What changed in this filing

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Item 9A. Controls and Procedures

2021-11-29 compared with 2020-10-15 · 215 added, 183 removed, 247 unchanged (62% of the section changed)

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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 Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our President and Chief Executive Officer (also our Principal Executive Officer) and our Chief Financial Officer (also our Principal Financial and Accounting Officer) to allow for timely decisions regarding required disclosure.

As of August 31, 2020, the end of our fiscal year covered by this report, we carried out an evaluation, under the supervision and with the participation of our President and Chief Executive Officer and Chief Financial Officer (also our Principal Executive and Financial Reporting and Accounting Officers), of the effectiveness of the design and operation of our disclosure controls and procedures.

Based on the foregoing, our President, Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this annual report.

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 Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (also our Principal Executive Officer) and our Chief Financial Officer (also our Principal Financial and Accounting Officer) to allow for timely decisions regarding required disclosure.

As of August 31, 2021, the end of our fiscal year covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer (also our Principal Executive and Financial Reporting and Accounting Officers), of the effectiveness of the design and operation of our disclosure controls and procedures.

Based on the foregoing, our Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this annual report.

Management’s Report on Internal Control over Financial Reporting

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Our management assessed the effectiveness of our internal control over financial reporting as of August 31, 2021.

In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework.

Our management has concluded that, as of August 31, 2020, our internal control over financial reporting are effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with US generally accepted accounting principles.

In making this assessment, our management used the criteria set forth in the report entitled “ Internal Control — Integrated Framework ” published by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Our management has concluded that, as of August 31, 2021, our internal control over financial reporting is effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with US generally accepted accounting principles.

Our management reviewed the results of their assessment with our Board of directors.

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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.

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Changes in Internal Control over Financial Reporting

During the year ended August 31, 2020 our controls and controls processes during the period were updated and revised based on personnel changes to our Company.

The fundamental control processes remained consistent with prior years.

The fundamental controls and control processes remained consistent with prior years during the year ended August 31, 2021.

In April 2021, the former CFO Mr.

Allan Spissinger was replaced by the former controller, Mr.

Greg Downey which required some of our controls and controls processes to be temporarily revised and updated based on personnel changes within the Company.

There have been no changes in our internal controls over financial reporting that occurred during the year ended August 31, 2021, that have materially or are reasonably likely to materially affect our internal controls over financial reporting.

Other Information

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Directors, Executive Officers and Corporate Governance

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Chairman, Chief Executive Officer, and Director

October 26, 2006

February 14, 2007

John Docherty

President and

April 15, 2015

April 29, 2016

Allan Spissinger

President and Director

Gregory Downey

Chief Financial Officer

1 unchanged sentence

Ted McKechnie

September 16, 2015

Al Reese, Jr.

Allan Spissinger

Former Chief Financial Officer

Brian Quigley

August 14, 2019

Former Director

Business Experience

The following is a brief account of the education and business experience of each director and executive officer during the past five years, indicating each person's principal occupation during the period, and the name and principal business of the organization by which he was employed.

The following is a brief account of the business and education experience of each current director and executive officer during the past five years, indicating each person's principal occupation during the period.

Christopher Bunka – Chairman, Chief Executive Officer and Director

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He is a named inventor on some of Lexaria’s pending patents.

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Since 1988, Mr.

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He is a venture capitalist and corporate consultant.

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John Docherty – President and Director

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He has served as a director of Lexaria since April 29, 2016.

Allan Spissinger – Chief Financial Officer

Prior to concentrating on finance and accounting, Mr.

Spissinger worked within the Informational Technologies (IT) sector for over a decade;

specializing in corporate IT infrastructure and software development projects.

Spissinger joined the audit and assurance department at PricewaterhouseCoopers (PwC) where he obtained his Chartered Professional Accountant (CPA) designation focusing on financial reporting and Sarbanes-Oxley (SOX) compliance in the following sectors:

resources, manufacturing and technologies.

Spissinger joined Lexaria in September 2014 as a corporate controller.

His positive mentorship, excellent communication and extensive leadership skills have enabled him to successfully manage a variety of private businesses for over 20 years.

Gregory Downey – Chief Financial Officer

Downey joined the Company in January 2019 as Controller and accepted the position of Chief Financial Officer in April 2021.

Downey brings over 35 years of diverse financial experience in the mining, oil and gas, manufacturing, construction, and public sectors as well as providing business advisory and financial accounting services to many mid-sized organizations.

In addition, Mr.

