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].
Lexaria Bioscience(LEXX) - 2020 Q3 - Quarterly Report