What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-07-14 compared with 2022-04-11 · 87 added, 54 removed, 197 unchanged (42% of the section changed)

13 unchanged sentences

The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in US$.

All references to “C$” refer to Canadian dollars and all references to “common shares” and “shares” refer to the common shares in our capital stock, unless otherwise indicated.

1 unchanged sentence

The following discussion should be read in conjunction with our condensed financial statements and accompanying notes in this quarterly report on Form 10-Q, and our audited financial statements with notes in our annual report on Form 10-K for the year ended August 31, 2021.

Lexaria’s patented technology DehydraTECH improves the delivery of bioactive compounds while promoting healthy ingestion methods, lowers overall dosing, and is highly effective in active molecule delivery available in a range of formats from oral ingestible to oral buccal/sublingual to topical products.

Lexaria’s patented DehydraTECH technology improves the delivery of bioactive compounds while promoting healthy ingestion methods, lowers overall dosing, and is highly effective in active molecule delivery available in a range of formats from oral ingestible to oral buccal/sublingual to topical products.

DehydraTECH substantially improves the rapidity and quantity of Active Pharmaceutical Ingredients (“API”) transport to the blood plasma and brain using the body’s natural process for distributing fatty acids via the oral route.

This technology extends across many categories beyond the primary pharmaceutical focus of the Company from foods and beverages to cosmetic products and nutraceuticals.

Page 19 of 33

Research & Development

1 unchanged sentence

Currently, our primary research program is the investigation of cannabidiol (CBD) for the reduction of hypertension with a human clinical trial initiated in Q3, 2022 and three human clinical trials concluded in calendar 2021.

Other programs include nicotine for oral pouches and nicotine replacement therapy, antivirals and related compounds for COVID-19 and other viral diseases, PDE5 inhibitors, NSAIDS, hormones, and others.

Other programs include nicotine for oral pouches and nicotine replacement therapy, antivirals and related compounds for COVID-19 and other viral diseases, PDE5 inhibitors, hormones, and others.

From time to time the Company will engage in contract R&D for third parties who are interested in evaluating DehydraTECH in their products.

During the quarter ended February 28, 2022, Lexaria incurred $275,213 (February 2021- $176,398) in R&D expenditures.

During the quarter ended May 31, 2022, Lexaria incurred $752,095 (May 2021- $454,443) in R&D expenditures.

Specific R&D programs are in ongoing development and align to our financial ability to undertake each research phase for each API.

Due to our expanding portfolio coverage, we continually examine accelerated timetable options for testing, research, and development of each API.

The first half of fiscal 2022 continued to highlight the direction of our research and development programs with confirmatory results from our ongoing programs.

We are devoting an increasing proportion of our resources and focus towards pharmaceutical applications as launched in the prior fiscal year.

Fiscal 2022 continues to highlight the direction of our research and development programs with confirmatory results from our ongoing programs.

We continue to devote an increasing proportion of our resources and focus towards pharmaceutical applications.

This focus has led to the successful completion of a letter to request a pre-IND meeting concerning DehydraTECH CBD with the FDA and it is anticipated that the FDA shall be providing its opinions on the details and acceptability of Lexaria’s intended clinical trial program on or around July 30, 2022.

Assuming the FDA’s pending pre-IND meeting feedback is fairly aligned with the proposals Lexaria put forth in its request letter, it is anticipated that Lexaria will be authorized to proceed with its initial clinical trial to enable the development of its DehydraTECH CBD, subject to the approval of a full IND application filing, in late calendar 2022 or early 2023.

In September 2021 the Company reported successful results from its HYPER-H21-2 human study of DehydraTECH-CBD in arterial stiffness.

On December 29, 2021, we announced the Company received approval of its study protocols submitted for our study HYPER-H21-4 from the Independent Review Board.

This study is expected to consist of 60 volunteers between the ages of 40-70 using three daily doses of DehydraTECH-CBD, every day for the multi-week dosing duration of the study.

The Study was initiated during the first week of April, 2022.

HYPER-H21-4 is a double blinded, randomized cross-over design study with a placebo control.

