Research and Development - Lexaria incurred $1,640,648 in R&D expenditures for the quarter ended May 31, 2023, compared to $752,095 in May 2022, indicating a significant increase in investment in research activities [80]. - The FDA has agreed to Lexaria's proposal to pursue a 505(b)(2) new drug application regulatory pathway for DehydraTECH-CBD for the treatment of hypertension, with an IND filing anticipated in late fiscal 2023 or early 2024 [81]. - The initial results from the hypertension study HYPER-H21-4 showed a sustained drop in blood pressure in normally active hypertensive patients following multiple weeks of oral CBD therapy [83]. - DehydraTECH-CBD demonstrated increased blood absorption levels compared to published pharmaceutical-grade CBD industry peers, suggesting superior efficacy in blood pressure reduction [86]. - The DehydraTECH-estradiol formulation achieved an average peak concentration in the bloodstream of 5.65 ng/mL, approximately 900% higher than the control formulation [93]. - Lexaria's patent portfolio includes 34 granted patents and ongoing applications in over 40 countries, which could lead to material increases in shareholder value [75]. - The company completed three human studies on hypertension in fiscal 2022, with results from the fourth study published in six research articles [72]. - Lexaria is advancing several R&D activities, including investigations of CBD for diabetes and dementia, with positive outcomes reported in animal studies [91]. - The company continues to engage in small R&D projects and B2B formulation for third parties evaluating DehydraTECH technology for their products [73]. - Lexaria's patented DehydraTECH technology improves the delivery of bioactive compounds, enhancing the effectiveness of various active pharmaceutical ingredients [70]. - The company anticipates increased expenditures related to ongoing R&D programs, particularly for clinical trials of DehydraTECH formulations [99]. Financial Performance - The company reported a net loss of $5,463,510 for the nine months ended May 31, 2023, compared to a net loss of $5,870,492 for the same period in 2022, reflecting a decrease of $406,982 [100][106]. - Revenues increased to $229,641 for the nine months ended May 31, 2023, up from $144,247 in 2022, marking an increase of $85,394 [105][107]. - Research and development expenditures rose significantly by $1,679,828 year-over-year, totaling $3,166,315 for the nine months ended May 31, 2023 [105][108]. - Cash flows used in operating activities increased to $4,259,557 for the nine months ended May 31, 2023, compared to $3,702,724 in 2022 [112][113]. - The company entered into a $2 million financing agreement resulting in the issuance of 2,106,000 common shares and warrants [119]. - The company has no off-balance sheet arrangements that could materially affect its financial condition [96]. - The company has evaluated its ability to continue as a going concern and has cash on hand of approximately $3,163,906 to settle current liabilities [121]. Future Expectations - The anticipated results from the human clinical nicotine study NIC-H22-1 are expected to be released in the fourth quarter of 2023 [95]. - As of May 31, 2023, the company had current assets of $4,235,490 and current liabilities of $1,055,904, resulting in net working capital of $3,179,586 [112][121].

