( | ) |
|
| ( | ) |
| Balance ending |
| $ |
|
| $ |
| ||
Patents are amortized over their
8. Property & Equipment, net
Property and equipment consist of:
| May 31, 2023 |
| Cost |
|
| Period Amortization |
|
| Additions |
|
| Accumulated Amortization |
|
| Net Balance |
| |||||
Leasehold improvements |
| $ |
|
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ |
| |||
Computers |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) |
| $ |
| |||
Furniture fixtures equipment |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) |
| $ |
| |||
Lab equipment |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) |
| $ |
| |||
|
| $ |
|
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ |
| |||
| August 31, 2022 |
| Cost |
|
| Period Amortization |
|
| Additions |
|
| Accumulated Amortization |
|
| Net Balance |
| |||||
Leasehold improvements |
| $ |
|
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ |
| |||
Computers |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) |
|
|
| |||
Furniture fixtures equipment |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) |
|
|
| |||
Lab equipment |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) |
|
|
| |||
|
| $ |
|
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ |
| |||
During the nine-month period ended May 31, 2023, amortization of $
9. Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities at May 31, 2023 and August 31, 2022 consist of the following:
|
| May 31, 2023 |
|
| August 31, 2022 |
| ||
| Accounts Payable |
|
|
|
|
|
| ||
| Trades payable |
| $ |
|
| $ |
| ||
| Sales tax payable |
|
|
|
|
|
| ||
| Accrued Liabilities |
|
|
|
|
|
|
|
|
| Trades payable |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
| Page 12 of 29 |
| Table of Contents |
10. Revenues
A breakdown of our revenues by type for the nine-months ended May 31, 2023, and 2022 are as follows:
|
| Nine-Months Ended May 31, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
| IP Licensing |
| $ |
|
| $ |
| ||
| B2B |
|
|
|
|
|
| ||
| Other |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
During the nine-month period ended May 31, 2023, the Company recognized licensing revenue consisting of IP licensing fees for transfer of the DehydraTECH technology in line with definitive agreements and includes royalty fees. B2B product revenues of $
11. Common Shares, Warrants and Options
During the quarter ended May 31, 2023, the Company completed the following issuances of common shares, warrants and options:
1. | |
|
|
2. | |
|
|
3. |
No warrants have been exercised during the nine-months ended May 31, 2023.
A continuity schedule for warrants for the nine-months ending May 31, 2023, is presented below:
|
| Number of Warrants |
|
| Weighted Average Exercise Price |
| ||
Balance August 31, 2022 |
|
|
|
| $ |
| ||
Cancelled/expired |
|
| ( | ) |
| $ |
| |
Issued |
|
|
|
| $ |
| ||
Balance May 31, 2023 |
|
|
|
| $ |
| ||
| Page 13 of 29 |
| Table of Contents |
A summary of warrants outstanding as of May 31, 2023, is presented below:
Number of Warrants |
|
| Weighted Average Exercise Price |
|
| Weighted Average Remaining Contractual Life (years) |
| |||
|
|
| $ |
|
|
| ||||
|
|
| $ |
|
|
| ||||
|
|
| $ |
|
|
| ||||
|
|
| $ |
|
|
|
| |||
|
|
| $ |
|
|
|
| |||
|
|
| $ |
|
|
|
| |||
|
|
| $ |
|
|
|
| |||
Stock Options
The Company granted the following options during the nine-months ended May 31, 2023:
|
| Options |
|
| Weighted Average Exercise Price |
|
| Contractual Life (years) |
| |||
|
|
|
|
| $ |
|
|
| ||||
|
|
|
|
| $ |
|
|
| ||||
|
|
|
|
| $ |
|
|
| ||||
Total |
|
|
|
| $ |
|
| (Avg. Remaining Life) |
| |||
A continuity schedule for stock options is presented below:
|
| Options |
|
| Weighted Average Exercise Price |
|
| Weighted Average Remaining Contractual Term (years) |
|
| Aggregate Intrinsic Value |
| ||||
Balance August 31, 2021 |
|
|
|
| $ |
|
|
|
|
|
|
| ||||
Cancelled/expired |
|
| ( | ) |
|
|
|
|
|
|
|
|
| |||
Granted |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Balance August 31, 2022 |
|
|
|
|
|
|
|
|
|
| $ |
| ||||
Granted |
|
|
|
|
|
|
|
|
|
| $ |
| ||||
Balance May 31, 2023 (granted) |
|
|
|
| $ |
|
|
|
|
| $ |
| ||||
Balance May 31, 2023 (exercisable) |
|
|
|
| $ | 3.40 |
|
|
|
|
| $ |
| |||
| Page 14 of 29 |
| Table of Contents |
The fair value of stock options granted in the nine-months ended May 31, 2023, were estimated as of the date of the grant by using the Black-Scholes option pricing model with the following assumptions:
Expected volatility |
| % | ||
Risk-free interest rate |
| % | ||
Expected life |
|
| ||
Dividend yield |
|
| % | |
Estimated fair value per option |
| $ |
|
As of May 31, 2023, the total unrecognized non-cash compensation costs are $
12. Commitments, Significant Contracts and Contingencies
Right of Use Assets - Operating Lease
The corporate office and R&D laboratory are located in Kelowna, British Columbia, Canada. The facility is leased until November 14, 2023, and the Company has exercised its five-year renewal option, the term of which commences on November 15, 2023, and expires on November 14, 2028. On March 31,2023, the Company remeasured the ROU asset and Lease liability for the lease extension. In addition to minimum lease payments, the lease requires us to pay property taxes and other operating costs which are subject to annual adjustments.
