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]

Revenue Performance - For the year ended August 31, 2020, the company reported revenue of $384,543, an increase of $161,933 compared to $222,610 in 2019[318]. - Licensing revenue accounted for $232,909 of total revenue, up from $198,000 in 2019, while product and other revenues increased to $151,634 from $24,610[320]. - Total revenue for the year ended August 31, 2019 was $222,610, down from $433,287 in 2018, reflecting a decrease of 48.6%[329]. - Licensing revenues accounted for $198,000 of total revenues, primarily due to delays in usage fee revenues from existing licensees in Canada[330]. - The company anticipates continued revenue generation from technology licensing, with expectations for increased usage fees as licensees ramp up production[336]. Net Loss and Financial Position - The net loss for the year was $4,084,613, a slight improvement from the net loss of $4,158,413 in 2019, reflecting a change of $73,800[318]. - The company reported a net loss attributable to common shareholders of $3,933,996 for the year ended August 31, 2020, a slight improvement from the previous year's loss of $4,099,420[348]. - For the year ended August 31, 2019, the company reported a net loss of $4,158,413, a decrease of 37% compared to a net loss of $6,609,186 in 2018[329]. Working Capital and Cash Position - The company had a working capital surplus of $1,700,044 as of August 31, 2020, compared to $1,634,322 in 2019, indicating a positive working capital position[324]. - The company had a working capital balance of $1,634,322 as of August 31, 2019, a decrease from $2,240,411 in 2018[342]. - The company maintained a cash position of $1,293,749 as of August 31, 2020, with an estimated requirement of $2.0 million to finance planned expenditures for the upcoming year[297]. Operating Activities and Expenses - Cash flows used in operating activities decreased to $2,663,281 in 2020 from $3,005,555 in 2019, primarily due to reduced costs in advertising and R&D[326]. - Net cash used in operating activities was $3,005,555 for the year ended August 31, 2019, compared to $2,517,979 in 2018, indicating an increase of 19.3%[344]. - General and administrative expenses decreased by $2,659,158 to $4,358,130 in 2019, largely due to reduced non-cash expenses[338]. Future Plans and Funding - Estimated funding required for the next 12 months is approximately $3,305,000, with significant allocations for consulting fees ($1,200,000) and R&D ($650,000)[296]. - The company plans to focus on technology licensing in the nicotine and pharmaceutical sectors, with an emphasis on expanding R&D for DehydraTECH applications[297]. - The company plans to conduct additional studies to test the absorption of various molecules, which could enhance the acceptance of DehydraTECH technology[315]. - The company has six revenue-generating agreements with licensees and is pursuing additional licensing opportunities in the cannabinoids and nicotine markets[313]. - The company expanded its number of licensees from 1 to 9 over the two-year period ending August 31, 2019, indicating significant growth in licensing agreements[331]. Financing Activities - Cash flows from financing activities increased to $3,332,683 in 2019, compared to $1,867,224 in 2018, reflecting a growth of 78.3%[346].