Downey has a wide range of executive corporate experience having acted as the Chief Financial Officer and director of various public companies.

Downey obtained his Certified Management Accountant (CMA) designation in 1992 and is a member of the Chartered Professional Accountants (CPA) of British Columbia.

He holds a diploma in Business Administration from the Southern Alberta Institute of Technology.

Nicholas Baxter - Director

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In the past, Mr.

McKechnie was president of Maple Leaf Foods, an owner and senior executive at Humpty Dumpty and a senior leader at Pepsi Co.

McKechnie was president of Maple Leaf Foods, an owner and senior executive at Humpty Dumpty Snack Foods and a senior leader at Pepsi Co.

After a distinguished career as an executive and marketer specializing in food manufacturing, he now focuses on moving the Canadian food sector into the future.

Besides being the chairman of Food Starter’s board, Mr.

Aside from being the chairman of Food Starter’s board, Mr.

McKechnie is also the Chairman/CEO of The Davies Group and William Davies Consulting Inc.

McKechnie is also a chairman of the board for Advanced Technology For Food Manufacturing, serves on the Board Of Governors for St Jeromes University and the Director of Lexaria Bioscience Corporation.

McKechnie is also a chairman of the board for Advanced Technology For Food Manufacturing, serves on the Board Of Governors for St Jerome’s University.

McKechnie is often called upon by think tanks, the government and industry leaders to offer insights on how to grow the food sector and add more value to the Canadian economy.

Brian Quigley - Director

Quigley has been a senior Consumer Packaged Goods executive for over 20 years of Brand Building, Marketing, Operations, Leadership and General Management experience leading business transformations that deliver shareholder returns for public and private equity investors.

Quigley is one of the founders of Green Sky Strategy.

Before founding Green Sky, he spent 16 years at the Altria Group, with 7 years as President & CEO for U.S.

Smokeless Tobacco and Nu-Mark, Altria’s innovation Company.

In his time at Altria, Brian spearheaded the companies Harm Reduction strategies and worked to deliver results by creating change in the U.S.

Tobacco business.

Prior to Altria, Brian held branding and leadership roles with several companies, including Pinnacle Foods Corporation, International Home Foods, which is now part of ConAgra, Inc., and in the advertising industry.

Brian has launched dozens of new products, created consumer focused innovation strategies and built businesses and cultures that deliver results.

Brian is motivated by helping to change lives with meaningful brands.

Reese has over 40 years experience in public and private businesses including as CFO of a formerly Nasdaq-listed energy company where he arranged finance transactions totaling over $10 billion dollars during his 20-year tenure.

Reese was a Director and Chairman of the Audit Committee of a community bank in Texas for ten years until such time as it was acquired by a larger banking group in 2018 and currently serves as an Independent Director and Chairman of the Audit Committee for a privately held insurance company headquartered in The Woodlands, Texas.

He has directed over 50 acquisitions and financings from as small as a few hundred thousand dollars to multibillion dollar transactions in both the domestic and international arenas.

He has directed or participated in numerous due diligence examinations, both domestic and foreign and has held the responsibility for integrating the finance, accounting and managerial practices for acquisitions and dispositions in both domestic and foreign operations in both public and private companies.

Reese is a Certified Public Accountant (1974), and received his Bachelor of Business Administration degree from Texas A&M University in 1971, and his MBA from University of Houston in 1977.

Family Relationships

There are no family relationships among any of our directors or officers.

There are no family relationships among any of our officers or directors.

Involvement in Certain Legal Proceedings

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The subject of any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:

Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity

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Engaging in any type of business practice;

Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws.

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Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;

The subject of any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity.

Found by a court of competent jurisdiction in a civil action or by the SEC to have violated any Federal or State securities law, and the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended, or vacated.

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Executive officers, directors and greater than 10% shareholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports that they file.

Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during fiscal year ended August 31, 2020, all filing requirements applicable to our officers, directors and greater than 10% percent beneficial owners were complied with.

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Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during fiscal year ended August 31, 2021, all filing requirements applicable to our officers, directors, and beneficial owners of greater than 10% percent were complied with.

Code of Ethics

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If we make any amendments to our Code of Ethics other than technical, administrative, or other non-substantive amendments, or grant any waivers, including implicit waivers, from a provision of our Code of Ethics to our Chief Executive Officer, Chief Financial Officer, or certain other finance executives, we will disclose the nature of the amendment or waiver, its effective date and to whom it applies in a Current Report on Form 8-K filed with the SEC.