Research and Development - Lexaria incurred $696,178 in R&D expenditures for the quarter ended February 28, 2023, compared to $275,686 in the same quarter of 2022, reflecting a significant increase in investment in research activities [80]. - Lexaria's primary research program is focused on investigating CBD for the reduction of hypertension, with an IND filing anticipated in late fiscal 2023 or early 2024 [81]. - The company anticipates increased expenditures related to ongoing R&D programs, particularly for clinical trials targeting hypertension, dementia, and diabetes [95]. - Research and development expenditures increased by $791,272 year-over-year, totaling $1,525,667 for the period ended February 28, 2023, focusing on DehydraTECH-CBD for hypertension treatment [102]. - Lexaria has engaged in contract R&D for third parties interested in evaluating DehydraTECH in their products, expanding its market reach [79]. Financial Performance - The company reported net losses of $3,079,944 and $3,452,155 for the six months ended February 28, 2023, and 2022, respectively, highlighting ongoing financial challenges [96]. - Net loss for the six months ended February 28, 2023, was $3,079,944, a decrease of $372,211 from the net loss of $3,452,155 in the same period of 2022 [100]. - Cash flows used in operating activities were $2,473,590 for the six months ended February 28, 2023, compared to $2,443,593 in the prior year, indicating a slight increase in cash used [106]. - The company incurred net losses of approximately $7.4 million and $4.2 million in the past two fiscal years, with expectations of continued significant expenditures for R&D and operational activities [110]. Intellectual Property - The company has 28 patents granted internationally and approximately 50 patents pending worldwide, indicating a strong focus on intellectual property development [73]. Drug Development - The FDA has agreed to Lexaria's proposal to pursue a 505(b)(2) NDA regulatory pathway for DehydraTECH-CBD, marking a significant step in the drug development process [81]. - Results from the hypertension study HYPER-H21-4 indicated a sustained drop in blood pressure in hypertensive patients following multiple weeks of oral CBD therapy [82]. - Lexaria's DehydraTECH technology improves the delivery of bioactive compounds, enhancing the absorption of CBD compared to pharmaceutical-grade alternatives [83]. Cash and Equity - As of February 28, 2023, the company had approximately $3.3 million in cash, expected to fund R&D programs, operating expenses, and capital expenditures for the next 12 months [99]. - The company has entered into an ATM Offering equity distribution agreement with Maxim Group LLC, allowing for the sale of shares with an aggregate offering price of up to $5,925,000 [98]. - The company has sold 34,652 shares under an ATM agreement for gross proceeds of $114,546 as of April 1, 2023, with $5,810,544 remaining eligible for sale [112]. Expenses - Legal and professional fees decreased by $168,007 during the period compared to the prior year, attributed to reduced patent and trademark filings [104]. - Other general and administrative expenses decreased by $363,000, with advertising and promotion costs down by $140,000 [105]. COVID-19 Impact - The company has not experienced any material impact from COVID-19 on its financial statements or operations to date [116].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 30, 2022 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 LEXARIA BIOSCIENCE CORP. (Exact name of registrant as specified in its charter) Nevada 20-2000871 State or other jurisdiction o ...

Research and Development - Lexaria incurred $752,095 in R&D expenditures for the quarter ended May 31, 2022, compared to $454,443 in May 2021, reflecting a year-over-year increase of approximately 65.6%[79] - The Company is advancing R&D activities in various areas, including cannabidiol for hypertension, nicotine for oral pouches, and antivirals for COVID-19[77] - Research and development expenditures increased by $663,387 to $1,486,489 for the nine months ended May 31, 2022, compared to $823,102 in 2021[119] - Cash flows used in operating activities increased by $792,000 for the nine months ended May 31, 2022, compared to the same period in 2021, primarily due to increased R&D expenditures[129] - The company expects to continue incurring losses in the short term as it executes its business plan and R&D expenditures[132] Clinical Studies - The HYPER-H21-4 human clinical hypertension study involves 60 volunteers and aims to evaluate the efficacy of DehydraTECH-CBD, with dosing concluding in July 2022[82] - In the HYPER-H21-3 study, DehydraTECH-CBD treatment significantly reduced pulmonary artery systolic pressure by about 5 mmHg or 41% overall (p=0.045) in male participants under hypoxic conditions[84] Financial Performance - The company reported a net loss of $5,870,492 for the nine months ended May 31, 2022, compared to a net loss of $2,861,483 for the same period in 2021, reflecting an increase of $3,009,009[119] - Revenue for the nine months ended May 31, 2022, was $144,247, a decline of $547,470 from $691,717 in the same period in 2021[119] - The company has incurred recurring losses and negative cash flows, with net losses of $5,870,492 for the nine months ended May 31, 2022[117] Cash and Funding - As of May 31, 2022, the company had approximately $7.0 million in cash and $8.1 million in working capital, sufficient to fund operations for the next twelve months[134] - The company requires substantial cash for developing and patenting intellectual