Financial Performance - Revenue for the nine months ended May 31, 2020, was $250,804, an increase of $153,315 compared to $97,489 in the same period of 2019[121]. - Product revenues of $119,691 represented almost half of total revenues during the period, primarily from intermediate product sales[122]. - Licensing revenue was $130,509, reflecting delays due to product approval processes and the impact of the COVID-19 pandemic[123]. - The company's net loss for the nine months ended May 31, 2020, was $3,312,908, compared to a net loss of $3,042,438 in the same period of 2019[121]. - Cash flows used in operating activities were $1,981,314 for the period, an improvement from $2,268,946 in the same period of 2019[133]. Research and Development - The company commenced research on the benefits of its DehydraTECH Technology for enhancing the delivery of certain antiviral drugs[96]. - A new US patent application was filed for "Compositions and Methods for Enhanced Delivery of Antiviral Agents" to combat infectious diseases including COVID-19[97]. - A pilot human pharmacokinetic exploratory study is planned to compare DehydraTECH formulations to controls without the technology[104]. - The company incurred $318,830 in research and development expenditures for the period ending May 31, 2020, down from $394,091 in 2019[110]. COVID-19 Impact - The COVID-19 pandemic has presented significant risks, potentially leading to lower revenues and higher losses[100]. - The company continues to monitor governmental programs related to the COVID-19 pandemic[105]. - The COVID-19 pandemic has not materially impacted internal controls, aside from increased remote working requirements[147]. Financial Position - Current assets increased to $2,528,111 as of May 31, 2020, compared to $1,818,829 in 2019, resulting in a net working capital of $2,408,383[131]. - The company had $2,034,011 in cash and cash equivalents as of May 31, 2020, sufficient to continue operations for at least the next seven months[138]. - The company maintained a positive working capital position throughout the period, supported by private placements and option exercises[131]. Operational Changes - The company amended its license agreement with Universal Hemp LLC, reducing minimum performance fees from $3,750,000 to $132,500[95]. - The company terminated a license for THC-based beverages originally announced on April 24, 2019[99]. - Cost containment initiatives were implemented, including the dismissal of one employee and termination of contracts with two consultants[101]. - The company has not experienced significant impacts on material supply chains but noted increased timelines from some research facilities[102]. Internal Controls - Management assessed the effectiveness of internal control over financial reporting as of May 31, 2020, concluding it is effective in providing reasonable assurance regarding reliability of financial reporting[144]. - No changes in internal controls over financial reporting occurred during the quarter ended May 31, 2020, that materially affect the controls[146]. - There are no material, existing or pending legal proceedings against the company[148].

¨ RANSITION 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. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Exact name of registrant as specified in its charter) (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 29, 2020 or (Address of principal executive offices) (Zip Code) Regist ...

Revenue and Growth - For the period ended November 30, 2019, the company reported total revenue of $62,082, an increase of 179.5% compared to $22,209 for the same period in 2018[93]. - Licensing revenues accounted for $51,750 of total revenues, reflecting delays in usage fee revenues from existing licensees awaiting product approval from Health Canada[94]. - The company expects increases in revenues during the 2020 calendar year as licensees ramp up production[95]. Expenses and Losses - General and administrative expenses increased by $223,372 to $978,992, primarily due to non-cash expenses related to share-based payments[97]. - The net loss for the period was $924,763, compared to a net loss of $701,391 in the previous year, indicating increased operational costs[93]. - Consulting fees increased by $242,991, primarily due to non-cash share-based payments of $233,166[99]. - Net cash used in operating activities was $762,845, compared to $564,314 in the same period of 2018, reflecting increased consulting and staff wage costs[102]. - The company expects to continue incurring losses in the short term due to ongoing research and development expenditures[105]. Research and Development - Research and development expenditures for the period were $107,463, up from $96,973 in 2018, indicating ongoing investment in R&D[82]. - The company plans to conduct in vivo absorption tests on CBD, which have yielded positive results in preliminary testing[83]. - Significant funding will be required to achieve objectives for developing and patenting intellectual property, potentially amounting to millions of dollars[108]. Financial Position - The company has no debt other than month-to-month receivables, indicating a strong liquidity position[98]. - Current assets as of November 30, 2019, were $1,911,485, up from $1,818,829 on August 31, 2019[100]. - Net working capital increased to $1,781,256 from $1,634,322, indicating a positive working capital position[100]. - As of November 30, 2019, the company had $1.3 million in cash and cash equivalents, sufficient for at least the next six months[107]. Capital Raising and Funding - The company closed a private placement of 1,823,745 units at $0.45 each, raising capital for future operations[78]. - Net cash provided from financing activities was $706,704, down from $1,649,190 in the same period of 2018[104]. - The company will evaluate various funding alternatives to maintain operations and expand its patent portfolio, with no assurance of favorable terms for additional funding[106]. Intellectual Property - The company has over 50 patent applications pending worldwide, demonstrating a strong focus on intellectual property protection[71].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended August 31, 2019 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 000-52138 LEXARIA BIOSCIENCE CORP. (Exact name of registrant as specified in its charter) | Nevada | 20-2000871 | | --- | --- | | State or other ju ...