|
| May 31, 2023 |
|
| August 31, 2022 |
| ||
Right of use assets - operating leases |
| $ |
|
| $ |
| ||
Remeasurement related to lease extension |
|
|
|
|
|
| ||
Amortization |
|
| ( | ) |
|
| ( | ) |
Total lease assets |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Liabilities: |
| $ |
|
| $ |
| ||
Remeasurement related to lease extension |
|
|
|
|
|
| ||
Lease payments |
|
| ( | ) |
|
| ( | ) |
Interest accretion |
|
|
|
|
|
| ||
Total lease liabilities |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Operating lease cost |
| $ |
|
| $ |
| ||
Operating cash flows for lease |
| $ |
|
| $ |
| ||
Remaining lease term |
|
|
|
| ||||
Discount rate |
|
| % |
|
| % | ||
The following table summarizes the Company’s maturities of operating lease liabilities as of May 31, 2023:
2023 (three-months remaining) |
| $ |
| |
2024 |
|
|
| |
2025 |
|
|
| |
2026 |
|
|
| |
Thereafter |
|
|
| |
Total lease payments |
| $ |
| |
Less: imputed interest |
|
| ( | ) |
Present value of operating lease liabilities |
| $ |
| |
Less: current obligations under leases |
|
| ( | ) |
Total |
| $ |
|
| Page 15 of 29 |
| Table of Contents |
13. Segment Information
The Company’s operations involve the development and usage, including licensing, of its proprietary DehydraTECH Technology. Lexaria is centrally managed and its chief operating decision makers, being the President and the CEO, use the consolidated and other financial information, supplemented by revenue information by category of alternative health consumer products and technology licensing, to make operational decisions and to assess the performance of the Company. The Company has identified two reportable segments: Intellectual Property and B2B Products. Licensing revenues are significantly concentrated on one licensee.
| Nine-Months Ended May 31, 2023 |
| IP Licensing |
|
| B2B |
|
| Corporate |
|
| Consolidated Total |
| ||||
| Revenue |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
| Cost of goods sold |
|
|
|
|
| ( | ) |
|
|
|
| $ | ( | ) | ||
| Operating expenses |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
| $ | ( | ) |
| Segment income (loss) |
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) | |
| Total assets |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
| Nine-Months Ended May 31, 2022 |
| IP Licensing |
|
| B2B |
|
| Corporate |
|
| Consolidated Total |
| ||||
| Revenue |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
| Cost of goods sold |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||
| Operating expenses |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
| Segment loss |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
Total assets |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
| Capital Asset by Region May 31, 2023 |
| Cost |
|
| Addition US |
|
| Net Balance |
|
| Cost |
|
| Addition Canada |
|
| Net Balance Canada |
|
| Total Net Balance |
| |||||||
Leasehold Improvements |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||||
Computers |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Furniture & Fixtures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Lab Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||||
| Capital Asset by Region August 31, 2022 |
| Cost |
|
| Addition US |
|
| Net Balance |
|
| Cost |
|
| Addition Canada |
|
| Net Balance Canada |
|
| Total Net Balance |
| |||||||
Leasehold Improvements |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||||
Computers |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Furniture & Fixtures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Lab Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||||
14. Subsequent Events
None.
| Page 16 of 29 |
| Table of Contents |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Note Regarding Forward-Looking Statements
This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not statements of historical fact may be forward-looking statements. These statements relate to future events or our future financial performance. Any forward-looking statements are based on our present beliefs and assumptions as well as the information currently available to us. In some cases, forward-looking statements are identified by terminology such as “may”, “will”, “should”, “could”, “targets”, “goal”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” set forth in Item 1(A) in our annual report on Form 10-K, as filed with the Securities and Exchange Commission on November 25, 2022, that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We caution you not to place undue reliance on any forward-looking statements as they speak only as of the date on which such statements were made, and we undertake no obligation to update any forward-looking statement or to reflect the occurrence of an unanticipated event. New factors may emerge and it is not possible to predict all factors that may affect our business and prospects. Further, management cannot assess the impact of each factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
Our unaudited interim consolidated financial statements are stated in United States Dollars (“US$”) and are prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”). The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report.