property across various market segments, potentially costing millions of dollars for each segment[135] - Full commercial exploitation of all market opportunities will necessitate significant funding from existing or new relationships, increasing revenue streams, or liquidity sources such as equity sales or debt issuance[136] - Cash requirements will fluctuate based on research program results and the needs of each pursued industry segment[137] - The progress of each segment will depend on available cash sources to execute individual business plans[137] Intellectual Property - Lexaria's patent portfolio includes over 50 pending applications worldwide, with successful patents granted in the US, Australia, Europe, India, Mexico, and Japan[92] - The Company was granted US Patent 11,311,559 for enhanced delivery of antiviral agents, marking its 25th patent granted worldwide[95] - The company recognized $81,000 in capitalized patent costs for the nine months ended May 31, 2022, compared to $79,000 in the same period in 2021[112] Market Activities - Lexaria's common stock was uplisted to the Nasdaq Capital Market under the symbol "LEXX" effective January 12, 2021[99] - The Company completed a public offering on January 14, 2021, issuing 2,102,856 shares at $5.25 per share, resulting in net proceeds of $9,471,497[98] - Lexaria CanPharm completed the sale of its DehydraTECH technology rights for C$350,000 cash, a C$2,000,000 promissory note, and C$1,500,000 in shares[102] - The company anticipates increased licensing revenues in late 2022 and early 2023 as new licensees introduce products using DehydraTECH technology[122] Technology and Product Development - The DehydraTECH formulation delivered 74% more sildenafil into the bloodstream on average than the concentration-matched generic control formulation within four minutes after dosing[88] - Lexaria's DehydraTECH technology improves the delivery of bioactive compounds, enhancing the transport of Active Pharmaceutical Ingredients to the blood plasma and brain[76]

R&D Activities - Lexaria incurred $275,213 in R&D expenditures for the quarter ended February 28, 2022, compared to $176,398 in February 2021, reflecting a 56% increase year-over-year[75]. - The company is advancing several R&D activities, including a human clinical trial for cannabidiol (CBD) initiated in Q3 2022, and three human clinical trials concluded in calendar 2021[74]. - In February 2022, results from the PDE5-A21-1 animal study showed that the DehydraTECH formulation delivered 74% more sildenafil into the bloodstream compared to the generic control formulation[80]. - The HYPER-H21-4 study, initiated in April 2022, aims to evaluate the efficacy of DehydraTECH-CBD in treating hypertension with 60 volunteers participating[76]. - The company reported successful results from its HYPER-H21-2 human study of DehydraTECH-CBD in arterial stiffness in September 2021[76]. - The company continues to report progress on its R&D programs through public releases and filings, with results available on its website[82]. Financial Performance - For the six months ended February 28, 2022, the company reported a revenue of $44,530, a significant decline of $443,132 compared to $487,662 in the same period of 2021[111]. - Research and development expenditures increased by $365,736 to $734,395 for the six months ended February 28, 2022, compared to $368,659 in the prior year[111]. - The net loss for the six months ended February 28, 2022, was $3,452,156, which is an increase of $3,135,225 from a net loss of $316,931 in the same period of 2021[111]. - Cash flows used in operating activities increased by $723,000 for the six months ended February 28, 2022, compared to the same period in 2021, primarily due to increased expenditures on R&D and professional fees[119]. - The company anticipates increased expenditures related to ongoing R&D programs, particularly for clinical trials of DehydraTECH formulations, leading to expected operating losses and negative cash flows in the foreseeable future[107]. Cash and Assets - As of February 28, 2022, the company had cash and cash equivalents of approximately $8.4 million, which is expected to be sufficient to fund operations for the next 12 months[125]. - The company’s current assets decreased to $10,572,202 as of February 28, 2022, from $12,442,940 as of August 31, 2021[118]. - The company’s working capital as of February 28, 2022, was $10,406,660, down from $12,289,664 as of August 31, 2021[118]. Funding and Capital Concerns - The company has incurred recurring losses and negative cash flows from operations, with a net capital deficiency raising doubts about its ability to continue as a going concern[109]. - The company expects to continue evaluating various funding alternatives to maintain operations and expand its patent portfolio[123]. Stock and Market Activity - The company received net proceeds of $9,471,497 from a public offering that closed on January 14, 2021, involving the issuance of 2,102,856 shares priced at $5.25 each[91]. - Lexaria's common stock was uplisted to the Nasdaq Capital Market under the symbol "LEXX" effective January 12, 2021, after delisting from the Canadian Securities Exchanges[92]. Impact of COVID-19 - The COVID-19 pandemic has increased risks of lower revenues and higher losses, although the company has not experienced a material impact on its financial statements to date[96]. Patent Portfolio - Lexaria's patent portfolio includes over 50 applications pending worldwide, with successful patents granted in the US, Australia, Europe, India, Mexico, and Japan[84].