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Board and Committee Meetings

Our board of directors held four formal meetings and several informal meetings during the year ended August 31, 2020.

All proceedings of the board of directors taken at a formal meeting.

evidenced by way of minutes taken at such meeting.

Our board of directors held six (6) formal meetings and several informal meetings during the year ended August 31, 2021.

All proceedings of the board of directors taken at a formal meeting were evidenced by way of minutes taken at such meetings.

All other matters approved by the board of directors outside of any formal meeting were evidenced by resolutions consented to by all the directors.

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Nomination Process

As of August 31, 2020, we did not effect any material changes to the procedures by which our shareholders may recommend nominees to our board of directors.

Our board of directors does not have a policy with regards to the consideration of any director candidates recommended by our shareholders.

Our board of directors has determined that it is in the best position to evaluate our company’s requirements as well as the qualifications of each candidate when the board considers a nominee for a position on our board of directors.

If shareholders wish to recommend candidates directly to our board, they may do so by sending communications to the president of our Company at the address on the cover of this annual report.

Audit Committee and Audit Committee Financial Expert

Currently our audit committee consists of Chris Bunka, Ted McKechnie and Nicholas Baxter.

We currently do not have a nominating committee, or a committee performing similar functions.

There has not been any defined policy or procedure requirements for shareholders to submit recommendations or nomination for directors.

Our board of directors has determined that it does not have a member of its board of directors (audit committee) that qualifies as an "audit committee financial expert" as defined in Item 407(d)(5)(ii) of Regulation S-K, and is "independent" as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as amended.

We believe that the members of our audit committee are collectively capable of analyzing and evaluating our consolidated financial statements and understanding internal controls and procedures for financial reporting.

The audit committee is governed by the audit committee charter, the most recent version having been adopted on May 1, 2019.

We believe that retaining an independent director who would qualify as an "audit committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the fact that we have not generated any material revenues to date.

Compensation Committee

On July 2, 2020, the board of directors appointed a compensation committee comprised of the following initial members:

Ted McKechnie, Nicholas Baxter and Brian Quigley, all being independent directors of the board.

A compensation committee charter was adopted by the board to govern the compensation committee.

As of August 31, 2021, the Company had an active Governance and Nominating Committee.

If shareholders wish to recommend candidates for our board of directors, they may do so by sending communications to the Governance and Nominating Committee at the address on the cover of this annual report.

Audit and Finance Committee and Audit Committee Financial Expert

The audit and finance committee is governed by the audit and finance committee charter, the most recent version having been adopted on December 8, 2020.

Our audit and finance committee is currently composed of Mr.

Al Reese, Jr., Mr.

Ted McKechnie, and Mr.

Nicholas Baxter.

Reese, a CPA, qualifies as an "audit committee financial expert" as defined in Item 407(d)(5)(ii) of Regulation S-K, and is "independent" as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as amended.

Reese’s appointment in January 2021, Mr.

Bunka acted as a member of the audit and finance committee and was not “independent” pursuant to Nasdaq independence standards as he is actively involved in the daily management of the Company as CEO.

It is not the duty of our audit and finance committee to determine that our financial statements are complete and accurate and in accordance with generally accepted accounting principles.

Our management is responsible for preparing our financial statements, and our independent registered public accounting firm is responsible for auditing those financial statements.

Our audit and finance committee does, however, consult with management and our independent registered public accounting firm prior to the presentation of financial statements to shareholders and, as appropriate, initiates inquiries into various aspects of our financial affairs.

In addition, our audit and finance committee is responsible for retaining, evaluating and, if appropriate, recommending the termination of our independent registered public accounting firm and approving professional services provided by them.

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Compensation Committee

The Company created a compensation committee on July 2, 2020, the members of which are Mr.

Baxter, and Mr.

McKechnie, with both Directors being “independent” pursuant to Nasdaq independence standards.

The compensation committee operates under a written charter and its purpose is to review, consider, research, and recommend compensation for the Company’s executive management, taking into consideration achieved milestones, the compensation issued by companies of similar size and the overall financial health of the Company.

The committee is also responsible for approving and reviewing employment agreements and benefits agreements as well as any executive compensation information incorporated into the Company’s periodic reports.

Governance and Nominating Committee

The governance and nominating committee operate pursuant to a written charter created on December 8, 2020, and subsequently adopted by the Board of directors.

The current members of the committee are Mr.

Baxter, both of whom are independent directors of the Company.