In April 2022, the Company began its multi-week human clinical hypertension study, HYPER-H21-4 for which it had received Independent Review Board approval on December 29, 2021.

HYPER-H21-4 is a double blinded, randomized cross-over design study with a placebo control of 60 volunteers aged between 40-70 years.

Some volunteers will already be using leading standard of care hypertension drugs such as ACE inhibitors with or without diuretics which will help evaluate the efficacy of DehydraTECH-CBD with and without other hypertension treatments.

The extended duration of the study will allow Lexaria to gather critical data monitoring of DehydraTECH-CBD over time and will evaluate the potential for longer term health benefits.

This study should “de-risk” outcomes prior to Lexaria’s planned entry into regulatory pathways for the use of DehydraTECH-CBD to treat hypertension and possibly other forms of cardiovascular disease.

Further, HYPER-H21-4 should “de-risk” outcomes prior to Lexaria’s planned entry into regulatory pathways for the use of DehydraTECH-CBD to treat hypertension and possibly other forms of cardiovascular disease.

Dosing for the study will be concluding in July 2022 with results to follow.

The HYPER-H21-4 study is entirely funded through the Company's existing cash resources and is not subject to any financing requirement.

In April 2022 the Company announced that all data analyses from its simulated pulmonary hypertension clinical study HYPER-H21-3 have been successfully completed with positive safety and efficacy findings.

The study findings indicated a tendency (p=0.1) during 15 minutes of simulated low levels of oxygen (hypoxia) for reduced pulmonary artery systolic pressure ("PASP") with DehydraTECH-CBD treatment versus placebo.

Most notably, PASP was significantly attenuated by about 5 mmHg or 41% overall (p=0.045) in male participants specifically suggesting differences by sex in responsiveness to CBD treatment under hypoxic stress conditions.

These new findings from HYPER-H21-3 will help direct prospective future research into the efficacy of DehydraTECH-CBD use for the management of elevations in pulmonary arterial pressure under hypoxic conditions (e.g., exposure to altitude), related hypoxemic pathologies (e.g., severe lung disease), and pulmonary hypertension.

Page 20 of 33

Other API Studies

In October 2021 the Company reported results from its THC-A-21-1 in vivo study of DehydraTECH-THC showing it successfully elevated THC levels in blood plasma, requiring only 15 minutes at levels comparable to those achieved in 45 minutes with concentration-matched controls.

Lexaria also published results from its NIC-A21-1 in vivo trial of DehydraTECH-NICZ (nicotine benzoate) which was delivered via oral pouches.

Favorable results were all statistically significant, supporting further evaluation of the candidate.

Favorable results were all statistically significant, supporting further evaluation.

Lexaria plans to progress to a larger investigation in human volunteers of DehydraTECH-nicotine versus leading brands.

10 unchanged sentences

Our current patent portfolio includes patent family applications or grants pertaining to our method of improving bioavailability and taste, and the use of DehydraTECH as a delivery platform for a wide variety of Active Pharmaceutical Ingredients (“APIs”) including, but not limited to, fat soluble vitamins;

nonsteroidal anti-inflammatory drugs (“NSAIDs”);

anti-viral drugs;

4 unchanged sentences

The Company currently has over 50 patent applications pending worldwide.

Page 21 of 33

The Company’s issued patents in the United States, Australia, Europe, India, Mexico, and Japan are as follows:

Issued/Allowed Patent #

Issued Patent #

Patent Certificate Grant Date

Patent Family

21 unchanged sentences

Compositions Infused with Nicotine Compounds and Methods of Use Thereof

US 11,311,559

Compositions and Methods for Enhanced Delivery of Antiviral Agents

In November of 2021, we were advised that our first patent in Mexico, in the Company’s second patent family, had been allowed.

Subsequent to the quarter ended February 28, 2022, on March 8, 2022, the Company announced it has been granted a new patent entitled “Compositions Infused with Nicotine Compounds and Methods of Use Thereof”.

On March 8, 2022, the Company announced it would be issued a new patent entitled "Compositions Infused with Nicotine Compounds and Methods of Use Thereof".

The new Australian patent expands upon Lexaria's international intellectual property rights to apply DehydraTECH enhancement technology to most oral forms of nicotine, including pills, tablets, lozenges, capsules, pouches, gums and sprays.

The patent covers many different forms of nicotine including free base nicotine, nicotine salts, polymer resins of nicotine and other forms of nicotine complexes.

On April 26, 2022 the Company was granted US Patent 11,311,559 for Compositions and Methods for Enhanced Delivery of Antiviral Agents.

This is Lexaria’s 25 th patent granted worldwide.

Due to the complexity of pursuing patent protection, the quantity of patent applications will vary continuously as each application advances or stalls.

The Company is also filing new patent applications for new discoveries that arise from the Company’s R&D programs and, due to the inherent unpredictability of scientific discovery, it is not possible to predict if or how often such new applications might be filed.

Page 22 of 33

Reverse Stock Split

9 unchanged sentences

The Company’s common stock was uplisted from trading on the OTCQX under “LXRP” to the Nasdaq Capital Market where our common stock and certain of our warrants began trading under the symbols “LEXX” and “LEXXW”, respectively, effective as of the opening of market trading on January 12, 2021.

The Company, trading under the symbol “LXX”, voluntarily delisted from the Canadian Securities Exchanges (“CSE”) effective after the closing of trading on Wednesday, July 7, 2021.

The overwhelming majority of trading had moved to Nasdaq and by delisting from the CSE the Company expected to realize savings in fees and managerial time and effort that had been required to maintain a dual listing.

The Company, trading under the symbol “LXX”, voluntarily delisted from the Canadian Securities Exchange (“CSE”) effective after the closing of trading on Wednesday, July 7, 2021.

The overwhelming majority of trading had moved to Nasdaq and by delisting from the CSE the Company expected to realize savings in fees and managerial time and effort required to maintain a dual listing.

On December 9, 2020, Lexaria CanPharm ULC (“CanPharm”) completed a disposition (the “Disposition”) of its use and licensing rights to use its DehydraTECH technology (the “Assets”) specifically in association with non-pharmaceutical products containing cannabis molecules that contain 0.3% or greater THC.

2 unchanged sentences

As a result of the Disposition, CanPharm assigned to the purchaser, Hill Street, license agreements with three existing non-related party licensees.

In consideration for the Assets, Hill Street provided CanPharm with C$350,000 cash, a promissory note bearing a principal amount of C$2,000,000 and bearing an interest rate of 10% (the “Note”) and C$1,500,000 in shares of Hill Street, issuable in three tranches by April 9, 2022, of which C$1,149,939.43 worth of Hill Street stock has been issued to CanPharm to date.

In consideration for the Assets, Hill Street provided CanPharm with C$350,000 cash, a promissory note bearing a principal amount of C$2,000,000 and bearing an interest rate of 10% (the “Note”) and C$1,500,000 in shares of Hill Street, issued in three tranches over a period of 16 months from the closing date.

The repayment of the Note does not have a fixed maturity date and is based on quarterly installments equal to 5% of the gross sales realized by Hill Street of DehydraTECH enabled products.

3 unchanged sentences

Therefore, the Company considered risk of default high and the collectability of the Note as highly doubtful.

Since the date of sale Hill Street has repaid $4,585 in the year-ended August 31, 2021.

Subsequent to fiscal 2021, the Company has received a further $10,858, included in other revenues, as payment toward the balance of the Note and accumulated interest on the Note.

Since the date of sale Hill Street has repaid $5k in the year-ended August 31, 2021.

We have received a further $16k in the nine months ended May 31, 2022, included in other revenues, as payment toward the accumulated interest on the Note.

Page 23 of 33

Impact of COVID-19

21 unchanged sentences

Capital assets are stated at cost less accumulated depreciation and depreciated using the straight-line method over their useful lives or otherwise by units of production.

US patent costs, which represent legal costs incurred to establish US granted patents, are capitalized.

Capitalized patent costs are amortized on a straight-line basis over the remaining life of the patent.

Page 24 of 33

Intellectual Property

US patent costs, included in intellectual property, represent legal costs incurred to establish US-granted patents.

These capitalized patent costs are amortized on a straight-line basis over the remaining life of the patent.

When US patents reach a mature stage, any associated legal costs, including typical maintenance fees, are expensed as incurred.

In the period ended February 28, 2022, the Company recognized $15,840 attributable to capitalized patents.

In the nine months ended May 31, 2022, the Company recognized $81k (May 31, 2021 - $79k) attributable to capitalized patents.

All other patent costs are expensed when incurred.

1 unchanged sentence

Product Revenue

Revenue from the sale of products is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured, which typically occurs upon shipment.

Revenue from the sale of products is recognized when an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured, which typically occurs upon shipment.

The Company reports its sales net of actual sales returns.

6 unchanged sentences

As we move forward with our Investigational New Drug application with the FDA, we anticipate that our expenditures will further increase and accordingly, we expect to incur increased operating losses and negative cash flows for the foreseeable future.

Through February 28, 2022, we have funded our operations primarily with proceeds from the sale of our common stock.

The Company has consistently incurred recurring losses and negative cash flows from operations, including net losses of $3,452,156 and $316,931 for the six months ended February 28, 2022, and 2021, respectively.

Through May 31, 2022, we have funded our operations primarily with proceeds from the sale of our common stock.

The Company has consistently incurred recurring losses and negative cash flows from operations, including net losses of $5,870,492 and $2,883,483 for the nine months ended May 31, 2022, and 2021, respectively.

The continuation of our Company as a going concern is dependent upon our Company raising additional capital and/or attaining and maintaining profitable operations.

1 unchanged sentence

The recurring losses from operations and net capital deficiency do raise doubt about the Company’s ability to continue as a going concern within one year following the date that these consolidated financial statements are issued.

As of the issuance date of these consolidated interim financial statements, we expect our cash and cash equivalents of approximately $8.4m as at February 28, 2022, will be sufficient to fund our operating expenses and capital expenditure requirements through the forthcoming 12 months from the issuance date of this report.

Results of Operations for our Period Ended February 28, 2022, and 2021

Our net loss and comprehensive loss for the six months ended and the changes between those periods for the respective items are summarized as follows:

SIX MONTHS ENDED

As of the issuance date of these consolidated interim financial statements, we expect our cash and cash equivalents of approximately $7.0m as at May 31, 2022, will be sufficient to fund our operating expenses and capital expenditure requirements through the forthcoming 12 months from the issuance date of this report.

Page 25 of 33

Results of Operations for our Period Ended May 31, 2022, and 2021

Our net loss and comprehensive loss for the nine months ended and the changes between those periods for the respective items are summarized as follows:

Nine Months Ended

Results of Operations

Research and development

3 unchanged sentences

Discontinued operations

Product revenues of $17k and licensing usage fees of $16k during period ended February 28, 2022, constitute a significant decline in intermediate product sales and related licensing usage fees.

Our primary customer in the B2B product revenue stream has been delayed in chain-store rollouts resulting in overstocked inventory and as such there was no manufacturing & sales of new inventory for this licensee for the quarter ended February 28, 2022.A number of our other licensees are experiencing suspended or curtailed business activities due to the impact of COVID-19 on markets and consumer spending.

The abilities of other licensees to generate ongoing sales, thereby increasing usage fees are expected to increase as the effects of the pandemic are eventually diminished and the market acceptance of the products continue to develop.

We have continued strong interest in our intermediate products but cannot predict how long the pandemic will affect purchasing decisions of retail customers that ultimately affect the consumer product manufacturers that utilize our intermediate products.

Nor can we predict when recovery of the general economy will translate into increasing licensing or usage revenues.

Product revenues of $112k and licensing usage fees of $16k for the period ended May 31, 2022, constitute a significant decline in intermediate product sales and related licensing usage fees.

Our primary licensee experienced significant delays in the rollout of their products with a large national chain, creating a surplus of inventory from 2021 product manufactured by Lexaria.

The impacts of COVID-19 including supply chain issues and the delays in legislative amendments effecting the CBD industry in the US, have left the market flat throughout 2021 and 2022.

The abilities of other licensees to generate ongoing sales, thereby increasing product and usage fees, are expected to increase in the near term as new products are developed and gain market acceptance.

We have continued strong interest in our intermediate products in the US, Japan and Europe but cannot predict how long the current market conditions will affect purchasing decisions of retail customers that ultimately affect the consumer product manufacturers that utilize our intermediate products.

Nor can we predict when consumer spending might show sustainable growth in the effected market sectors that could translate into substantially increased licensing or usage revenues.

Our licensing revenues consist of IP licensing fees for the transfer of the Technology and usage fees that occur over time.

IP licensing fees are due at the signing of definitive agreements for the Technology and can include payments due upon transfer of the Technology and installment payments that are receivable within 12 months.

Licencing revenues are expected to increase in late 2022 and early 2023 as our newly signed licensees introduce their products using our DehydraTECH technology to market.

Subsequent to the quarter ended May 31, 2022, the Company announced the granting of an exclusive licence (subject to two previously issued licenses in Japan) to Premier Wellness Science Co., Ltd.

for the Japanese non-pharmaceutical market for use with CBD and hemp ingredients in oral liquid and non-liquid products, as well as for topical, haircare, lip-care and cosmetics products.

In order to retain ongoing exclusivity, the negotiated minimum quarterly payments to Lexaria begin September 1, 2022, and, during the first five years of the Agreement, amount to US$4,527,500.

In addition to the minimum payments, Lexaria will also receive royalty revenue from DehydraTECH licensed product sales.

Page 26 of 33

Research and Development

Expenditures on R&D increased by $366k for the period ended February 28, 2022, as the company undertook several studies within its 2022 applied research and development program focusing on DehydraTECH-CBD to treat hypertension.

Expenditures on R&D increased by $633k for the period ended May 31, 2022, as the Company undertook several studies within its 2022 applied research and development program.

Our primary focus in R&D has been on DehydraTECH-CBD to treat hypertension and our current study combined with our preparations for the filing of an IND (Investigative New Drug) application has contributed to a majority of the current expenditures.

Consulting Fees and Salaries

Our consulting fees increased by $335k primarily due to non-cash stock-based compensation on options granted and vested ($287k) in the six months ended February 28, 2022, and increased salaries due to hiring within our R&D, investor relations and accounting departments.

Our consulting fees decreased by $631k primarily due to non-cash stock-based compensation on options granted and vested ($728k) in the nine months ended May 31, 2021 and offset by a $99k increase in salaries in 2022 due to hiring within our R&D, investor relations and accounting departments.

Legal and Professional Fees

Our professional fees decreased by $102k during the period compared to the same period in the prior year.

Prior year expenditures were higher due to increased patent and trademark filings, the up list to the Nasdaq Capital Markets, and additional advisory services utilized.

Our professional fees decreased by $154k during the period compared to the prior year period.

The previous year’s expenditures were higher due to increased patent and trademark filings, the up-list to the Nasdaq Capital Markets, and additional advisory services utilized.

We recognize certain legal fees, tax advice fees, and accounting services all as “Professional Fees.”

General and Administrative

Included in general and administrative expenses during the six months ended February 28, 2021 was the gain on the sale of assets ($1.5m) which accounts for approximately half of the year-over-year change.

Other general and administrative expenses increased by $675k during the period ended February 28, 2022, over the same period last year.

The increase is primarily comprised of expenditures on investor relations and advertising ($505k) and the unrealized losses on marketable securities ($264k) offset by lower general expenses ($74k) and bad debs ($25k).

General and administrative expenses during the nine months ended May 31, 2022, are up significantly year over year due to increased advertising ($563k) and unrealized losses increased by $737k.

Otherwise expenses were generally lower.

A gain on the sale of assets ($1.5m) was recognized in the nine months ended May 31, 2021.

Liquidity and Financial Condition

3 unchanged sentences

Net Working Capital

Nine Months Ended

Cash flows (used in) provided by operating activities

3 unchanged sentences

Increase (decrease) in cash

Page 27 of 33

Operating Activities

Net cash used in operating activities for the six months ended February 28, 2022, increased by $723k for the period compared with cash used in operating during the same period in 2021.

This difference was largely due to the increased expenditures pertaining to R&D, professional fees, and our stakeholders outreach programs.

Net cash used in operating activities for the nine months ended May 31, 2022, increased by $792k for the period compared with cash used in operating during the same period in 2021.

This difference was largely due to the increased expenditures pertaining to R&D and our stakeholders outreach programs.

Investing Activities

Net cash used in investing activities increased by $93k due to increased spending on capitalized US patents filings and the purchase of equipment in the six months ended February 28, 2022, compared to 2021 which saw an inflow of cash from the sale of assets to Hill Street.

Net cash used in investing activities increased by $324k due to increased spending on capitalized US patents filings and the purchase of equipment in the nine months ended May 31, 2022, compared to 2021 which saw an inflow of cash from the sale of assets to Hill Street.

Financing Activities

Net cash provided from financing activities during the period ended February 28, 2022, is due to the amortized right-of-use lease payments.

Cash provided by financing activities in the six months ended February 28, 2021, of $9.4m primarily related to the underwritten public offering that closed January 21, 2021.

Net cash provided from financing activities during the period ended May 31, 2022, is attributed to the amortized right-of-use lease payments.

Cash provided by financing activities in the nine months ended May 31, 2021, of $9.4m primarily related to the underwritten public offering that closed January 21, 2021.

Liquidity and Capital Resources

5 unchanged sentences

Market volatility and global economics may have a significant impact on the availability of funding sources and the terms at which any funding may be available.

Page 28 of 33

Short Term Liquidity

On February 28, 2022, we had $8.4m cash and $10.4m of working capital.

On May 31, 2022, we had $7.0m cash and $8.11m in working capital.

Based on our current and upcoming research and development programs and our projected general and administration expenditures, we have determined that our cash resources are sufficient to allow us to continue operations through at least the next twelve months from the issuance date of this quarterly report.

10 unchanged sentences

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 (Principal Executive Officer) and our Chief Financial Officer (Principal Financial and Accounting Officer) to allow for timely decisions regarding required disclosure.

As of February 28, 2022, the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our CEO, President and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures.

Based on the foregoing, our CEO, President, and CFO concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of February 28, 2022.

As of May 31, 2022, the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our CEO, President and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures.

Based on the foregoing, our CEO, President, and CFO concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of May 31, 2022.

Management’s Report on Internal Control over Financial Reporting

2 unchanged sentences

The objectives of internal control include providing management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management’s authorization and recorded properly to permit the preparation of consolidated financial statements in conformity with US GAAP.

Our management assessed the effectiveness of our internal control over financial reporting as of February 28, 2022.

Our management assessed the effectiveness of our internal control over financial reporting as of May 31, 2022.

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 February 28, 2022, 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 GAAP.

Our management has concluded that, as of May 31, 2022, 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 GAAP.

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

Page 29 of 33

Inherent limitations on Effectiveness of Controls

6 unchanged sentences

Changes in Internal Control over Financial Reporting

During the quarter ended February 28, 2022, our controls and controls processes remained consistent with our fiscal year ended August 31, 2021.

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended February 28, 2022, that have materially or are reasonably likely to materially affect our internal controls over financial reporting.

During the quarter ended May 31, 2022, our controls and controls processes remained consistent with our fiscal year ended August 31, 2021.

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended May 31, 2022, that have materially or are reasonably likely to materially affect our internal controls over financial reporting.

Our control processes are designed to include remote workers, which we have utilized for many years.

The advent of the COVID-19 pandemic has not materially impacted our internal controls over financial reporting other than increasing requirements for social distancing and some additional remote working requirements for staff.

Page 30 of 33

PART II—OTHER INFORMATION

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-Q

Item 2. Management’s Discussion and Analysis