Research and Development - Lexaria incurred $458,709 in R&D expenditures for the quarter ended November 30, 2021, compared to $192,261 in November 2020, reflecting a significant increase in investment in research activities [78]. - The company is advancing several R&D programs, including a human clinical trial for cannabidiol (CBD) aimed at reducing hypertension, with three trials completed in 2021 and another planned for Q2 2022 [77]. - Lexaria reported successful results from its HYPER-H21-2 human study of DehydraTECH-CBD, and received approval for the HYPER-H21-4 study, which will involve 60 volunteers over a 6-week period [79]. - Research and development expenditures increased by $266,448 to $458,709 for the period ended November 30, 2021, reflecting ongoing clinical trials for DehydraTECH formulations [107][110]. - The company anticipates increased operating losses and negative cash flows due to ongoing R&D programs and clinical trials [104]. Financial Performance - For the three months ended November 30, 2021, the company reported revenue of $13,880, a significant decline of 95.3% compared to $295,656 for the same period in 2020 [107]. - The net loss for the three months ended November 30, 2021, was $2,003,482, an increase of 182.5% from the net loss of $710,121 in the same period in 2020 [107]. - General and administrative expenses rose by $501,534 to $673,365, primarily due to an unrealized loss on marketable securities and non-cash stock-based compensation [111]. - The company has consistently incurred recurring losses and negative cash flows from operations, raising doubts about its ability to continue as a going concern [106]. Assets and Liquidity - The company had cash and cash equivalents of approximately $9.7 million as of November 30, 2021, expected to fund operations for the next 12 months [119]. - Current assets decreased from $12,442,940 on August 31, 2021, to $10,901,396 on November 30, 2021, indicating a decline in liquidity [113]. Business Operations - The company has made modifications to operations due to COVID-19, requiring remote work and adjusting business activities, although no material impact on financial statements has been reported [94][95]. - Licensing revenue from intellectual property was significantly impacted by delays in customer rollouts and the effects of COVID-19, leading to a decline in usage fees [108]. - The company plans to evaluate various funding alternatives to maintain operations and expand its patent portfolio, with no assurance of favorable terms [118]. Intellectual Property and Market Position - The company has over 50 patent applications pending worldwide and has received its first patent approval in Mexico during the quarter ended November 30, 2021 [84]. - Lexaria's technology, DehydraTECH, enhances the delivery of bioactive compounds and is applicable across various categories, including pharmaceuticals, foods, beverages, and cosmetics [76]. - The company is focusing on pharmaceutical applications, with an increasing proportion of resources allocated to this area as highlighted in the fiscal 2022 first quarter [78]. Stock and Capital Market Activity - Lexaria's common stock was uplisted to the Nasdaq Capital Market under the symbols "LEXX" and "LEXXW" effective January 12, 2021, following a reverse stock split [89]. - The company completed a public offering on January 14, 2021, issuing 2,102,856 shares at $5.25 per share, resulting in net proceeds of $9,471,497 after fees [88]. - Lexaria's asset sale on December 9, 2020, involved the licensing rights of its DehydraTECH technology for non-pharmaceutical products, generating C$350,000 in cash and a promissory note of C$2,000,000 [92][93].