The purpose of the committee is to assist the Board of directors with fulfilling its responsibilities by:

(i) being satisfied that corporate governance guidelines are adopted, disclosed and applied including director qualification standards, director responsibilities, director access to management and independent advisors, director compensation, director orientation and continuing education, and annual performance evaluation of the Board;

(ii) identifying individuals qualified to become new Board members and recommending to the Board the nominees for each annual meeting of shareholders of the Corporation;

and (iii) such other matters delegated to the committee by the Board.

A copy of the Governance & Nominating Committee charter can be downloaded from the Company’s website under our Investors/Governance/Governance Documents tab.

The Board of directors has a critical role in guiding our strategic direction and overseeing the management of our business, and accordingly, we seek to attract and retain highly qualified directors who have sufficient time to engage in the activities of the Board of directors and to understand and enhance their knowledge of our industry and business plans.

In evaluating the suitability of individual candidates, the governance and nominating committee and Board of directors may take into account many factors, including:

relevant education, experience and expertise;

knowledge of the Company and the issues facing the Company;

whether the candidate will strengthen the Board, as a whole, and remedy any perceived deficiencies in the specific criteria;

moral and ethical character;

diversity of expertise and experience in substantive matters pertaining to our business relative to other board members;

diversity of background and perspective, including, but not limited to, with respect to age, gender, race, place of residence and specialized experience;

and any other relevant qualifications, attributes or skills.

The core competencies of directors should address accounting or finance experience, market familiarity, business or management experience, industry knowledge, customer-base experience or perspective, crisis response, leadership, and/or strategic planning.

The Board of directors and governance and nominating committee evaluate each individual in the context of the Board as a whole, with the objective of assembling a group that can best perpetuate the success of the business and represent stockholder interests through the exercise of sound judgment using its diversity of experience in these various areas.

Executive Compensation

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our principal executive officer;

each of our two most highly compensated executive officers who were serving as executive officers at the end of the years ended August 31, 2020 and August 31, 2019;

each of our two most highly compensated executive officers who were serving as executive officers at the end of the years ended August 31, 2021, and August 31, 2020, and

up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the years ended August 31, 2021, and August 31, 2020,

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who we will collectively refer to as the named executive officers of our Company, are set out in the following summary compensation table, except that no disclosure is provided for any named executive officer, other than our principal executive officers, whose total compensation did not exceed $100,000 for the respective fiscal year:

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President & Director

Allan Spissinger (3) Chief Financial Officer

Bunka was appointed as Chairman, President, Chief Executive Officer, and director on October 26, 2006, and was Chief Financial Officer of our company from April 29, 2016 to May 31 2017.

He resigned as President on April 15, 2015.

Greg Downey (3)

Chief Financial Officer

Allan Spissinger (4) former Chief Financial Officer

Bunka was appointed as Chairman, President, Chief Executive Officer, and director on October 26, 2006.

Bunka a consulting fee through CAB Financial Services Ltd., where he is also the Chief Executive Officer.

1 unchanged sentence

Docherty a consulting fee through his wholly owned company Docherty Management Ltd.

Spissinger became Interim Chief Financial Officer on June 1, 2017 and Chief Financial Officer June 1, 2018.

Downey became Chief Financial Officer on April 15, 2021, and is considered an employee of the Company.

Spissinger became Chief Financial Officer on June 1, 2018.

Spissinger was replaced as CFO effective April 15, 2021, and remained with the company until the end of his contract on May 31, 2021.

Spissinger a consulting fee through his wholly owned company M&E Services Ltd.

The fair value of the stock options awarded was estimated using the Black-Scholes option pricing model with the following assumptions:

expected volatility of 96%;

risk-free interest rate of 0.35%;

expected life of 5 years;

and dividend yield of 0%.

Our Company is currently paying consulting fees to our Chief Executive Officer CAD$29,706 per month, our President CAD$25,609 per month and our Chief Financial Officer CAD$13,997 per month.

Consulting Agreements

The Company has negotiated a 3-year term renewal management contract with Chief Executive Officer Chris Bunka effective January 1, 2019.

The annual compensation payable is CDN$350,000 per year.

The Company appointed Mr.

John Docherty as President of Lexaria effective April 15, 2015.

The Company had an agreement with Docherty Management Limited, solely owned by Mr.

John Docherty with compensation of CAD$180,000 plus applicable taxes per year and has negotiated a 3-year term renewal management contract CAD$300,000 per year.

The fair value of the stock options awarded was estimated using the Black-Scholes option pricing model.

Consulting and Employment Agreements

Chris Bunka, CEO

The Company negotiated a 3-year term renewable management contract with Mr.