In this quarterly report, unless otherwise specified, all dollar amounts are expressed in US dollars. All references to “common shares” and “shares” refer to the common shares in our capital stock, unless otherwise indicated. The terms “Lexaria” “we”, “us”, “our” and “Company” mean the Company and/or our subsidiaries, unless otherwise indicated.
The following discussion should be read in conjunction with our condensed financial statements and accompanying notes in this quarterly report on Form 10-Q, and our audited financial statements with notes in our annual report on Form 10-K for the year ended August 31, 2022.
Overview
Lexaria’s patented DehydraTECH technology improves the delivery of bioactive compounds while promoting healthy ingestion methods, lowers overall dosing, and is highly effective in active molecule delivery available in a range of formats from oral ingestible to oral buccal/sublingual to topical products. DehydraTECH substantially improves the rapidity and quantity of Active Pharmaceutical Ingredients (“API”) transport to the blood plasma and brain using the body’s natural process for distributing fatty acids. Applications of this technology extends across many categories beyond the primary pharmaceutical focus of the Company, from foods and beverages to cosmetic products and nutraceuticals.
| Page 17 of 29 |
| Table of Contents |
Our mission is to obtain FDA approval for a DehydraTECH-CBD drug for use on hypertension. Lexaria operates a federally licensed, in-house research laboratory and continues to build upon our intellectual property portfolio with 34 patents granted internationally and many other patents pending worldwide.
Lexaria is advancing several R&D activities in both preclinical and future clinical programs, with our primary focus during the current year, being our investigations of CBD for the reduction of hypertension. In fiscal 2022 we completed three human studies on hypertension with the results of our fourth and largest hypertension study to date culminating in the publication of six research articles.
The Company continues to engage in small R&D projects and B2B formulation for third parties who are evaluating our technology for use in their products.
Patents
Our current patent portfolio includes patent family applications or grants pertaining to our method of improving bioavailability and taste, and the use of DehydraTECH as a delivery platform for a wide variety of APIs including, but not limited to, fat soluble vitamins; anti-viral drugs; phosphodiesterase inhibitors; human hormones; regulated cannabinoids, and nicotine and its analogs.
We continue to pursue patent protection in more than 40 countries around the world as vigorously as we are able, since the successful granting of more of those applications could lead to material increases in shareholder value.
The Company has patents issued in the United States, Australia, Europe, India, Mexico, Canada and Japan. Since our last 10-Q quarterly report filing, we were advised of six additional paten issuances; one in Japan, one in Australia, two in Canada and two in the US. Our new US patents, protect the use of DehydraTECH enhanced cannabidiol for use in pharmaceutical compositions and methods for treating hypertension and DehydraTECH enhanced cannabidiol for use in general compositions and methods for treating hypertension.
| Page 18 of 29 |
| Table of Contents |
The issued patents of the Company as at the date of this quarterly report are disclosed in the following table:
Issued Patent # | Patent Family |
US 9,474,725 B1 | #1 Food and Beverage Compositions Infused With Lipophilic Active Agents and Methods of Use Thereof
|
US 9,839,612 B2 | |
US 9,972,680 B2 | |
US 9,974,739 B2 | |
US 10,084,044 B2 | |
US 10,103,225 B2 | |
US 10,381,440 | |
US 10,374,036 | |
US 10,756,180 | |
AU 2015274698 | |
AU 2017203054 | |
AU 2018202562 | |
AU 2018202583 | |
AU 2018202584 | |
AU 2018220067 | |
EP 3164141 | |
JP 6920197 | |
CDN 2949369 | |
AU 2016367036 | #2 Methods for Formulating Orally Ingestible Compositions Comprising Lipophilic Active Agents |
JP 6963507 | |
MX 388 203 B | |
AU 2016367037 | #3 Stable Ready-to-Drink Beverage Compositions Comprising Lipophilic Active Agents |
IN 365864 | |
JP 6917310 | |
MX 390001 | |
JP 7232853 | |
CDN 3093414 | #6 Transdermal and/or Dermal Delivery of Lipophilic Active Agents |
JP 7112510 | #7 Lipophilic Active Agent Infused Compositions with Reduced Food Effect |
AU 2019256805 | #8 Compositions Infused with Nicotine Compounds and Methods of Use Thereof |
CDN 3096580 | |
US 11,311,559 | #18 Compositions and Methods for Enhanced Delivery of Antiviral Agents |
AU 2021261261 | |
US 11,666,544 | #21 Compositions and Methods for Treating Hypertension |
US 11,666,543 |
| Page 19 of 29 |
| Table of Contents |
Research & Development
Lexaria is advancing several R&D activities in both preclinical and clinical programs. Currently, our primary research program is the investigation of cannabidiol (“CBD”) for the reduction of hypertension leading to an application under the FDA for an IND. Other programs include DehydraTECH formulation development and testing with nicotine for oral pouches and prospective nicotine replacement therapy, human hormones, CBD for diabetes, dementia and others. From time to time the Company will engage in contract R&D for third parties who are interested in evaluating DehydraTECH in their products.
During the quarter ended May 31, 2023, Lexaria incurred $1,640,648 (May 2022- $752,095) in R&D expenditures. Specific R&D programs are in ongoing development and align to our financial ability to undertake each research phase for each API. Due to our expanding patent portfolio coverage, we continually examine accelerated timetable options for testing, research, and development of each API. Fiscal 2023 continues to highlight the direction of our research and development programs with confirmatory results from our ongoing programs. We continue to devote an increasing proportion of our resources and focus toward pharmaceutical applications.
Investigational New Drug
The FDA provided Lexaria with a positive written response on August 10, 2022, from our pre-IND meeting regarding DehydraTECH-CBD for the treatment of hypertension. The FDA confirmed that it has agreed with Lexaria’s proposal to pursue a 505(b)(2) new drug application (“NDA”) regulatory pathway for our program. We continue working toward our IND filing which is anticipated to be in late fiscal 2023 or early 2024. We have selected InClin Inc. as our contract research organization (“CRO”) to perform the IND study which will be a Phase 1(b) study that we are designating HYPER-H23-1. We have completed manufacturing our IND drug product through our third-party contract manufacturer, in compliance with current Good Manufacturing Practice (“cGMP”) regulations as mandated by the FDA, which has been set down for stability testing. We anticipate receiving the last of the results from the stability testing necessary for disclosure in our IND filing at the end of our fiscal fourth quarter following which we will be in a position to file our IND application. Along with our CRO, we have begun certain administrative study start-up tasks associated with preparation to perform study HYPER-H23-1 when ready to be initiated following IND effectiveness.
HYPER-H21-4
The first results of our hypertension study HYPER-H21-4 were announced on October 27, 2022, with the primary safety and efficacy objectives being met. HYPER-H21-4 was a randomized, double-blinded, placebo-controlled, cross-over study that consisted of male and female volunteers between the ages of 40-70. Sixty-six (66) people were ultimately dosed to completion of the study and, prior to enrollment, they had documented or measured:
| · | elevated blood pressure (120/80 to 139/80 mmHg); |
| · | mild (stage 1) hypertension (140/90 to 159/99 mmHg); or |
| · | moderate (stage 2) hypertension (160/100 to 179/109 mmHg). |
| Page 20 of 29 |
| Table of Contents |
All study participants received DehydraTECH-CBD every day for a 5-week duration in the dose-escalating 2.5 week increments noted above. Upon cross-over and wash out, all 66 study participants also received the matching placebo for a 5-week duration following the study randomization schedule. Thirty-three (33) of these patients had been diagnosed with hypertension but were not being treated with any antihypertensive medications, while 33 patients had been diagnosed with hypertension and were receiving commonly used antihypertensive therapies including angiotensin-converting enzyme (“ACE”) inhibitors with or without diuretics; or alternatively, ACE inhibitors with calcium channel blockers. The complete study protocol has and select findings from the study have already been published and is available at PubMed. The initial study results showed a sustained drop in blood pressure in normally active hypertensive patients following multiple weeks of oral CBD therapy, using Lexaria’s patented DehydraTECH-CBD capsule formulation.
Lexaria is aware of only a handful of other published research studies, mostly in young, healthy, and normotensive volunteers, that have investigated whether a sustained decrease in resting blood pressure is possible following multiple weeks of oral CBD dosing; none of which have been successful in achieving this. DehydraTECH-CBD appears to reduce blood pressure more effectively than other oral CBD formulations.
Subsequent to the announcement of the initial results from HYPER-H21-4, the Company supplemented its findings with additional research results which appeared to demonstrate:
| · | increased CBD blood absorption levels from our patented DehydraTECH-CBD™ relative to those of published, pharmaceutical-grade CBD industry peers; |
|
|
|
| · | a potentially novel mechanism of action in reducing blood pressure whereby the antihypertensive effects of DehydraTECH-CBD may be explained, at least in part, by its interaction with the sympatho-chromaffin system via catestatin modulation, thus suggesting a potentially unique mechanistic benefit upon cardiovascular regulation with DehydraTECH-CBD treatment; and |
|
|
|
| · | significant reductions in several pro-inflammatory biomarkers known to be linked to cardiovascular disease (“CVD”) and a host of other conditions through evidenced reduction in blood-plasma levels of interleukin (“IL”) 8, 10, and 18 by ~19%, ~27%, and ~43%, respectively. |
EPIL-A21-1
In March 2022, Lexaria initiated an animal study to determine if DehydraTECH-CBD evidences superior treatment of seizure activity when compared to Epidiolex®. Epidiolex is an FDA-approved oral solution prescription CBD available to children 1 year of age and older to treat seizures associated with Lennox-Gastaut syndrome, Dravet syndrome or tuberous sclerosis complex.
On November 29, 2022, Lexaria announced findings from the study indicating its patented DehydraTECH-CBD has demonstrated performance enhancements compared to one of the world’s leading anti-seizure medications, Epidiolex, generally at a lower DehydraTECH-CBD dose.
Additional work has been completed in study program EPIL-A21-1 with the final study designed to establish an ED50 (i.e., the dose required to achieve seizure inhibition in 50% of the animals tested) for DehydraTECH-CBD in this animal model, where ED50 determination is a common performance metric in preclinical animal studies for developmental therapeutics. This ED50 study was designed to corroborate the experimental findings to-date and the final results confirmed that DehydraTECH-CBD was most effective at a dose of 75 mg/Kg as compared to the standard Epidiolex dosage of 100 mg/Kg. Further testing would be required to validate these findings in humans, although these dose levels in animals converted to human equivalent doses would be expected to be in the 10-12 mg/Kg and 15-16 mg/Kg ranges respectively based on typical animal to human conversion practices.
DEM-A22-1
On November 8, 2022 commencement of animal study program DEM-A22-1 was announced. The study was designed to determine whether DehydraTECH-CBD may offer therapeutic utility against diabetes and dementia respectively. This study had several unexpected complications that produced inconclusive results. Should the Company choose to further pursue research in this area, it will likely be for a longer duration and may involve DehydraTECH-nicotine rather than DehydraTECH-CBD.
| Page 21 of 29 |
| Table of Contents |
DIAB-A22-1
We announced the commencement of animal study program DIAB-A22-1 on November 8, 2022. On March 2, 2023 the Company announced that its diabetes animal model study had completed and produced at least three positive outcomes including weight loss in obese diabetic-conditioned animals, together with improved triglyceride and cholesterol levels. Subsequent to the quarter ended May 31, 2023, the Company announced further results indicating that the blood glucose levels were lowered and kidney function improved in the obese diabetic-conditioned animals treated with DehydraTECH-CBD.
HOR-A22-1
Lexaria’s animal study HOR-A22-1, being a pharmacokinetic study performed in twenty female Sprague-Dawley rats in order to evaluate the ability of DehydraTECH™ to enhance the delivery characteristics of orally administered estradiol, was successfully completed during the third fiscal quarter, and showed enhancement in the oral delivery of the estrogen hormone estradiol.
The DehydraTECH-estradiol formulation achieved an average peak concentration in the bloodstream (or “Cmax”) of 5.65ng/mL that was roughly nine times (900%) higher than that achieved with the control formulation at only 0.63 ng/mL. As well, the study revealed that levels of the estrone metabolite were also significantly higher comparing an average Cmax of 6.49 ng/mL with the DehydraTECH formulation to only 0.302 ng/mL achieved with the control, representing greater than a twenty-fold (2,000%) improvement in delivery.
NIC-H22-1
On November 1, 2022, the Company announced that independent review board approval had been received for human clinical nicotine study NIC-H22-1. The study is a 36-person human pharmacokinetic randomized, double blinded, cross-over study conducted in current cigarette smokers, wherein each person will visit the laboratory to be dosed three times over a period of weeks. During each visit only one oral nicotine pouch will be administered and evaluated: either DehydraTECH-nicotine; On! brand manufactured by Altria; or Zyn brand manufactured by Swedish Match. The primary study objectives are to determine the quantity of nicotine in blood at various time points and vital-sign data collection including blood pressure, heart rate and respiratory rate. Subjective evaluations related to throat burn, user experience, gastrointestinal experience and more are also being conducted.
At the date of this report, dosing in the study has been completed with sample and data analyses underway at varying stages and the results from the study anticipated to be released in the fourth quarter of 2023.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
Critical Accounting Estimates
Our consolidated financial statements and accompanying notes are prepared in accordance with US GAAP. These accounting principles require management to make certain estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses during the periods reported. Based on information available to management at the time, these estimates, judgments and assumptions are considered reasonable. We believe that understanding the basis and nature of the estimates, judgments and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financials. We considered the impact of the COVID-19 pandemic on the assumptions and estimates used and determined that there were no material adverse impacts on the financial statements for the nine-months ended May 31, 2023.
For a discussion of our critical accounting estimates, please read Note 4. Estimates and Judgements as found in the financial statements in our Annual Report on Form 10-K for the year ended August 31, 2022. There have been no material changes to the critical accounting estimates as previously disclosed in our 2022 Form 10-K.
Funding Requirements
We anticipate that our expenditures will increase in connection with our ongoing R&D program, specifically with respect to our animal and human clinical trials of our DehydraTECH formulations for the purposes of treating hypertension and diabetes. As we move forward with our IND application with the FDA, we anticipate that our expenditures will further increase and accordingly, we expect to incur increased operating losses and negative cash flows for the foreseeable future.
Through May 31, 2023, we have funded our operations primarily through the proceeds from the sale of common stock. The Company has consistently incurred recurring losses and negative cash flows from operations, including net losses of $5,463,510 and $5,870,492 for the nine-months ended May 31, 2023, and 2022, respectively.
| Page 22 of 29 |
| Table of Contents |
The continuation of Lexaria as a going concern depends on raising additional capital and/or attaining and maintaining profitable operations. The accompanying financial statements do not include any adjustment relating to the recovery and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should our Company discontinue operations. The recurring losses from operations and net capital deficiency raise substantial doubt about the Company’s ability to continue as a going concern within one year following the date that these consolidated financial statements are issued.
On August 12, 2022, we entered into an At-The-Market (“ATM”) Offering equity distribution agreement with Maxim Group LLC, (“Maxim”), pursuant to which we may offer and sell shares of our common stock with an aggregate offering price of up to $5,925,000. The sales agreement entitles Maxim to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the ATM.
On May 11, 2023, the Company entered into share purchase agreements for the purposes of completing a $2 million best efforts financing with Maxim resulting in the issuance of 2,106,000 common shares and warrants to purchase common shares.
We have performed a review of our cash flow forecast and have concluded that funds on hand, combined with those expected from executed license agreements, will be sufficient to meet the Company’s financial obligations for the twelve-month period following the filing of these consolidated financial statements on Form 10-Q.
Results of Operations for the Period Ended May 31, 2023, and 2022
Our net loss for the nine-months ended for the respective items are summarized as follows:
Nine-Months Ended May 31, |
| 2023 |
|
| 2022 |
|
| Change |
| |||
| Revenues |
| $ | 229,641 |
|
| $ | 144,247 |
|
| $ | 85,394 |
|
| Research and development |
|
| 3,166,315 |
|
|
| 1,486,487 |
|
|
| 1,679,828 |
|
| Consulting fees & salaries |
|
| 1,030,042 |
|
|
| 1,672,825 |
|
|
| (642,783 | ) |
| Legal and professional |
|
| 364,779 |
|
|
| 439,942 |
|
|
| (75,163 | ) |
| Other general and administrative |
|
| 1,100,515 |
|
|
| 2,384,893 |
|
|
| (1,284,378 | ) |
Net Loss |
| $ | (5,463,510 | ) |
| $ | (5,870,492 | ) |
| $ | 406,982 |
|
Revenue
Fees from intellectual property licensing increased by $88,775 while B2B sales decreased by $67,430 with other sales higher by $64,049 year-over year.
Research and Development
Expenditures on R&D increased by $1,679,828 year-over year for the period ended May 31, 2023, as the company continues with applied research and development programs in our pharmaceutical division with our primary focus being on FDA approval for a DehydraTECH-CBD drug to treat hypertension.
| Page 23 of 29 |
| Table of Contents |
Consulting Fees and Salaries
In the nine-months ended May 31, 2023, consulting fees and salaries decreased by $642,783 primarily due to the prior years’ recognition of stock-based compensation costs recorded for contractors and employees ($358,970), and the charges of salaries to research and development ($305,283), due to increased clinical development activity.
Legal and Professional Fees
Our legal and professional fees decreased by $75,163 during the period compared to the same prior year period. Previous year expenditures were higher due to increased patent and trademark filings and the utilization of additional legal advisory services.
General and Administrative
Our other general and administrative expenses decreased overall by $1,284,378 during the period ended May 31, 2023, over the same period last year. Advertising and promotion were down by $474,642 in the current period with a slight decrease in investor relations ($68,457). There was an increase of $ 40,871 in office expenses and unrealized losses on marketable securities were considerably lower in the current year ($77,775 vs $823,916).
Liquidity and Financial Condition
| Working Capital |
| May 31, |
|
| August 31, |
| ||
|
| 2023 |
|
| 2022 |
| ||
|
|
|
|
|
|
| ||
Current assets |
| $ | 4,235,490 |
|
| $ | 6,977,516 |
|
Current liabilities |
|
| (1,055,904 | ) |
|
| (194,036 | ) |
Net Working Capital |
| $ | 3,179,586 |
|
| $ | 6,783,480 |
|
|
| Nine-Months Ended |
| |||||
Cash Flows |
| May 31, |
| |||||
| 2023 |
|
| 2022 |
| |||
|
|
|
|
|
|
| ||
| Cash flows used in operating activities |
| $ | (4,259,557 | ) |
| $ | (3,702,724 | ) |
| Cash flows used in investing activities |
|
| (101,173 | ) |
|
| (130,595 | ) |
| Cash flows used in financing activities |
|
| 1,711,418 |
|
|
| (33,395 | ) |
Decrease in cash |
| $ | (2,649,312 | ) |
| $ | (3,866,714 | ) |
Operating Activities
Net cash used in operating activities increased approximately $557,000 for the period compared with cash used during the same period in 2022. The increase relates primarily to a lower unrealized loss on marketable securities ($746,141), combined with lower non-cash expenses related to shares issued for services rendered ($600,000) and stock-based compensation ($358,970); partially offset by increased accounts payable and accrued liabilities ($815,786), and a lower net loss ($406,982).
| Page 24 of 29 |
| Table of Contents |
Investing Activities
Net cash used in investing activities decreased by $29,422 over 2022 due to decreased spending on acquisitions of equipment and intellectual property.
Financing Activities
The $1,744,814 increase in cash from financing activities relates to common shares issued in the ATM Offering and common share/warrant units sold.
Liquidity and Capital Resources
We have incurred net losses of approximately $7.4 million and $4.2 million respectively in the past two fiscal years. We expect to continue to incur significant expenditures for R&D and operational activities resulting in net losses in the upcoming 12 months and beyond. Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the stage and complexity of our R&D studies and related expenditures, the receipt of additional revenues from the licensing of our technology and B2B sales, if any, and the receipt of payments under any current or future collaborations we may enter into.
As the Company continues with our IND application process and progresses into the clinical development of our initial product candidate, the need for substantial capital resources increases. Our existing cash will not be sufficient to complete the full development, testing and commercialization of an FDA approved product candidate. To achieve this objective, we will require substantial funding in the future.
On August 12, 2022, we entered an equity distribution agreement with Maxim, under the agreement we may offer and sell shares of our common stock with an aggregate offering price of up to $5,925,000 under an ATM. The sales agreement provides that Maxim will be entitled to a sales commission equal to 3.0% of the gross sale price per share of all shares sold under the ATM. As of July 14, 2023, we have sold 34,652 shares into the market through the ATM for gross proceeds of $114,546. Based on the current equity value of the Company’s shares, the Company’s revised ability to use the ATM is limited to $1,965,533. Pursuant to the terms of the Company’s May 11, 2023, financing described below, the Company’s ability to use its ATM is currently on hold.
On May 11, 2023, the Company entered into share purchase agreements for the purposes of completing a $2 million best efforts financing with Maxim resulting in the issuance of 2,106,000 common shares and warrants to purchase common shares.
We may also offer securities in response to market conditions or other circumstances if we believe such a plan of financing is required to advance the Company’s business plans. There is no certainty that future equity or debt financing will be available or that it will be at acceptable terms. The outcome of these matters is unpredictable. A lack of adequate funding may force us to reduce spending, curtail or suspend planned programs or possibly liquidate assets. Any of these actions could adversely and materially affect our business, cash flow, financial condition, results of operations, and potential prospects. The sale of additional equity may result in additional dilution to our stockholders. Entering into additional licensing agreements, collaborations, partnerships, alliances marketing, distribution, or licensing arrangements with third parties to increase our capital resources is also possible. If we do so we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.
| Page 25 of 29 |
| Table of Contents |
The Company has evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern. As of May 31, 2023, the Company had cash on hand of approximately $3,163,906 to settle $1,055,904 in current liabilities. We have performed a review of our cash flow forecast and have concluded that funds on hand, combined with those expected from executed license agreements, will be sufficient to meet the Company’s financial obligations for the twelve-month period following the filing of these consolidated financial statements on Form 10-Q.
Impact of COVID-19
To date, we have not experienced any material impact on our financial statements, impairments of any of our assets or any major business disruptions, including with our vendors. We will continue to actively monitor the evolving situation related to COVID-19 and may take further actions that alter our operations, including those that may be required by federal, state, provincial, or local authorities, or that we determine are in the best interests of our employees and other third parties with whom we do business. We do not know when, or if, it will become practical to revise or eliminate some or all these measures entirely.
Item 3. Controls and Procedures
Management’s Report on Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our President (Principal Executive Officer) and our Chief Executive Officer (currently acting as the Principal Financial and Accounting Officer) to allow for timely decisions regarding required disclosure.
As of May 31, 2023, the fiscal quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of May 31, 2023.
Inherent limitations on Effectiveness of Controls
Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, regulations, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human error. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Control over Financial Reporting
During the quarter ended May 31, 2023, our controls and controls processes remained consistent with August 31, 2022. There have been no changes in our internal controls over financial reporting that occurred during the quarter ended May 31, 2023, that have materially or are reasonably likely to materially affect our internal controls over financial reporting.
| Page 26 of 29 |
| Table of Contents |
PART II-OTHER INFORMATION
Item 1. Legal Proceedings
We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any other material proceeding or pending litigation. There are no proceedings in which any of our directors, executive officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.
Item 1A. Risk Factors
Much of the information included in this quarterly report includes or is based upon estimates, projections or other “forward looking statements”. Such forward looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.
The risks associated with our business, common stock and other factors are those described in the Form 10-K for the year ended August 31, 2022 as filed with the SEC on November 25, 2022.
| Page 27 of 29 |
| Table of Contents |
Item 2. Exhibits, Financial Statement Schedules
a) Financial Statements
| 1) | Financial statements for our Company are listed in the index under Item 1 of this document. |
|
|
|
| 2) | All financial statement schedules are omitted because they are not applicable, not material or the required information is shown in the financial statements or notes thereto. |
b) Exhibits
Exhibit Number |
| Description |
(3) |
| Articles of Incorporation and Bylaws |
| ||
| ||
| Amended and Restated Articles of Incorporation (Filed on Form 8-K January 14, 2021 Exh. 3.1) | |
| ||
| Amended and Restated Bylaws (Filed on Form S-1 June 3, 2020 Exh 3.4) | |
| ||
| ||
| ||
| Amendment to Articles of Incorporation - Name Change (Filed on Form 8-K May 11th, 2016 Exh 99.1) | |
(4) |
| Instruments Defining the Rights of Security Holders |
| ||
| ||
(10) |
| Material Contracts |
| ||
| Placement Agency Agreement (Filed on Form 8-K May 10, 2023 Exh.10.2) | |
| ||
(31) |
| Rule 13(a) - 14 (a)/15(d) - 14(a) |
| Section 302 Certifications under Sarbanes-Oxley Act of 2002 of Principal Executive Officer | |
| ||
(32) |
| Section 1350 Certifications |
| Section 906 Certification under Sarbanes Oxley Act of 2002 of Principal Executive Officer | |
| ||
|
|
|
(101)** |
| Interactive Data Files |
101.INS |
| XBRL Instance Document |
101.SCH |
| XBRL Taxonomy Extension Schema Document |
101.CAL |
| XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
| XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
| XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
| XBRL Taxonomy Extension Presentation Linkbase Document |
** Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.
| Page 28 of 29 |
| Table of Contents |
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
LEXARIA BIOSCIENCE CORP.
By: | /s/ John Docherty | |
John Docherty | ||
President and Director | ||
(Principal Executive Officer) | ||
Date: July 14, 2023 | ||
In accordance with the Exchange Act, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ John Docherty |
|
John Docherty |
| |
President and Director |
| |
(Principal Executive Officer) |
| |
Date: July 14, 2023 | ||
| ||
| By: | /s/ Christopher Bunka | |
Christopher Bunka Chief Executive Officer, Chairman and Director (Principal Financial and Accounting Officer) Date: July 14, 2023 | ||
| Page 29 of 29 |
EXHIBIT 10.3
EXHIBIT 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. ss 1350, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, John Docherty, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Lexaria Bioscience Corp.; |
|
|
|
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
|
|
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
|
|
| 4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
|
|
|
|
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
|
|
|
|
| c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
|
|
|
|
| d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's first fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
| 5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
|
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
|
|
|
|
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: July 14, 2023
| /s/ John Docherty |
|
| John Docherty |
|
| President and Director |
|
| (Principal Executive Officer) |
|
EXHIBIT 31.2
CERTIFICATION PURSUANT TO
18 U.S.C. ss 1350, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Christopher Bunka, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Lexaria Bioscience Corp.; |
|
|
|
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
|
|
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
|
|
| 4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
|
|
|
|
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
|
|
|
|
| c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
|
|
|
|
| d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's first fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
| 5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
|
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
|
|
|
|
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: July 14, 2023
| /s/ Christopher Bunka |
|
| Christopher Bunka |
|
| Chief Executive Officer & Director |
|
| (Principal Financial Officer and Principal Accounting Officer) |
|
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, John Docherty, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | the Quarterly Report on Form 10-Q of Lexaria Bioscience Corp. for the quarter ended May 31, 2023 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|
|
|
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Lexaria Bioscience Corp. |
| Dated: July 14, 2023 |
|
| |
|
|
|
| |
|
|
| /s/ John Docherty | |
|
|
| John Docherty | |
|
|
| President and Director | |
|
|
| (Principal Executive Officer) | |
|
|
| Lexaria Bioscience Corp. |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Lexaria Bioscience Corp. and will be retained by Lexaria Bioscience Corp. and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Christopher Bunka, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | the Quarterly Report on Form 10-Q of Lexaria Bioscience Corp. for the quarter ended May 31, 2023 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|
|
|
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Lexaria Bioscience Corp. |
| Dated: July 14, 2023 | |||
| /s/ Christopher Bunka | |||
| Christopher Bunka | |||
| Chief Executive Officer | |||
| (Principal Financial Officer and Principal Accounting Officer) | |||
| Lexaria Bioscience Corp. |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Lexaria Bioscience Corp. and will be retained by Lexaria Bioscience Corp. and furnished to the Securities and Exchange Commission or its staff upon request.