Financial Performance - Revenue for the year ended August 31, 2021, was $722,738, an increase of 88% from $384,543 in 2020[245]. - Total revenues for the year ended August 31, 2021, were $722,738, an increase of 88% from $384,543 in 2020[379]. - Licensing revenues increased by over 40% to $334,974 in 2021, compared to $232,909 in 2020[250]. - The primary source of revenue, Lexaria Hemp, saw a 153% increase in B2B processing sales, contributing approximately 53% of total annual revenues[247]. - Gross profit for the year was $547,392, compared to $215,415 in the previous year, reflecting a significant improvement in profitability[292]. - Licensing revenue reached $334,974 in 2021, up from $232,909 in 2020, while B2B product revenues increased to $383,179 from $151,634[380]. Expenses and Losses - Research and development expenses increased significantly to $1,262,895 in 2021 from $387,074 in 2020, reflecting a rise of 226%[245]. - General and administrative expenses increased by $988,645 to $3,982,704 in the year ended August 31, 2021, driven by increased marketing and investor relations efforts[256]. - Total operating expenses increased to $6,234,244 in 2021 from $4,364,212 in 2020, primarily due to higher research and development costs[293]. - The company incurred significant net losses of approximately $4.2 million and $4.1 million for the two years ended August 31, 2021, and August 31, 2020, respectively[262]. - The net loss for the year was $4,186,148, slightly higher than the net loss of $4,084,613 in 2020, with a loss per share of $0.95 compared to $1.47 in the prior year[293]. - The company anticipates continued operational expenses and net losses in the upcoming 12 months, influenced by the complexity of R&D studies and licensing agreements[304]. Funding and Cash Position - Lexaria raised approximately $15 million in funding during fiscal 2021, enabling the completion of ten studies and the initiation of seven additional studies[233]. - The company maintained a positive working capital position despite increased expenditures, particularly in R&D programs[266]. - As of August 31, 2021, the company had cash and cash equivalents of approximately $10.9 million to settle $153,276 of current liabilities[264]. - Cash and cash equivalents at the end of the year were approximately $10.9 million, up from $1.3 million at the end of 2020, indicating improved liquidity[296]. - The company raised $9,471,497 from a public offering and $4,015,043 from warrant exercises during the fiscal year[305]. Research and Development - Lexaria plans to initiate Investigational New Drug trials for DehydraTECH in the US during fiscal 2022, focusing on hypertension and antiviral drug delivery[254]. - Research and development expenses surged to $1,262,895 in 2021, up from $387,074 in 2020, highlighting the company's focus on innovation[293]. - Research and development costs are expensed as incurred, including both in-house and third-party contract expenditures[339]. Intellectual Property - The company has over 50 patents pending internationally, reflecting progress in building its intellectual property portfolio[259]. - The company plans to pursue technology licensing opportunities to generate profitable revenue streams and has multiple patent applications pending globally[234]. - The company reported a total patent balance of $364,623 as of August 31, 2021, up from $292,000 in 2020, reflecting an addition of $79,493 during the year[355]. Operational Changes - The company discontinued its direct-to-consumer demonstration products to focus on B2B production, closing its web sales platform[248]. - The company has established relationships with several consumer products companies in the CBD and nutraceuticals sectors, leveraging its proprietary DehydraTECH technology[302]. Assets and Liabilities - Total assets as of August 31, 2021, were $13,266,817, significantly higher than $2,828,238 in 2020[383]. - The working capital balance increased substantially to $12,289,664 in 2021 from $1,700,044 in 2020[265]. - Accounts payable and accrued liabilities totaled $100,723 as of August 31, 2021, compared to $86,920 in 2020, indicating an increase of approximately 15.5%[357]. - The company has lease liabilities totaling $89,393 as of August 31, 2021, down from $125,431 in 2020[386]. Stock and Equity - The company completed a public offering of 2,102,856 units at $5.25 each, resulting in net proceeds of $9,471,497 after fees[360]. - A total of 610,189 common shares were issued from warrant exercises, generating proceeds of $4,015,043 during the fiscal year[361]. - The company granted 300,000 warrants with an exercise price of $9.00, valued at $785,895, as part of consulting agreements[361]. - The company established an Equity Incentive Plan allowing for up to 510,433 stock options to be granted, reflecting an increase of 249,143 options[370]. - The company granted stock options totaling 84,900 at an exercise price of $5.41 during the year ended August 31, 2021[373]. - The intrinsic value of stock options that vested during the fiscal year was $68,713, based on the closing stock price exceeding the exercise price[377]. - The company reported a balance of 2,447,275 warrants outstanding as of August 31, 2021, with a weighted average exercise price of $8.00[368].

Research and Development - The company incurred $454,443 in R&D expenditures for the quarter ended May 31, 2021, compared to $24,577 in May 2020, indicating a significant increase in investment in research and development [96]. - The company plans to use approximately $3,700,000 of the net proceeds from its public offering for research and development studies and associated patent and legal costs [87]. - The company is exploring methods to integrate nanoemulsification chemistry techniques with its technology to enhance intestinal bioabsorption rates [97]. - The company has conducted in vitro and in vivo absorption tests of its DehydraTECH technology with positive results for molecules such as CBD and ibuprofen [98]. - R&D expenditures increased by $504,525 for the period ended May 31, 2021, as the company undertook several studies within its applied research and development program [117]. - The company anticipates ongoing operating losses and negative cash flows for the foreseeable future, driven by increased R&D expenses related to clinical trials [108]. Patents and Technology - The company currently has over 50 patent applications pending worldwide and has been granted 20 patents to date, with the latest patent issued in Japan on July 13, 2021 [78][79]. - The company is focusing on developing strategic partnerships for its patented DehydraTECH technology, aiming for upfront and staged licensing fees and royalty payments over time [77]. - The company reported positive results from its CBD DehydraTECH 2.0 enhanced formulations during the second quarter ended May 31, 2021, with ongoing testing to further define absorption rates and delivery formats [99]. Financial Performance - The company reported a net loss of $2,861,483 for the nine months ended May 31, 2021, compared to a net loss of $3,286,033 for the same period in 2020, reflecting a decrease in loss of $424,550 [112]. - Revenue increased significantly to $691,717 for the nine months ended May 31, 2021, up from $250,804 in the same period in 2020, marking an increase of $440,913 [111]. - Product revenues were $360,558 and licensing usage fees were $326,474, indicating substantial growth in intermediate product sales during the period [113]. - The company's working capital increased to $9,464,343 as of May 31, 2021, compared to $1,700,044 as of August 31, 2020, due to an underwritten public offering [119]. - Cash flows used in operating activities increased by $984,240 for the period compared to the same period in 2020, primarily due to higher professional fees and costs related to the NASDAQ listing [121]. - The company had cash and cash equivalents of approximately $8.1 million as of May 31, 2021, which is expected to fund operations into the third quarter of fiscal 2022 [110]. Market Activity - The company's common stock began trading on the Nasdaq Capital Market under the symbols LEXX and LEXXW effective January 12, 2021 [88]. - The company closed an underwritten public offering on January 12, 2021, for net proceeds of $9,471,495, issuing 1,828,571 units [126]. Operational Changes - The company has made modifications to its operations due to COVID-19, requiring team members to work remotely, which may impact business activities [92][93]. - Legal and professional fees rose by $240,162 during the period, primarily due to increased patent and trademark filings and advisory services [119].

Intellectual Property and Patents - The company has over 60 patent applications pending worldwide, with 18 patents granted to date[77][82]. - The company is investigating national and international opportunities for expanding its intellectual property portfolio[80]. - The company has filed for patent protection for additional compounds, including phosphodiesterase inhibitors and antivirals[84]. - The company is focused on developing strategic partnerships for its patented DehydraTECH technology in exchange for licensing fees and royalties[80]. Financial Performance - The Company reported a revenue of $487,662 for the six months ended February 28, 2021, compared to $99,631 for the same period in 2020, reflecting an increase of $388,031[124]. - Product revenues amounted to $231,718, while licensing usage fees reached $255,844, indicating significant growth in intermediate product sales and related licensing fees[125]. - The net loss for the six months ended February 28, 2021, was $316,931, a decrease of $1,605,324 compared to a net loss of $1,922,255 for the same period in 2020[124]. - For the period ended February 28, 2021, the company reported intellectual property licensing revenue of $231,718, up from $64,184 in the previous year, and product revenues of $255,844, compared to $99,191 in 2020[128]. Research and Development - During the quarter ended February 28, 2021, the company announced significant improvements in drug delivery using DehydraTECH technology, with a 54% improvement for Darunavir and a 16% improvement for Efavirenz[85][86]. - The company plans to conduct additional human clinical studies in 2021 related to hypertension, focusing on the effectiveness of DehydraTECH-processed CBD[80][85]. - The Company is conducting multiple studies on the pharmacokinetic benefits of its DehydraTECH technology, with results expected in the coming months[111]. - The Company is exploring new R&D programs to enhance its technology and expand product applications, which may lead to significant variations in R&D budgets[114]. Funding and Capital - The company raised approximately $9,629,490 from a public offering of 1,828,571 shares at a price of $5.25 per share, with plans to allocate $3,700,000 for research and development[91][93]. - The Company anticipates that the net proceeds of $9,471,495 from a public offering will fund operations for at least the next twelve months[123]. - The company is evaluating various funding alternatives to maintain operations and expand its patent portfolio, with no assurance that adequate funding will be available[139]. - Net cash provided from financing activities was $9,448,322, primarily from an underwritten public offering that closed on January 12, 2021[137]. Operational Changes and Expenses - A reverse stock split of 1-for-30 was executed to meet Nasdaq's minimum stock price requirement[89]. - The Company has implemented cost containment initiatives, including the dismissal of one employee and the termination of contracts with two consultants[99]. - General and administrative expenses increased by $134,582 during the period, primarily due to outreach programs, patent filings, and contracted incentive payments[129]. - Professional fees increased by $72,645 during the period due to increased patent and trademark filings and advisory services[132]. Cash Flow and Working Capital - The company's working capital increased significantly to $10,559,499 as of February 28, 2021, compared to $1,700,044 on August 31, 2020, marking the highest working capital in the company's history[132]. - The company had $9,346,933 in cash and cash equivalents as of February 28, 2021, projecting sufficient resources to continue operations for at least the next twelve months[140]. - Cash flows used in continuing activities were $1,742,757 for the period, compared to $1,308,963 in the same period in 2020, largely due to increased professional fees and other costs[135]. Future Outlook - The company expects to continue incurring losses in the short term as it executes its business plan focused on research and development expenditures[138]. - The Company closed the sale of its non-pharmaceutical THC-related assets for C$350,000 in cash and additional equity payments, totaling C$2,000,000 in promissory notes[97]. - The Company received CDN$40,000 from the Canada Emergency Business Account and $30,732 (CDN$42,076) from the Canada Emergency Wage Subsidy program[106].

Intellectual Property and Technology - The company has more than 50 patent applications pending worldwide and has been granted 18 patents to date[80] - The company is pursuing strategic partnerships for its patented DehydraTECH technology in exchange for licensing fees and royalty payments[78] - The company is actively seeking additional patent protection for unique processes related to oral delivery of cannabinoids, nicotine, NSAIDs, and vitamins[82] - The DehydraTECH technology significantly improved delivery of antiviral drugs in study animals, with a 54% improvement for the Protease Inhibitor Darunavir[86] - The company is investigating opportunities related to COVID-19 and the applicability of DehydraTECH technology for antiviral drug delivery[91] Financial Performance - The Company reported revenue of $295,656 for the three months ended November 30, 2020, a significant increase of $285,324 compared to $10,332 in the same period of 2019[110] - Product revenues of $164,990 accounted for more than half of total revenues, primarily from intermediate product sales to business customers[111] - The Company incurred $192,261 in research and development expenditures during the quarter, up from $107,463 in 2019[99] - The net loss for the period was $710,121, an improvement of $214,642 compared to a net loss of $924,763 in the prior year[110] - The Company maintained a positive working capital of $1,065,239 as of November 30, 2020, despite a decrease from $1,700,044 at the end of August 2020[121] - Cash flows used in operating activities increased to $818,300 for the period, compared to $555,078 in the same period in 2019[124] - The Company had $525,341 in cash and cash equivalents as of November 30, 2020, and believes this is sufficient to continue operations for at least the next twelve months[129] Business Operations and Strategy - The company entered into an asset sale agreement for non-core THC-related business assets for gross proceeds of C$3.85 million[84] - The Company closed the sale of its non-pharmaceutical THC-related assets for C$350,000 in cash and a promissory note of C$2,000,000[96] - The Company closed an underwritten public offering for $11,039,994, issuing 2,102,856 units at $5.25 each[98] - The company has implemented cost containment initiatives, including employee dismissals and contract terminations, due to COVID-19[89] - The company is focusing on reducing less healthy administration methods, such as smoking, through the development of safe oral nicotine dosage forms[80] Future Plans - The company plans to conduct additional human clinical investigations in early 2021 related to enhanced DehydraTECH formulations[78] - The company has not experienced significant impacts on material supply chains but noted increased timelines from third-party research facilities[90]