Bunka effective January 1, 2019.

The base annual compensation payable is C$350,000 per year with an annual increase of 1.25 times the annual Canadian inflation rate.

A performance bonus equal to 50% of the annual compensation may be payable upon the completion of certain performance criteria as determined by the board of directors and he is also entitled to participate in the Company’s approved stock option plan.

Bunka is entitled to compensation equal to 2% of the consideration received by the Company from the sale of a subsidiary, excluding certain circumstances.

Upon the occurrence of a change of control, subject to certain exemptions, Mr.

Bunka will also be entitled to a lump payment of twenty-three times his monthly fee.

The termination clause of Mr.

Bunka contract states that three (3) months notice must be given for terminating his contract without cause.

Given such notice, the Company would be liable for a termination break fee payment equal to fifteen (15) times his monthly fee.

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The contracts for the services of the Chief Executive Officer and President of the Company also include the following performance incentives:

A performance bonus equal to 50% of the annual compensation may be payable upon the completion of certain performance criteria as determined by the board of directors of Lexaria.

Compensation equal to 2% of the consideration received by the Company from the sale of a subsidiary, excluding certain circumstances.

Certain compensation to be paid upon a change of control excluding certain circumstances and participation in the Company’s approved stock option plans.

On June 1, 2018, the Company executed a thirty-six month contract with M&E Services Ltd., a wholly owned company by Mr.

Allan Spissinger, as Chief Financial Officer with monthly compensation of CAD$12,000 plus applicable taxes, including an annual 8% increase plus applicable taxes.

Spissinger is also entitled to an incentive of compensation equal to 1% of the consideration received by the Company from the sale of a subsidiary, excluding certain circumstances.

Other than as set out in this annual report on Form 10-K we have not entered into any employment or consulting agreements with any of our current officers, directors or employees.

As at the date of this report, the compensation committee is in negotiations with Mr.

Bunka for the renewal of his existing contracts.

John Docherty, President

The Company has an agreement with Docherty Management Limited, solely owned by Mr.

John Docherty for a 3-year term renewable management contract for C$300,000 per year, effective January 1, 2019, with an annual increase of 1.25 times the annual Canadian inflation rate.

An annual professional development allowance of C$15,000 is also available to Mr.

The contracts for the services of the President also include the following performance incentives:

entitlement to compensation equal to 2% of the consideration received by the Company from the sale of a subsidiary, excluding certain circumstances.

Upon the occurrence of a change of control, subject to certain exemptions, Mr.

Docherty will also be entitled to a lump payment of twelve (12) times his monthly fee.

The contract specifies that termination without cause would result in eight (8) months pay in leu of notice.

As at the date of this report, the compensation committee is in negotiations with Mr.

Docherty for the renewal of his existing contract.

Greg Downey, CFO

On April 15, 2021, the Company entered into an employment contract with Mr.

Downey as Chief Financial Officer with annual compensation of C$144,000 with a 10% annual increase.

An annual professional development allowance of C$5,000 is also available to Mr.

Downey is eligible for incentive compensation of 1% of the consideration received by the Company from the sale of a subsidiary excluding certain circumstances.

Upon the occurrence of a change of control, Mr.

Downey will also be entitled to a lump payment of sixteen (16) times his monthly salary.

The contract specifies that termination without cause clause would result in eight (8) months pay in leu of notice.

Other than as set out in this annual report on Form 10-K we have not entered into any employment or consulting agreements with any of our current officers or directors.

Grants of Plan-Based Awards Table

During the fiscal year ended August 31, 2021, Lexaria issued the following plan-based awards to our named executive officers:

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Compensation Securities

Executive Officer

compensation security

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Stock Options

Allan Spissinger

Stock Options

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Outstanding Equity Awards at Fiscal Year End

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OPTION AWARDS

Executive Officer

Number of Securities Underlying

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Number of Securities Underlying Unexercised Unearned Options

Option Exercise

Option Exercise Price

Option Expiration Date

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John Docherty

Allan Spissinger

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Option Exercises

During our fiscal year ended August 31, 2020, no named executive officer exercised any options.

No options were exercised by any named executive officer during our fiscal year ended August 31, 2021.

Compensation of Directors

As of January 2019, we implemented agreements for compensating our directors for their services in their capacity as directors for CAD$30,000 per year paid quarterly in advance.

As of August 31, 2020, three of our Directors are accepting compensation for their services.

During the year ended August 31, 2020, an aggregate of 400,000 stock options were granted to three of our directors with an exercise price of $0.32 expiring valued at $88,544 and included in consulting expense replacing cancelled options.

As of August 31, 2021, three of our directors are compensated for their services.

In their capacity as independent directors each receives $30,000 per year paid quarterly in advance.

Additionally, directors are paid nominal amounts for their services on the audit and finance, compensation, and the governance and nominating committees and for acting as chair of such committees.

During the year ended August 31, 2021, three of our directors were granted an aggregate of 6,400 stock options with a fair value calculated at $75,540 and included in consulting expense.

Pension, Retirement or Similar Benefit Plans

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We have no material bonus or profit-sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof.

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Indebtedness of Directors, Senior Officers, Executive Officers and Other Management

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Compensation Committee Interlocks and Insider Participation

During the majority of the fiscal year ended August 31, 2020, we did not have a compensation committee or another committee of the board of directors performing equivalent functions.

Instead the entire board of directors performed the function of compensation committee.

Our board of directors approved the executive and director compensation updates with the entire board acting as the compensation committee.

Updated compensation is as disclosed in this Form 10-K.

On July 2, 2020 the board of directors established a compensation committee comprised of the following independent directors:

Ted McKechnie, Nicholas Baxter and Brian Quigley.

No member of the Compensation Committee is, or was during fiscal 2021, an officer or employee of the Company or any of its subsidiaries or was formerly an officer of the Company or any of its subsidiaries.

No member of the Compensation Committee is, or was during fiscal 2021, an executive officer of another company whose board of directors has a comparable committee on which one of the Company’s executive officers serves.

Board Diversity

The Company and its management are highly supportive of the recent initiatives taken by the Securities and Exchange Commission and the Nasdaq Group to encourage diversity within the board of directors of reporting companies.

Lexaria annually reviews its board composition and evaluates areas of expertise that would provide additional benefits to the Company and its shareholders.

As the Company transitions its technology towards pharmaceutical applications, should the Company feel it is beneficial to expand its board, the Company will endeavour to engage individuals who will be able to enhance the board with their expertise in this industry sector and who also will enrich the board with their diverse perspectives.

Compensation Committee Report

As the compensation committee was recently formed, it did not, during the fiscal year ended August 31, 2020, hold any meetings and therefore it has not prepared a compensation committee report.

The Compensation Committee Charter as adopted by the board of directors to govern the compensation committee is available at its website.

Our Compensation Committee has reviewed and discussed the Executive Compensation for the year ended August 31, 2021, with management.

Based on the reviews and discussions our Compensation Committee recommended to our Board of directors that the Executive Compensation discussed above to be included in our filing of our annual report on Form 10-K for the year ended August 31, 2021.

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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

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Amount and Nature of Beneficial Ownership

Percentage of

Christopher Bunka;

Kelowna BC, Canada

14,308,148 (1)

Nicholas Baxter;

Aberdeenshire, UK*

John Docherty;

Toronto, Ontario

2,872,250 (3)

Toronto, ON, Canada

Kelowna, BC, Canada *

Ted McKechnie;

Toronto, Ontario*

Allan Spissinger;

Brian Quigley;

Richmond, VA*

Toronto, ON, Canada *

Nicholas Baxter;

Aberdeenshire, UK *

Al Reese Jr., Houston, TX, USA *

Directors and Executive Officers as a Group (6 persons)

*Less than 1%

(1) Includes 6,281,844 shares held in the name of C.A.B.

Financial Services and 7,126,304 shares held directly by Chris Bunka, chairman, chief executive officer and a director of our Company.

Includes 700,000 options which are exercisable at $0.34 and 200,000 warrants exercisable at $0.35.

(2) Includes 150,000 options exercisable at $0.32.

Nicholas Baxter is a director of our Company.

(3) Includes 550,000 options which are exercisable at $0.47, 300,000 options which are exercisable at $0.11, and 400,000 options exercisable at $0.32.

John Docherty is the President and a Director of our Company

(4) Includes 150,000 options exercisable at $0.32.

Ted McKechnie is a Director of our Company.

(5) Includes 650,000 options exercisable at $0.32.

Allan Spissinger is chief financial officer of our Company.

(6) Includes 100,000 options exercisable at $0.32.

Brian Quigley is a Director of our Company.

Less than 1% beneficial ownership

Chairman, director and CEO Chris Bunka directly held 273,543 shares and a further 215,912 shares held in C.A.B.

Financial Services.

Also included in his holdings are 23,333 warrants exercisable at $10.50 and 26,000 options exercisable at $5.83 and 23,334 at $7.08.

President and Director John Docherty holdings include 13,334 options exercisable at $9.60, 18,000 at $5.31, and 18,334 at $7.08.

CFO Greg Downey holdings include 12,000 options exercisable at $5.04, 5,000 at $5.31, and 8,000 at $7.08.

Director Ted McKechnie holdings includes 1,500 options exercisable at $5.31 and 5,000 at $7.08.

Director Nicholas Baxter holdings includes 1,500 options exercisable at $5.31 and 5,000 at $7.08.

Director Al Reese Jr.

holdings include Includes 3,400 options exercisable at $4.80.

Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares:

4 unchanged sentences

In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights.

As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on October 14, 2020.

As of October 14, 2020, there were 90,044,312 shares of our common stock issued and outstanding.

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As of November 26, 2021, there were 5,726,699 shares of our common stock issued and outstanding.

Changes in Control

We are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change in control of our Company.

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Certain Relationships and Related Transactions, and Director Independence

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Director Independence

We currently act with five directors, consisting of Christopher Bunka, John Docherty, Nicholas Baxter, Brian Quigley and Ted McKechnie.

We have determined that Nicholas Baxter, Ted McKechnie and Brian Quigley are “independent directors” as defined in NASDAQ Marketplace Rule 4200(a)(15).

Currently our audit committee consists of our Chris Bunka, Ted McKechnie, and Nicholas Baxter.

Our board of directors has determined that it does not have a member of its audit committee who qualifies as an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K.

We currently act with five directors, consisting of Mr.

Christopher Bunka, Mr.

John Docherty, Mr.

Nicholas Baxter, Mr.

Ted McKechnie, and Mr.

We have determined that Mr.

McKechnie, and Mr.

Reese are “independent directors” as defined in Nasdaq Marketplace Rule 4200(a)(15).

Currently our audit and finance committee consists of our Mr.

McKechnie, and Mr.

Reese, who qualifies as an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K.

From inception to present date, we believe that the members of our audit committee and the board of directors have been and are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting.

We believe that retaining additional independent directors who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development.

We recently appointed a compensation committee consisting of our independent directors:

Ted McKechnie, Brian Quigley and Nicholas Baxter.

The compensation committee was established on July 2, 2020 and did not hold any meetings during fiscal 2020.

The Compensation Committee Charter as adopted by the board of directors to govern the compensation committee is available at its website.

We have not established a formal nominating committee to date.

Currently the board of directors review the business plans of the Company and determine if increasing the board would be beneficial to such plans.

If additions to the board are considered to be beneficial, the executive officers will seek counsel from the board and from outside consultants as to potential candidates.

The executive officers will then conduct initial interviews of such potential candidates and advise the board of their findings.

If it is determined to proceed with additional board appointments, the current board will then interview the potential candidate and then determine whether to proceed with such appointment.

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We appointed a compensation committee on July 2, 2020, which currently consists of the following independent directors:

McKechnie, and Mr.

During fiscal year ended August 31, 2021, the compensation committee held one meeting to determine bonus compensation payable to the named executive officers in connection with the successful completion of certain performance milestones and the disposition of assets of CanPharm.

We appointed a governance and nominating committee on December 8, 2020 which currently consists of the following independent directors:

To date no meetings have been held by this committee.

Principal Accounting Fees and Services

The aggregate fees billed for the most recently completed fiscal year ended August 31, 2021, and for fiscal year ended August 31, 2020 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:

Audit Related Fees

All Other Fees

August 31, 2021

August 31, 2020

Principal Accounting Fees

Audit Related

Audit fees consist of fees billed for professional services rendered for the audits of our financial statements, reviews of our interim financial statements included in quarterly reports, services performed in connection with filings with the Securities and Exchange Commission and related comfort letters and other services that are provided by the Company’s principal accountants for the fiscal years ended August 31, 2021 and August 31, 2020 in connection with statutory and regulatory filings or engagements.

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Audit related Fees:

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These services include assistance regarding federal, state and local tax compliance and consultation in connection with various transactions and acquisitions.

We do not use our principal accountants for services other than the ones related to the our annual audit and the review of our interim financial statements.

We do not use our principal accountants for services other than those relative to our annual audit and the review of our interim financial statements and certain SEC filings.

We therefore do not involve our principal accountants for matters related to tax compliance and financial information system design and implementation.

These services, which include corporate tax preparation and designing or implementing a system that aggregates source data underlying the financial statements or generates information that is significant to our financial statements, are provided internally or by other service providers.

Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before our independent auditors are engaged by us to render any auditing or permitted non-audit related service, the engagement be:

approved by our audit committee (which consists of our entire board of directors);

These services, including corporate tax preparation and the designing or implementing of a system that aggregates source data underlying the financial statements or generates information that is significant to our financial statements, are provided internally or by other service providers.

Effective May 6, 2003, the SEC adopted rules that require that before our independent auditors are engaged by us to render any auditing or permitted non-audit related service, the engagement be:

approved by our audit committee;

entered into pursuant to pre-approval policies and procedures established by the board of directors, provided the policies and procedures are detailed as to the particular service, the board of directors is informed of each service, and such policies and procedures do not include delegation of the board of directors' responsibilities to management.

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Our board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.

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Exhibits, Financial Statement Schedules

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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.

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Exhibit Number

3 unchanged sentences

Articles of Incorporation

Amended and Restated Articles of Incorporation (Filed on Form 8-K January 14, 2021 Exh.

Second Amended and Restated Bylaws (incorporated by reference as Exhibit 3.2 to our Current Report on Form 8-K filed January 14, 2021)

Amended and Restated Bylaws (Filed on Form S-1 June 3, 2020 Exh 3.4)

Amendment to Articles of Incorporation – Share Consolidation (Filed on Form 8-K May 29th, 2009 Exh 3.1)

Amendment to Articles of Incorporation – Share Consolidation (Filed on Form 8-K June 23, 2009 Exh 3.1)

Amendment to Articles of Incorporation – Share Expansion (Filed on Form 8-K March 10th, 2010)

2 unchanged sentences

Instruments Defining the Rights of Security Holders, including Indentures

2014 Stock Option Plan

Equity Incentive Plan

Specimen ordinary share certificate

Opinion regarding Legality

Opinion of Sichenzia Ross Ference LLP regarding the legality of the securities being registered

Equity Incentive Plan (Filed on Form S-8 July 30, 2021)

Material Contracts

Investor Relations Agreement with IRTH Communications LLC (incorporated by reference as exhibit EX-99.1 of our Current Report on Form 8-k file July 1, 2020)

424B3 Notice Of Annual And Special Meeting Proxy Statement/Prospectus Summary

Lexaria Canpharm ULC, a British Columbia Canada corporation

PoViva Corp, a Nevada corporation

Lexaria Hemp Corp., a Delaware corporation

Lexaria Nicotine LLC, a Delaware corporation

Lexaria Canpharm Holding Corp., a Nevada corporation

Lexaria Pharma Corp., a Delaware corporation

Underwriting Agreement with H.C.

Wainwright & Co.

LLC (incorporated by reference as Exhibit 1.1 to our Current Report on Form 8-K filed January 14, 2021)

Asset Purchase Agreement with Hill Street Beverage Company Inc.

(incorporated by reference as Exhibit 10.31 to our Registration Statement on Form S-1 filed November 20, 2020)

List of Subsidiaries of the Registrant

Consents of Experts and Counsel

Consent of Davidson & Company LLP, Chartered Professional Accounts (Included in Exh 23.1)

Consent of Davidson & Company LLP, Chartered Professional Accountants

Rule 13(a) - 14 (a)/15(d) - 14(a)

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XBRL Taxonomy Extension Presentation Linkbase Document

*Incorporated by reference to same exhibit filed with the Company's Registration Statement on Form SB-2 dated January 10, 2006.

*Incorporated by reference to same exhibit filed with the Company's Registration Statement on Form SB-2 filed March 1, 2006.

** Furnished herewith.

7 unchanged sentences

(Principal Executive Officer)

October 14, 2020

November 26, 2021

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.

3 unchanged sentences

(Principal Executive Officer)

October 14, 2020

November 26, 2021

/s/ John Docherty

1 unchanged sentence

President and Director

October 14, 2020

/s/ Allan Spissinger

Allan Spissinger CPA, CA

November 26, 2021

/s/ Gregory Downey

Gregory Downey CPA, CMA

Chief Financial Officer

(Principal Financial Officer)

October 14, 2020

November 26, 2021

/s/Ted McKechnie

Ted McKechnie

October 14, 2020

November 26, 2021

/s/Nicholas Baxter

Nicholas Baxter

October 14, 2020

/s/Brian Quigley

Brian Quigley

October 14, 2020

November 26, 2021

/s/Albert Reese Jr.

Albert Reese Jr.

November 26, 2021

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures