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Item 1. Business

2023-11-20 compared with 2022-11-28 · 184 added, 283 removed, 188 unchanged (71% of the section changed)

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DehydraTECH combines lipophilic molecules or APIs with specific long-chain fatty acids and carrier compounds that improve the way they enter the bloodstream, increasing their effectiveness and allowing for lower overall dosing while promoting healthier oral ingestion methods.

DehydraTECH can be used with a wide range of active molecules encompassing fat-soluble vitamins, pain medications, hormones, PDE5 inhibitors, antivirals, nicotine and its analogs, and all cannabinoids.

Our technology can be applied to a variety of therapeutic indications, including hypertension and heart disease, dementia, SARS-CoV-2/COVID-19 and HIV/AIDS.

DehydraTECH can be used with a wide range of active molecules encompassing fat-soluble vitamins, pain medications, hormones, PDE5 inhibitors, antivirals, nicotine and its analogs, and cannabinoids.

Our technology can be applied to a variety of therapeutic indications, including hypertension and heart disease, and diabetes.

DehydraTECH can be implemented in a multitude of ingestible or topically administered product formats including foods, beverages, oral suspensions, tablets, capsules, creams, lotions, and skin patches.

It is suitable for use with a variety of product formats including pharmaceuticals, nutraceuticals, over-the-counter and consumer packaged goods.

It is suitable for use with a variety of product formats including pharmaceuticals, nutraceuticals, over-the-counter products, and consumer packaged goods.

DehydraTECH is a technology incorporated into the formulation and manufacturing process of new or existing orally ingestible and topical products.

The procedure involves fusing the active ingredient as a delivery “payload” together with certain fatty acids and infusing the mixture into a substrate material.

Using controlled dehydration synthesis, it combines the payload and fatty acids together at a molecular level.

Using controlled dehydration processing, it combines the payload and fatty acids together at a molecular level.

The newly combined molecules are then integrated into production of the end-product using any number of dosage formats.

From foods and beverages to cosmetics and nutraceuticals, this technology extends across many product categories beyond the primary pharmaceutical focus of the Company.

DehydraTECH formulations have been found to reduce the need for unwanted sweeteners or chemical masking agents used for flavor and odor blocking allowing manufacturers to create low-sugar products with fewer calories and artificial sweeteners.

The Company has developed a variety of demonstration products since 2015 exhibiting the potential uses for DehydraTECH to both consumers and potential licensees.

These products included hot chocolate, coffee, seven flavors of teas, two flavors of protein energy bars, powder filled capsules and mix-and-serve powders.

All utilized DehydraTECH for a more palatable and efficient delivery of bioactive molecules.

The Company gained extensive experience from the formulation and production of these products that enables us to provide expert advice to our licensees with the integration of DehydraTECH in their products.

Lexaria does not intend to create or produce consumer products.

DehydraTECH formulations have been found in some cases to reduce the need for unwanted sweeteners or chemical masking agents used for flavor- and odor-blocking, allowing manufacturers to create low-sugar products with fewer calories and artificial sweeteners.

The Company has developed extensive experience from the formulation and production of its demonstration products, in various formats, that enables us to provide expert advice to our licensees with the integration of DehydraTECH in their products for the purpose of providing a more palatable and efficient delivery of bioactive molecules.

Lexaria supports our licensee’s products with our technology.

A part of our business plan is to encourage new and existing participants to license and utilize DehydraTECH to enable enhanced performance of their products.

These products cross a wide range of lipophilic bioactive molecules including CBD with additional molecules of interest continually being evaluated.

These products cross a wide range of lipophilic bioactive molecules including nicotine and cannabidiol (“CBD”) with additional molecules of interest continually being evaluated.

Intellectual Property

DehydraTECH dates back to 2014 with two initial US provisional patent application filings made by the original inventors Poppy’s Teas LLC, which Lexaria acquired by way of exclusive, worldwide license rights to DehydraTECH via the acquisition of the controlling interest in the founding company.

In 2015, Lexaria signed a license agreement with PoViva Corp.

(formerly PoViva Tea LLC) granting Lexaria a 35-year non-exclusive worldwide license to unencumbered use of PoViva Tea LLC’s intellectual property rights, including rights of resale.

This license agreement ensures Lexaria has full access to the underlying infusion technology.

The United States Patent and Trademark Office (USPTO) granted our first patent on October 31, 2017.

In 2019, the licence agreement was updated granting Lexaria an exclusive license to use DehydraTECH technology for a period of time ending 25 years after the date of the last patent granted to PoViva Corp.

Since our first patent filing in 2014 for DehydraTECH, we have increased the number of patent applications to more than 50 and to date have been allowed/granted 27 patents worldwide as of the date of this filing.

Lexaria’s involvement with the foundational technology to DehydraTECH dates back to 2014 when it entered into a strategic relationship with Poppy’s Teas LLC, and the original inventors of DehydraTECH, who had filed two initial US provisional patent applications for the technology.

The strategic relationship evolved into the acquisition by Lexaria of Poviva Tea, LLC (formerly Poppy’s Teas LLC) which entity was then converted from a limited liability company to a corporation under the name Poviva Corp.

(“ Poviva ”).

Poviva is now the wholly-owned subsidiary of Lexaria and the named owner of all of the patents filed in connection with DehydraTECH.

Lexaria has been granted an exclusive license to use DehydraTECH technology from Poviva for a period of time ending 25 years after the date of the last patent granted to Poviva.

Since our first patent grant in 2017 for DehydraTECH, we have continued to pursue patent applications internationally in regions that are considered to have the highest commercial potential and, to date, have been allowed/granted 37 patents worldwide as of the date of this filing.

Our pursuit and development of our technology has expanded our potential area of impact, both geographically and by sector.

Because of the applicability of DehydraTECH to many market sectors across the globe, we have taken the necessary steps to protect that intellectual property internationally.

Lexaria has patents granted or patent applications progressing in countries around the world with aggregate populations of nearly 4 billion people.

We pursue international patent protection through filings under the Patent Cooperation Treaty, followed by national filings.

Our global patent portfolio now stands at 27 and we have more than 50 patent applications filed in over 40 jurisdictions which are considered as having the highest commercial potential.

The patents and patent applications apply to fat-soluble versions of vitamins, NSAIDs, nicotine, cannabinoids, hormones, PDE5 inhibitors, antivirals, and other molecules.

Several of our patent families include intellectual property addressing the manufacturing and processing methods used to combine long-chain fatty acids with active pharmaceutical ingredients.

In addition, while ten of our US patents and nine of our Australian patents have been granted to date, we now have received granted patents in the European Union, Japan, India and Mexico, and have multiple other applications filed in the US and around the world.

It is not possible to forecast with certainty when, or if, our remaining patents pending will become granted patents.

We will continue to pursue our remaining patents pending as vigorously as we are able, since the successful granting of more of those applications could lead to material increases in shareholder value.

If our remaining patent applications do become granted patents, our ability to generate meaningful license revenue from our intellectual property may increase from multiple jurisdictions outside of the US.

Our current patent portfolio includes patent family applications or grants pertaining to Lexaria’s method of improving bioavailability and taste, and the use of DehydraTECH as a delivery platform for a wide variety of Active Pharmaceutical Ingredients (“APIs”) encompassing all cannabinoids;

Our current patent portfolio includes patent family applications or grants pertaining to Lexaria’s method of improving bioavailability and taste, and the use of DehydraTECH as a delivery platform, orally or topically, for a wide variety of Active Pharmaceutical Ingredients (“APIs”) encompassing cannabinoids;

fat soluble vitamins;

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and nicotine and its analogs.

The Company currently has more than 50 patent applications pending worldwide and due to the complexity of pursuing patent protection, the quantity of patent applications will vary continuously as each application advances or stalls.

The pending and granted patents also cover the manufacturing and processing methods used to combine fatty acids with active pharmaceutical ingredients.

This includes heating and drying methods and use of excipients and substrates.

The Company currently has several applications pending worldwide and due to the complexity of pursuing patent protection, the quantity of patent applications will vary continuously as each application advances or stalls.

We continue to investigate national and international opportunities to investigate expansions and additions to our intellectual property portfolio.

Patents have been filed specifically for the use of DehydraTECH with cannabinoids for the treatment of heart disease.

Lexaria is also filing new patent applications for new discoveries that arise from the Company’s R&D programs.

Patents have been filed specifically for the use of DehydraTECH with cannabinoids for the treatment of heart disease and hypertension to support our anticipated Investigational New Drug (“IND”) application with the Food and Drug Administration (“FDA”), and for treatment of epilepsy.

We will continue to seek beneficial acquisitions of intellectual property if and when we believe it is advisable to do so.

Due to the inherent unpredictability of scientific discovery, it is not possible to predict if or how often such new applications might be filed or patents issued.

The substance of the patents centre on the use of DehydraTECH in a variety of products including those that are ingested or topically administered such as CBD, food, beverage, patches, creams, lotions et cetera.

Patents have been filed (and granted in both Australia and the EU) specifically for the use of DehydraTECH with cannabinoids for the treatment of heart disease.

The pending and granted patents also cover the manufacturing and processing methods used to combine fatty acids with active pharmaceutical ingredients.

This includes heating and drying methods and use of excipients and substrates.

Below we summarize Lexaria’s allowed/granted patents.

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#3 Stable Ready-to-Drink Beverage Compositions Comprising Lipophilic Active Agents

#6 Transdermal and/or Dermal Delivery of Lipophilic Active Agents

#7 Lipophilic Active Agent Infused Compositions with Reduced Food Effect

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#8 Compositions Infused with Nicotine Compounds and Methods of Use Thereof

#14 Lipophilic Active Agent Infused Tobacco Leaves and/or Tobacco Materials and Methods of Use Thereof

US 11,311,559

#18 Compositions and Methods for Enhanced Delivery of Antiviral Agents

AU 2021261261

US 11,700,875

#20 Compositions and Methods for Sublingual Delivery of Nicotine

US 11,666,544

#21 Compositions and Methods for Treating Hypertension

US 11,666,543

Patents granted in the year ended August 31, 2023

In fiscal 2023, the Company’s patent portfolio expanded to include three new patent families.

This further protects our exclusivity in the use of DehydraTECH with nicotine and antiviral agents, in compositions that have a reduced food effect and for delivery of lipophilic active agents via transdermal or dermal delivery.

This further protects our exclusivity in the use of DehydraTECH with sublingual delivery of nicotine, treatment of hypertension and delivery of lipophilic active agents via transdermal or dermal delivery.

These patents are as follows:

our first ever patent granted in our 8 th patent family, to use DehydraTECH to more efficiently deliver nicotine through buccal tissue absorption.

The new Australian patent entitled “Compositions Infused with Nicotine Compounds and Methods of Use Thereof” 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.

our first ever Canadian patent granted in our 6 th patent family, to use DehydraTECH to more efficiently deliver lipophilic active agents via transdermal or dermal delivery.

our first-ever US patent granted in our 20 th patent family, expands upon Lexaria’s international intellectual property rights to apply DehydraTECH enhancement technology to the sublingual delivery of nicotine.

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

our first-ever patent granted in our 18 th patent family, to use DehydraTECH in the enhanced delivery of antiviral drugs, in the United States.

The new US patent entitled “Compositions and Methods For Enhanced Delivery Of Antiviral Agents” expands upon Lexaria’s international intellectual property rights to apply DehydraTECH enhancement technology with antiviral drugs where our research has shown that antiviral drugs processed with DehydraTECH were able to reach peak blood concentration levels that were double those of non-DehydraTECH-processed;

and overall volumes of drug delivered into bloodstream were up to triple the amount compared to non-DehydraTECH-processed drugs.

our first ever patent granted in our 7 th patent family which recognizes DehydraTECH’s ability to deliver API’s more efficiently regardless of the presence of foods within the gastrointestinal system, in Japan.

The new Japan patent entitled “Lipophilic Active Agent Infused Compositions With Reduced Food Effect” recognizes the important achievement in reliable drug dosing resulting from DehydraTECH’s ability to deliver drugs more consistently into the bloodstream regardless of the presence of food in the gastrointestinal system.

our first Mexican patent in our third patent family, “Stable Ready-to-Drink Beverage Compositions Comprising Lipophilic Active Agents” from which patents have already been issued in Australia, India, and Japan.

The patent is applicable to a range of active ingredients that includes but is not limited to non-psychoactive cannabinoids and NSAIDs.

Types of products covered include certain pharmaceutical product formats as well as a wide variety of ready-to-drink consumer retail beverage products.

Additional claims granted include the treatment of neurological diseases such as Alzheimer’s disease, Parkinson’s disease, schizophrenia, and Human Immunodeficiency Virus (HIV):

metabolic disorders such as insulin related deficiencies and lipid profiles, hepatic diseases, diabetes, and appetite disorders;

cancer chemotherapy;

benign prostatic hypertrophy;

irritable bowel syndrome;

biliary diseases;

ovarian disorders;

marijuana abuse;

and alcohol, opioid, nicotine or cocaine addiction.

two US patents granted in our 21 st patent family which recognizes DehydraTECH’s ability, when combined with CBD, to treat hypertension.

Research and Development

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Due to our expanding portfolio coverage, we continue to explore accelerated timetable options for testing, research, and further development.

Our ongoing R&D programs are always subject to our existing financial resources and our ability to raise capital to fund them.

The Company regularly pursues new R&D programs that investigate potential commercial applications for the incorporation of DehydraTECH.

These include, but are not limited to, ongoing programs to explore methods to integrate nano emulsification chemistry techniques together with DehydraTECH that have demonstrated positive results to date, programs to further enhance intestinal bio absorption rates with DehydraTECH, as well as ongoing programs to expand the types and breadth of product form factors into which DehydraTECH can be applied.

These include, but are not limited to, ongoing programs to explore different therapeutic indications that DehydraTECH-enhanced drug products can be utilized for the purpose of treatment options.

Currently, our primary research program is the investigation of CBD for the reduction of hypertension leading to an upcoming application under the FDA for an IND.

Other programs include DehydraTECH formulation development and testing with nicotine for oral pouches and prospective nicotine replacement therapy, human hormones, CBD for diabetes, dementia and others.

Depending on the number of programs undertaken, R&D budgets are expected to vary significantly.

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Lexaria has conducted a number of pharmacokinetic studies designed to provide potential early-stage indications of enhancing delivery characteristics of various drugs for potential future use.

Our first human clinical study was published in 2019 ( Advances in Therapy titled “Examination of a New Delivery Approach for Oral Cannabidiol in Healthy Subjects:

A Randomized, Double-Blinded, Placebo-Controlled Pharmacokinetics Study”-see PubMed.gov website:

31512143 ), where we demonstrated that DehydraTECH delivered higher volumes of CBD into the human circulatory system and did so more quickly than a concentration-matched positive control.

Our first human clinical study was published in 2019 under the title Examination of a New Delivery Approach for Oral Cannabidiol in Healthy Subjects:

A Randomized, Double-Blinded, Placebo-Controlled Pharmacokinetics Study , where we demonstrated that DehydraTECH delivered higher volumes of CBD into the human circulatory system and did so more quickly than a concentration-matched positive control.

The study demonstrated a statistically significant reduction in human blood pressure (“BP”) from the DehydraTECH processed CBD, versus no statistical reduction in human blood pressure from the positive control.

The results of this study significantly influenced the direction of Lexaria’s research and development of its DehydraTECH technology.

During fiscal 2022 Lexaria marked significant milestones in utilizing DehydraTECH-processed cannabidiol (“CBD”) for investigation of heart disease and hypertension;

and separately, for oral nicotine delivery as a non-combusted, reduced-risk alternative to smoking.

The following studies are the most recent contributors to our applied R&D programs.

The results of this study significantly influenced the direction of Lexaria’s research and development of its DehydraTECH technology and led to four subsequent human trial studies, with our most recent study HYPER-H21-4 being completed during the fiscal year and resulting in seven (7) peer reviewed publications Antihypertensive effects of CBD are mediated by altered inflammatory response:

A sub-study of HYPER-H21-4 trial , Journal of Functional Foods;

Chronic effects of oral cannabidiol delivery on 24h ambulatory blood pressure in patients with hypertension (HYPER-H21-4):

a randomized, placebo-controlled, and crossover study , Cannabis and Cannabinoid Research;

Chronic Effects of Effective Oral Cannabidiol Delivery on 24-h Ambulatory Blood Pressure and Vascular Outcomes in Treated and Untreated Hypertension (HYPER-H21-4):

Study Protocol for a Randomized, Placebo-Controlled, and Crossover Study Journal of Personalized Medicine;

CBD supplementation reduces arterial blood pressure via modulation of the sympatho-chromaffin system:

A substudy from the HYPER-H21-4 trial , Biomedicine & Pharmacotherapy;

Effects of CBD supplementation on ambulatory blood pressure and serum urotensin-II concentrations in Caucasian patients with essential hypertension:

A sub-analysis of the HYPER-H21-4 trial , Biomedicine & Pharmacotherapy;

The Influence of Oral Cannabidiol on 24-h Ambulatory Blood Pressure and Arterial Stiffness in Untreated Hypertension:

A Double-Blind, Placebo-Controlled Cross-Over Pilot Study, Advances in Therapy;

and Differences in Plasma Cannabidiol Concentrations in Women and Men:

A Randomized, Placebo-Controlled, Crossover Study , International Journal of Molecular Sciences.

During fiscal 2023 Lexaria marked significant milestones in utilizing DehydraTECH-processed CBD for investigating heart disease and hypertension;

and separately, for nicotine delivery via an oral pouch format, as a non-combusted, reduced-risk alternative to smoking.

The following studies are the most recent contributors to our applied R&D programs that were completed in fiscal 2023.

These studies have been entirely funded through the Company’s existing cash resources.

During the spring of 2021 Lexaria commenced its human clinical study HYPER-H21-1 with the intent to validate DehydraTECH-CBD’s effect on hypertension.

This was a randomized, double-blind, controlled study with 24 subjects aged 45-65 and enrolled with symptoms of either pre-hypertension or mild hypertension.

A single 300 mg dose of a DehydraTECH 2.0 CBD formulation was compared against a non-DehydraTECH control of matched concentration.

Time series blood pressure and heart rate analyses were the primary objectives of the study.

Secondary objectives included pharmacokinetic speed and rate of absorption of CBD and its main metabolites together with assessment of inflammatory markers of cardiovascular disease and nitric oxide biomarkers.

The Company noted that the DehydraTECH-CBD treatment was well tolerated by the volunteers with no serious adverse events or side effects observed or reported.

Early results disclosed in July 2021 noted a difference between the DehydraTECH-CBD formulation and the control arm at the 20-minute mark that was statistically significant (p=0.025).

Animal study HYPER-A21-1, an animal study utilized three new “DehydraTECH 2.0” formulation variations designed to enable CBD delivery performance enhancements and pharmacokinetic optimization.

All three new formulations delivered improved performance when compared to both Lexaria’s original DehydraTECH 1.0 and 2.0 concentration-matched formulations, as well as to a medium chain triglyceride (“MCT”) oil based control formulation representative of standard industry practices.

The study demonstrated that each of the new DehydraTECH 2.0 formulations delivered very high levels of CBD absorption into brain tissues, dwarfing the levels achieved with the MCT oil-based control formulation.

The three new DehydraTECH 2.0 formulations delivered between 907%-1,737% more CBD into brain tissue than the MCT oil-based control formulation, similar to the up to 1,937% increase over the MCT oil based control formulation announced previously for Lexaria’s original DehydraTECH 2.0 formulation.

Dosing was completed in July of 2021 in our second human clinical study in 2021which was conducted at a European medical research hospital and designated as HYPER-H21-2.

On September 7, 2021, Lexaria announced the results which evaluated 16 volunteers (8 male;

8 female) aged 45-65 who were pre or mildly hypertensive and received three separate doses of 150mg DehydraTECH 2.0 CBD versus placebo.

The study concentrated on monitoring blood pressure reduction continuously over 24 hours and studying central arterial stiffness, physical activity, and sleep quality.

At selected times during the 24-hour study, volunteers with mild to moderate hypertension averaged as much as a 20 mmHg (i.e., 23%) decrease in BP relative to placebo.

Over the 24-hour ambulatory monitoring period, volunteers averaged a significant reduction of 7.0% (p < 0.001) in systolic pressure with DehydraTECH-CBD relative to placebo.

The study indicated that, within a 24 hour period, DehydraTECH 2.0 CBD provided a significant reduction of 3.5% in diastolic pressure relative to an increase in diastolic pressure from baseline.

This is a substantial discovery as existing drugs for hypertension typically take several weeks before comparable blood pressure reductions are seen.

Further results from the study were announced on December 8, 2021, whereby DehydraTECH 2.0 CBD was also found to reduce arterial stiffness after only one day of dosing which could have the potential as a treatment for cardiovascular and other disease.

This potentially broadens its application to treatment of cardiovascular and other disease states beyond hypertension where it has already shown promise.

Final results from HYPER-H21-3 illustrated DehydraTECH CBD’s ability to reduce blood pressure pursuant to a simulated pulmonary hypertension scenario.

The study was successfully completed with positive safety and efficacy findings.

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.

Study HYPER-H21-3 used a placebo-controlled and double-blinded design, with administration of a single 300mg dose of a specific DehydraTECH-2.0 CBD formulation compared to placebo in a target group of sixteen enrolled volunteers (8 females and 8 males;

aged 18-35 years).

The study participants were subjected to a 30-minute period of rest following dosing, during which time they breathed normal room air (i.e., 21% oxygen), followed by a 40-minute period of simulated hypoxia (i.e., 12% oxygen) that was induced in order to safely simulate robust hypoxic pulmonary vasoconstriction (“HPV”) and, as a result, an acute state of pulmonary hypertension.

The hypoxia state was intended to mimic conditions experienced by those traveling or walking at high altitude or by those engaging in other activities of diminished oxygen availability conducive to development of HPV.

Adverse elevations in HPV also commonly occur in related hypoxemic pathologies (e.g., severe lung disease) and pulmonary hypertension.

Measurements of PASP were performed via echocardiography at intervals of 15 and 30 minutes during the 40-minute hypoxic period comparing the effects of DehydraTECH-CBD to placebo.

HYPER-H21-4 is the most ambitious study Lexaria has ever undertaken and is enabled from the successful outcomes from our other 2021 human hypertension studies.

Hypertension:

HYPER-H21-4 was the most ambitious study Lexaria had ever undertaken and was supported from the successful outcomes from our other 2021 human hypertension studies.

This study was intended to “de-risk” outcomes prior to Lexaria’s planned entry into formal investigational new drug (“IND”) regulatory pathways for the use of DehydraTECH-CBD to treat hypertension and possibly other forms of cardiovascular disease.

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The study consisted of 66 volunteers between the ages of 40-70 and used a double blinded, randomized cross-over design, which utilized a placebo control.

Some volunteers were recruited who were using hypertension drugs such as ACE inhibitors, with or without diuretics, to help evaluate the efficacy of DehydraTECH CBD with and without other hypertension treatments..

Large quantities of data have been gathered since the inception of the study with data analyses beginning in September 2022 as results became available from ongoing bioanalyses of biological samples collected during the study.

Each of these sets of data may lead to additional applications for DehydraTECH-CBD.

For example, the MRI data may assist one of the secondary outcome measurements in the study to evaluate possible positive effects upon brain structure and function;

and the detailed psychometric testing may reveal new insights into the potential benefits for mental health.

The wide range of data collection could provide additional insights into the long-term health benefits of DehydraTECH-CBD that might otherwise remain undetected.

In December of 2021 the Independent Review Board approval was received and the program began in April 2022 with dosing with DehydraTECH-CBD completed in July 2022.

Some volunteers were recruited who were using hypertension drugs such as angiotensin-converting enzyme inhibitors, with or without diuretics, to help evaluate the efficacy of DehydraTECH CBD with and without other hypertension treatments.

In October 2022 Lexaria announced initial findings from HYPER-H21-4 evidencing a sustained drop in blood pressure (BP) in normally active hypertensive patients following multiple weeks of oral CBD therapy, using Lexaria’s patented DehydraTECH-CBD capsule formulation.

The primary safety and efficacy objectives of study were successfully achieved.

The primary safety and efficacy objectives of the study were successfully achieved.

BP was significantly reduced by 2.5 weeks and was sustained over the full 5-weeks of dosing using relatively low doses of CBD (as compared to other regulator approved pharmaceutical CBD applications) as a direct result of the well-established drug delivery efficiencies of Lexaria’s DehydraTECH technology.

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Of note, these significant decreases in BP were achieved using relatively low doses of DehydraTECH-CBD as a direct result of the well-established drug delivery efficiencies of Lexaria’s DehydraTECH technology.

There were no serious adverse events to reported as a result of the program dosing.

There were no serious adverse events to report as a result of the program dosing.

This demonstrates a noteworthy safety and tolerability profile relative to conventional anti-hypertensive medications.

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This additive improvement as an adjunct therapy, together with the exceptional safety profile of DehydraTECH-CBD, could become a significant value enhancer should it eventually enter the marketplace as an approved hypertension treatment.

As expected, the study produced an enormous amount of data that is initially supportive of Lexaria’s plans to enter regulatory pathways under IND with a view to eventual regulatory approval to use DehydraTECH-CBD to treat hypertension if successful.

Additional study endpoint analyses as described in the complete study protocol are ongoing and any relevant material findings will be reported upon in due course as these findings become available.

In February 2023, additional results from the data analyses revealed modulation of a circulating compound called catestatin in the blood of study subjects which may point to a unique mechanistic benefit upon cardiovascular regulation with DehydraTECH-CBD treatment.

Catestatin is a multifunctional peptide known to have inhibitory effects on the sympathetic nervous system in the pathophysiology of hypertension.

In May 2023, final results from HYPER-H21-4 revealed that blood-plasma levels of interleukin 8, 10, and 18, being pro-inflammatory biomarkers known to be linked to cardiovascular disease, were reduced significantly by ~19%, ~27%, and ~43%, respectively.

Overall, HYPER-H21-4 resulted in the above-noted seven peer reviewed publications and data sets which further strengthens and supports the case for DehydraTECH-CBD offering distinctive mechanistic benefits for the treatment of hypertension.

In March 2022, Lexaria commenced an initial animal study to determine if DehydraTECH-CBD evidences superior treatment of seizure activity when compared to Epidiolex.

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Epidiolex’s effectiveness was studied in three randomized clinical trials involving a total of 516 patients and was shown to be effective in reducing the frequency of seizures when compared to placebo.

Lexaria’s animal study is being conducted by a leading US-based independent laboratory using advanced DehydraTECH 2.0 formulations and is fully funded through existing Lexaria resources.

Lexaria hopes to demonstrate similar or superior levels of efficacy based on the known advanced drug delivery capabilities of DehydraTECH.

Lexaria’s seizure program expects to leverage the significant gains in systemic delivery and brain uptake that the Company has evidenced from other studies comparing DehydraTECH 2.0 CBD formulations with concentration-matched controls.

In the first quarter of 2022, Lexaria announced the results from its tetrahydrocannabinol (“THC”) animal study which compared DehydraTECH-enhanced THC with concentration matched controls.

We discovered that DehydraTECH-enhanced THC delivery into the blood plasma occurred within 15 minutes of oral ingestion as compared to parallel levels of THC delivery into blood plasma occurring at 45 minutes for the concentration matched controls.

Furthermore, DehydraTECH-THC delivered more THC into the bloodstream than the industry standard medium chain triglyceride (“MCT” or “coconut oil”) based control formulation from the 2-minute mark onwards, then dropped to the same level as the MCT control by the 6-hour mark.

Lexaria began a tolerability and PK pilot study in animals using a DehydraTECH-estrogen composition in an effort to determine if absorption enhancement following oral administration was possible.

After commencing this study work, our third-party laboratory performing the study concluded that the bioanalytical methodology employed required modification in order to adequately detect and quantify estrogen analytes in the animal bloodstream.

Methodological optimization is in progress, following which blood plasma samples will be analysed and results reported.

Ibuprofen and Naproxen:

The Company commenced a tolerability pilot study in animals evaluating DehydraTECH-processed formulations of ibuprofen and naproxen in an effort to determine if dosing evidenced superior gastrointestinal tolerability comparing Lexaria’s DehydraTECH test articles to concentration-matched controls.

The study was undertaken based on the possibility that DehydraTECH-processed NSAIDs might achieve higher bioavailability and brain uptake than conventional formulations and, in turn, be able to be used at lower dosage levels in order to lower unwanted side effects.

Our results saw some indications of less stomach ulcerations with our DehydraTECH formulations although the findings were generally unremarkable.

As a result, no further research on NSAIDs is currently contemplated although this may be revisited.

PDE5-A21-1 was an animal PK study conducted by third-party laboratories to evaluate DehydraTECH processing of the phosphodiesterase inhibitor (“PDE5 inhibitor”) sildenafil for potential application in the management of erectile dysfunction.

PDE5 inhibitor drugs work using a process of vasodilation and most are considered to be slow-acting, requiring 1-2 hours to reach peak levels in the bloodstream for maximum effectiveness.

Lexaria announced the results of our comparison study in February 2022 of DehydraTECH enhanced sildenafil with concentration matched controls.

It was discovered that DehydraTECH-enhanced sildenafil delivered 74% more sildenafil into the bloodstream in as little as four minutes when compared to the concentration-matched, generic control formulation.

This clear trend toward faster and higher overall delivery of sildenafil into the bloodstream was evidenced over the course of the study.

Seven minutes after dosing, the DehydraTECH-sildenafil formulation achieved an average blood level higher than the generic sildenafil control formulation reached at any point during the study.

In July of 2021, we released the positive results of our completed tolerability and pharmacokinetic animal study VIRAL-A20-3 which enhanced colchicine with DehydraTECH.

This study was performed by an independent, premier animal testing laboratory located in the United States using 20 Sprague-Dawley rats, dosed via oral gavage using either DehydraTECH or control colchicine formulations (i.e.

10 rats per test article).

The study evaluated peak concentration (“Maximum Concentration” or “Cmax”) and total drug delivery into the rodent bloodstream (“Area Under the Curve” or “AUClast”).

Similar to other antiviral agents that Lexaria has processed with DehydraTECH (e.g., darunavir, efavirenz, remdesivir’s nucleoside analogue GS-441524 and ebastine), oral colchicine in its available forms today exhibits diminished bioavailability (approximately 45%) in humans.

This study demonstrated that DehydraTECH enabled colchicine, benefited from our proprietary formulation and processing, resulting in increased delivery.

Colchicine is an approved therapeutic with anti-inflammatory effects that is principally used to treat gout and conditions such as cardiac inflammation (i.e., pericarditis), and also has potent effects in mitigating the cytokine storm associated with SARS-CoV-2/COVID-19.

Colchicine is occasionally recommended and used to treat emergent pericarditis in children in cases where this form of cardiac inflammation develops following administration of mRNA COVID-19 vaccines.

Due to its narrow therapeutic index, meaning the distinction between toxic and non-toxic doses is marginal, there could be significant benefits in dosage reduction through the use of DehydraTECH, while maintaining therapeutic delivery levels.

DIAB-A22-1, is a 56-day animal program undertaken by a third-party testing laboratory located in Canada to explore the ability of DehydraTECH-CBD to potentially affect treatment of diabetes.

The laboratory work is expected to complete in the second quarter of calendar 2023 with data and reporting to follow thereafter.

Lexaria is exploring the use of DehydraTECH-CBD for the treatment of diabetes due to its evidenced the safety and efficacy of DehydraTECH-CBD in human hypertension studies and the strong connections between heart disease, hypertension, and diabetes.

Diabetes is a disease whereby the body does not produce sufficient insulin, leading to higher-than-normal levels of sugars in the blood.

Risks of kidney disease, vision loss, heart and cardiovascular disease and more are greatly enhanced by sufferers of diabetes.

Because diabetes is often closely connected to obesity, it is a chronic and growing problem around much of the world.

Lexaria has evidenced the efficacy of DehydraTECH-CBD in human hypertension studies with no serious side effects.

The connections between hypertension and dementia have been established in recent clinical studies.

Individuals who have high blood pressure are more likely to develop vascular dementia, which is the second most common form of dementia following Alzheimer’s disease.

Dementia is a term describing the loss over time of cognitive abilities related to memory, language, problem solving abilities and behaviour.

Certain trials are underway to investigate the use of nicotine for possible utility related to dementia, where some clinical success has already been reported.

Others have conducted research evidencing therapeutic potential of cannabinoids including CBD in a variety of neurodegenerative diseases.

Alzheimer’s is the most common form of dementia and accounts for at least 60% of all cases, and nicotine is showing promising results related to its treatment.

According to the World Health Organization, 55 million people are currently suffering from dementia with roughly 10 million additional people being diagnosed each year, with 78 million expected to be living with some form of dementia by 2030.

Drugs used to treat dementia represented a $15.5 billion market in 2021, expected to double to a $32.3 billion annual market by 2030, in part due to the generally aging populations.

Lexaria has previously demonstrated in animal studies that DehydraTECH-CBD crosses the blood brain barrier (“BBB”) much more effectively than originally thought possible.

Given the propensity of DehydraTECH-CBD to cross the BBB;

the established fact that DehydraTECH-CBD lowers human blood pressure;

and the fact that CBD is known to act with vasodilation properties, we intend to investigate whether DehydraTECH-CBD might have some positive effect on dementia.

This efficacy animal study, DEM-A22-1 will evaluate if DehydraTECH-CBD may potentially have therapeutic utility against dementia.

The laboratory work is expected to complete in second quarter of 2023.

Depending on the outcomes, Lexaria is considering additional studies that might utilize either DehydraTECH-processed nicotine alone or in combination with CBD.

Rheumatic Diseases:

Lexaria is considering an animal study to investigate the ability of DehydraTECH-CBD to potentially affect treatment of rheumatoid disease.

Rheumatic diseases are autoimmune and inflammatory diseases that cause the immune system to attack joints, bones, muscles and organs.

There are over 100 rheumatic diseases including Fibromyalgia, Lupus, Osteoarthritis and Rheumatoid Arthritis.

The Rheumatoid Arthritis therapeutics market alone is expected to be over $30 billion per year by 2025.

Lexaria has yet to commence study RHEUM-A22-1 as we are in the process of evaluating potential third-party service providers and suitable animal models to do so.

The results of our investigative work on the pharmacokinetic performance of DehydraTECH 2.0 nicotine formulations, specifically via the oral buccal/sublingual route of administration, were released in October 2021.

We reported our Study NIC-A21-1 conducted in male beagle dogs, which demonstrated that DehydraTECH nicotine administered via the oral pouch product format required only 2 to 4 minutes to deliver nicotine levels in blood plasma comparable to levels achieved at 45 minutes with concentration-matched controls.

DehydraTECH-nicotine also reached statistically significant peak blood plasma levels up to 10-fold higher overall than controls (p=0.004) while still clearing from blood virtually as quickly as the controls.

Two nicotine formats were investigated in this study:

nicotine benzoate and nicotine polacrilex.

We found that the generic nicotine benzoate pouch required approximately 45 minutes to reach its peak delivery rate whereas the DehydraTECH nicotine benzoate pouch reached peak delivery rates at both 8 minutes and again at 30 minutes.

It was found that 4 minutes after the pouch was placed in the mouth, the DehydraTECH-nicotine had reached a higher delivery level than the generic achieved at any point during the study.

Similarly, the generic nicotine polacrilex pouch also required approximately 45 minutes to reach its very subdued peak delivery rate while the DehydraTECH nicotine polacrilex pouch achieved a comparable level in just 2 minutes.

The DehydraTECH nicotine polacrilex pouch delivered over 10 times the nicotine level in blood plasma at peak than the generic version while still clearing from blood virtually as quickly as the controls.

In November of 2022 we received independent review board approval for human clinical nicotine study NIC-H22-1, a 36-person human PK randomized, double blinded, cross-over study conducted in current cigarette smokers, wherein each person will visit the laboratory to be dosed three times over a period of weeks.

During each visit only one oral nicotine pouch will be administered and evaluated:

Lexaria’s animal study utilized a vehicle-controlled, acute animal seizure model induced by electrical stimulation (“MES”), with DehydraTECH-enhanced CBD 2.0 formulations administered at lower doses than were required with Epidiolex to inhibit seizures.

EPIL-A21-1 found that dosages of 50 mg/kg and 75 mg/kg DehydraTECH-CBD was more efficacious than Epidiolex in reducing or eliminating seizure activity;

however 100 mg/kg doses of Epidiolex as compared to DehydraTECH-CBD was shown to have greater efficacy in eliminating seizure activity.

Lexaria performed a second MES animal seizure study to measure time to peak efficacy at various post-dosing time points.

At the 30-minute timepoint, 50% of the animals dosed with DehydraTECH-CBD showed partial reduction or full elimination of seizure activity whereas 100% of the Epidiolex-dosed animals were exhibiting full seizure activity.

At the 60-minute timepoint 87.5% of the animals dosed with DehydraTECH-CBD showed partial reduction or full elimination of seizure activity compared to 62.5% of the Epidiolex-dosed animals showing partial reduction or full elimination of seizure activity.

Epidiolex showed some enhanced seizure reduction capabilities at later time points in the study.

Additional work has been completed in this animal study program EPIL-A21-1 to establish an ED50 (i.e., the dose required to achieve seizure inhibition in 50% of the animals tested) for DehydraTECH-CBD, where ED50 determination is a common performance metric in preclinical animal studies for developmental therapeutics.

This study confirmed that the DehydraTECH 75 mg/Kg dose was established as the calculated ED50.

The results from EPIL-A21-1 may result in further studies should funding and resources be available.

Hormone Therapy:

During fiscal 2023, Lexaria completed and reported on its HOR-A22-1 tolerability and PK pilot study in animals using a DehydraTECH-estradiol composition.

Results evidenced that the DehydraTECH-estradiol formulation achieved an average peak concentration in the bloodstream that was roughly nine times (900%) higher than that achieved with the control formulation.

As well, because estradiol is known to be quickly converted into the metabolite estrone by cells in the uterus, mammary glands and liver, estrone levels were also quantified in the study, which revealed that levels of the estrone metabolite were also significantly higher with the DehydraTECH formulation showing greater than a twenty-fold (2,000%) improvement in delivery as compared to the control formulation.

Lexaria also discovered that the area under the curve findings for its DehydraTECH-estradiol formulation were at least fifteen times (1,500%) greater for estradiol and over one hundred and twenty-five times (12,500%) greater for estrone than the control.

The results from this study may lead Lexaria to investigate the potential use of DehydraTECH for human hormone therapies.

DIAB-A22-1, was a 56-day animal program undertaken by a third-party testing laboratory located in Canada to explore the ability of DehydraTECH-CBD to potentially treat diabetes, a disease whereby the body does not produce sufficient insulin, leading to higher-than-normal levels of sugars in the blood.

The results from this study were announced in March and June 2023 and evidenced the following achievements of DehydraTECH-CBD in obese diabetic-conditioned animals:

Lowered blood glucose levels by 19.9% (p<0.05)

Lowered overall body weight by 7% sustained over 8 weeks

Witnessed a statistically significant increase in locomotor activity (p<0.05)

Lowered triglyceride levels by more than 25% (p<0.007)

Lowered blood urea nitrogen levels by 27.9% (p<0.001)

Based on these results, Lexaria is planning to undertake a human diabetes clinical study to investigate whether any of these improvements will be evidenced in humans.

Subject to completion of a study design that receives the necessary IRB approval, Lexaria intends to conduct this human diabetes study at the same medical research hospital in Europe that it has utilized for its recent human clinical hypertension studies.

Lexaria had previously demonstrated in animal studies that DehydraTECH-CBD crosses the blood brain barrier (“BBB”) much more effectively than originally thought possible.

Based on this validation, in November 2022 we commenced an investigation as to whether DehydraTECH-CBD might have some positive effect on dementia.

The inconclusive results from the efficacy animal study, DEM-A22-1 were reported on in June 2023, with the determination that any future investigations using DehydraTECH-CBD as a treatment for dementia will require an improved study design with a longer duration with the potential addition of DehydraTECH-nicotine which may have additive efficacy potential.

Smoking Cessation:

In November of 2022 we received independent review board approval for human clinical nicotine study NIC-H22-1, a 36-person human PK randomized, double blinded, cross-over study conducted in current cigarette smokers, wherein each person visited the laboratory to be dosed three times over a period of weeks.

During each visit only one oral nicotine pouch was administered and evaluated:

either DehydraTECH-Nicotine;

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or Zyn™ brand manufactured by Swedish Match™.

Predetermined questionnaires for subjective evaluation will be used for each oral nicotine pouch, and blood samples will be taken 8 times per visit to conduct objective evaluations related to quantity of nicotine in blood at various time points.

Data on vital signs such as temperature, blood pressure, heart and respiratory rate will also be collected.

Subjective evaluations related to throat burn, user experience, gastrointestinal experience will also be conducted.

Lexaria hopes to evidence that processing purified nicotine with DehydraTECH leads to better oral-tissue absorption and reduced negative experiences compared to currently marketed brands.

The study had earlier faced certain time extensions due to manufacturing and logistics, those issues since resolved.

The study is fully funded from internal company resources.

Lexaria will provide further updates and any relevant material findings in due course.

Predetermined questionnaires for subjective evaluation will be used for each oral nicotine pouch, and blood samples were taken 8 times per visit to conduct objective evaluations related to the quantity of nicotine in blood at various time points.

Subjective evaluations related to throat burn, user experience, gastrointestinal experience were also conducted.

Dosing for this study completed in May 2023 and the resulting data confirmed that Lexaria’s oral nicotine pouch was statistically significantly faster in the median time required to reach comparable maximum nicotine concentrations within the bloodstream, than both on!

(15% faster) and ZYN (over 20% faster).

Participants in the study also answered a number of subjective questions about their experience with the three oral pouch products and the results indicated that the Lexaria oral pouches resulted in no moderate to severe graded hiccups, lowest frequency of severe nausea and several instances of the highest positive endorsement ratings with respect to tolerability, pleasure, euphoria & head rush and mouth & throat burn.

Lexaria now seeks to commercialize DehydraTECH-Nicotine with suitable industry partners based on its clinical and intellectual property advancements.

Business Development

Approximately 1.28 billion people worldwide suffer from hypertension - elevated blood pressure - and is recognized as one of the world’s top health problems.

Approximately 1.28 billion people worldwide suffer from hypertension - elevated blood pressure - and it is recognized as one of the world’s top health problems.

Only 21% of people with hypertension have it under control which demonstrates enormous unmet need.

Among persons 50 years of age or older, isolated systolic hypertension is the most common form of hypertension, and systolic blood pressure becomes more important than diastolic blood pressure as an independent risk predictor for coronary events, stroke, heart failure, and end-stage renal disease.

Among persons 50 years of age or older, isolated systolic hypertension is the most common form of hypertension, and systolic blood pressure can be more important than diastolic blood pressure as an independent risk predictor for coronary events, stroke, heart failure, and end-stage renal disease.

Drugs focused on blood pressure and related conditions are some of the best selling drugs in the world.

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There are several hypertension drugs that each generate $1 billion per year or more in revenue.

Hypertension valued at $28 billion per year is one subset of the broader cardiovascular disease category, which is expected to be a $146 billion market in 2022.

Hypertension, valued at $20.5 billion in 2021 and expected to reach $39.5 billion by 2030, is one subset of the broader cardiovascular disease category, which is estimated as a $82.5 billion market in 2023.

Lexaria is determined to fill the need for a safe, effective, tolerable treatment for hypertension and have a meaningful impact on comorbidity-related costs and deaths with our DehydraTECH-CBD.

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Lexaria has retained the services of a regulatory affairs and quality assurance consultancy group that assisted us with the preparation of our pre-IND meeting with the FDA.

They are now assisting us with our protocol finalization and IND filing.

On June 6, 2022, we successfully filed a pre-IND meeting request with the U.S.

Food and Drug Administration (“FDA”).

The FDA has responded to and confirmed Lexaria’s filing and requested a pre-IND meeting, which formally initiates communications with the FDA regarding development of Lexaria’s DehydraTECH-CBD for the treatment of hypertension.

The purpose of the pre-IND meeting is to confirm the details and acceptability of Lexaria’s ongoing IND-enabling development program to be completed thereafter prior to proceeding with its full IND application filing.

On August 10, 2022, the FDA sent a positive written response from its pre-IND meeting regarding DehydraTECH-CBD for the treatment of hypertension.

The FDA confirmed that it has agreed with Lexaria’s proposal to pursue a 505(b)(2) new drug application (“NDA”) regulatory pathway for our program.

This is advantageous because this abbreviated pathway, as it is often described, typically enables a quicker route to commercial approval than a traditional 505(b)(1) NDA pathway.

They are now assisting us with our protocol finalization and IND filing which we hope to submit by the end of the calendar year.

During the 2022 fiscal year, we filed a pre-IND meeting request with the U.S.

Food and Drug Administration (“FDA”) regarding the development of Lexaria’s DehydraTECH-CBD for the treatment of hypertension.

The FDA sent a positive written response from its pre-IND meeting regarding DehydraTECH-CBD and confirmed its agreement with Lexaria’s proposal to pursue a 505(b)(2) new drug application (“NDA”) regulatory pathway for its program.

This abbreviated pathway typically enables a quicker route to commercial approval than a traditional 505(b)(1) NDA pathway.

Within this communication the FDA agreed that additional non-clinical studies are not required prior to initiation of the DehydraTECH-CBD IND program, given the compelling data presented by Lexaria and others regarding the safety and tolerability of CBD.

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Lexaria’s new IND-enabling program is made possible through successfully completed studies that have provided support for more ambitious commercial goals.

Recently achieved successful results from two human clinical pharmacodynamic hypertension studies and a 2018 human clinical pharmacokinetic (“PK”) study, along with a number of successful animal studies demonstrating PK performance and the molecular characterization work completed through Canada’s National Research Council, have together established a strong body of evidence for Lexaria’s DehydraTECH-CBD.

Recently achieved successful results from HYPER-H21-4 study along with the historical results from its HYPER-H21-3, HYPER-H21-3, HYPER-H21-1 and our 2018 human clinical study, along with a number of successful animal studies demonstrating pharmacokinetic (“PK”) performance;

and the molecular characterization work completed through Canada’s National Research Council, have together established a strong body of evidence for Lexaria’s DehydraTECH-CBD.

These studies have shown that DehydraTECH-CBD demonstrates superior bio absorption upon oral administration and is effective at reducing blood pressure with no significant unwanted side effects.

Subject to budgetary constraints, Lexaria plans to continue with in vitro and in vivo studies testing the absorption of many API’s – CBD, vitamins, PDE5 inhibitors, antiviral drugs, nicotine, and others – to substantiate the effectiveness of DehydraTECH.

More than simply satisfying scientific curiosity, successful tests are expected to lead to increased awareness and acceptance of our technology as a meaningful effective alternative to current delivery methods.

Therefore, absorption tests could increasingly become an important element leading towards higher rates of acceptance of our technology licensing initiatives.

More than 99% of all nicotine consumed worldwide is delivered through smoking cigarettes.

Worldwide, approximately 6m deaths per year are attributed primarily to the delivery of nicotine through the act of smoking.

This is according to the Centers for Disease Control and Prevention, which also estimates that over $170b per year is spent just in the U.S.

During fiscal 2023, Lexaria has been working diligently with its third-party regulatory and clinical advisors in the development of its IND study protocol, has interviewed and selected its contract research organization, InClin Inc.

as announced on April 24, 2023, and has been developing its clinical trial DehydraTECH-CBD drug product in order to obtain the stability data needed for its IND application to the FDA.

As announced in its news release of August 30, 2023, Lexaria is waiting on one of its third party material suppliers to complete certain analytical and stability testing, which we expect to be completed prior to the end of the calendar year, to be followed with the filing of our IND application with the FDA.

Most nicotine consumed worldwide is delivered through smoking cigarettes.

Worldwide, over 6 million deaths per year are attributed primarily to the delivery of nicotine through the act of smoking.

This is according to the Centers for Disease Control and Prevention, which also estimates that over $170 billion per year is spent just in the U.S.

on direct medical care costs for adult smokers.

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The oral nicotine pouch category is one of the fastest growing segments of the nicotine industry due in part to its reduced risk health outcomes as noted by the FDA.

which avoids harmful lung outcomes experienced by smokers or vapers, The global market for the oral nicotine pouch category was US$2.33 billion in 2020 and is expected to reach $21.84 billion in 2027.

This delivery method, in the white pouch format specifically, involves absorption primarily through the buccal tissues of the mouth, of purified nicotine that has been separated from most other harmful compounds in the tobacco leaf and avoids harmful lung outcomes experienced by smokers or vapers, The global market for the oral nicotine pouch category was US$2.33 billion in 2020 and is expected to reach $21.84 billion in 2027.

DehydraTECH-Nicotine Research

Lexaria has previously completed ingestible nicotine in vivo (animal) absorption study work.

In a 2018 we conducted a study designed to assess the relative ingestible nicotine absorption performance of DehydraTECH-powered formulations when compared to concentration-matched control formulations in rats.

DehydraTECH formulations delivered some major nicotine absorption performance improvements:

During fiscal 2023, Lexaria expanded on its previously completed ingestible nicotine in vivo (animal) absorption study work conducted in 2018, which had found that DehydraTECH formulations delivered some major nicotine absorption performance improvements in rats:

1,160% faster delivery of equivalent peak quantities of nicotine to the bloodstream than achieved with controls (within 15 min vs.

2.9 hours), 148% gain in the quantity of peak nicotine delivery to the bloodstream relative to controls, 560% higher brain levels of nicotine where nicotine effects are focused, compared to controls, lower urine levels of nicotine excreted than controls, for enhanced nicotine activity and bioavailability over the course of the study, lower quantities of key liver metabolites in the bloodstream than controls as hypothesized, suggesting bypass of first pass liver metabolism.

The DehydraTECH formulations generally achieved faster absorption, higher peak absorption, and higher overall quantities of nicotine, on average, in the blood than the concentration-matched control formulations at both the 1mg and 10 mg/Kg doses tested.

Furthermore, there were no obvious signs of gastrointestinal distress such as vomiting or diarrhea indicating that the animals appeared to tolerate the treatment well.

Nicotine blood levels were evaluated multiple times over a period of 8 hours after dosing.

In the 10mg/Kg dosing arm, the control formulation required nearly 3 hours to reach similar levels of blood absorption that the DehydraTECH formulation reached in only 15 minutes.

Furthermore, the DehydraTECH formulation went on thereafter to demonstrate peak plasma levels that were 148% of those achieved by the control formulation.

If replicated in human studies, these findings are suggestive that DehydraTECH could prove more effective in elevating blood nicotine levels through edible formats much more quickly and substantially than previously theorized, potentially making ingestible nicotine preparations a viable alternative to today’s available product formats while also leading to a more rapid nicotine craving satiation.

Analysis of the liver metabolites revealed that overall levels in the blood of two of the three metabolites studied were higher in the control group than in the DehydraTECH formulation group at the 10 mg/Kg dose.

The study also revealed that the DehydraTECH formulation at the 10 mg/Kg level achieved up to 5.6-times as much nicotine upon analysis of the rat brain tissue than was recovered with the matching control formulation.

These findings together perhaps suggest prolongation of nicotine effectiveness with the DehydraTECH formulation which may also be beneficial in humans to control cravings over an extended time-period from a single edible nicotine dose.

Following the above study, additional results were reported in August 2018 by way of a follow-up third-party in vivo study including two groups of 20 animals.

This study further demonstrated delivery of nicotine in edible form at each of the 2, 4, 6, 8 and 10-minute intervals post-dosing, with 90.2% greater delivery than the concentration-matched control formulation by the 10-minute mark (95% CI;

p=0.044), and significantly greater absorption levels than the control formulation at all subsequent time points in the study.

Speed of onset is a key attribute for oral drug administration, and it is of particular importance for the consideration of non-inhalation nicotine delivery formats.

Some of the highlights of this study were:

79% improvement in peak blood levels;

94% improvement in total quantity of nicotine delivered to the blood during the 60-minute course of the study and;

Lexaria’s technology delivered nicotine into the blood stream by the first time interval of blood sampling at the 2-minute mark.

Nicotine Patent

With the grant during the year ended August 31, 2022, of our Australian patent for nicotine, Lexaria believes that further potential patent awards would serve to support significant competitive advantages in the nicotine white pouch category, as well as other oral nicotine product formats such as pills, tablets, lozenges, capsules, gums and sprays.

A similar patent filing has been made in the USA.

As Lexaria demonstrates the benefits of DehydraTECH enabled oral nicotine pouches as an alternative to smoking cigarettes as a delivery method for nicotine, we anticipate the possibilities of engaging in licensing arrangements with major tobacco companies.

Given the rapid progress Lexaria is making towards development of oral nicotine products, the intellectual property protection afforded by this patent and other similar patent applications, could be meaningful towards building stakeholder value.

As noted above, Lexaria conducted its first human clinical trial (NIC-H22-1) to test its DehydraTECH-Nicotine formulation in an oral pouch format which confirmed that DehydraTECH-processed nicotine was faster than other commercial oral pouch products in the median time required to reach comparable maximum nicotine concentrations within the bloodstream.

Nicotine Patents

In June 2023, Lexaria received its Canadian patent for Compositions Infused With Nicotine Compounds and Methods of Use Thereof which builds on its previously issued Australian patent within the same family.

In July 2023 Lexaria received its first US patent in a new patent family entitled Compositions and Methods For Sublingual Delivery of Nicotine which includes claims for many types of nicotine, including nicotine benzoate, nicotine ditartrate, nicotine citrate, nicotine polacrilex, and many others, for use in sublingual delivery formats like oral pouches.

In August 2023, Lexaria received its first Canadian patent in a new patent family entitled Lipohilic Active Agent Infused Tobacco Leaves and/or Tobacco Materials and Methods of Use Thereof ”.

This patent recognizes Lexaria’s innovations in infusing tobacco leaves directly with drugs or active molecules such as nicotine with or without cannabinoids for potential applications such as treating nicotine addiction.

Lexaria believes that further potential patent awards in these families would serve to support significant competitive advantages in the nicotine white pouch category, as well as other oral nicotine product formats such as pills, tablets, lozenges, capsules, gums and sprays.

As Lexaria demonstrates the benefits of DehydraTECH enabled oral nicotine pouches as an alternative to smoking cigarettes as a delivery method for nicotine, there are increased possibilities of engaging in licensing arrangements with major tobacco companies.

Nicotine Collaborations

In April of 2022 the Company announced new agreements with Altria Client Services, LLC (“Altria”) in effect until March 31, 2023.

Under the terms of these agreements, Lexaria will receive a fee to provide certain DehydraTECH powder-based nicotine formulations to be evaluated by Altria.

Under the terms of these agreements, Lexaria received a fee to provide certain DehydraTECH powder-based nicotine formulations to be evaluated by Altria.

Lexaria is not aware of Altria’s current intentions with regard to DehydraTECH.

In 2019, the Company entered into a definitive agreement with Altria to fund the R&D of DehydraTECH technology as it relates to nicotine.

In exchange for a minority equity interest (16.67%) in our subsidiary Lexaria Nicotine LLC, Altria was to fund up to $12m for Lexaria Nicotine to conduct milestone-based clinical investigations utilizing DehydraTECH.

In exchange for a minority equity interest (16.67%) in our subsidiary Lexaria Nicotine LLC, Altria was to fund up to $12 million for Lexaria Nicotine to conduct milestone-based clinical investigations utilizing DehydraTECH.

Altria did not exercise its First Warrant Tranche to invest a further staged payment into Lexaria Nicotine and that warrant therefore expired on October 8, 2020 along with Altria’s former exclusive access to DehydraTECH for nicotine in the US market.

The Company began out-licensing our technology in the US in 2018 for the use of DehydraTECH for vitamins and food and beverages infused with cannabinoids in concentrations greater than 0.3% THC.

In 2019 we granted US licences for DehydraTECH enabled CBD products and also entered into a definitive agreement in the US for licencing DehydraTECH.

In December of 2020, Lexaria sold our non-pharmaceutical THC-related assets held within our wholly owned subsidiary Lexaria CanPharm ULC to Hill Street Beverage Company Ltd.

As a part of the sale agreement, the Company transferred our THC licence contracts for manufacturers that sell, or intend to sell, THC infused products in the US and Canada.

In January of 2021 the global rights to DehydraTECH technology to make non-pharmaceutical products that contain over 0.3% THC and other psychoactive cannabinoids was sold to Hill Street Beverages Company Inc.

Lexaria has retained the rights to use DehydraTECH with THC and other cannabinoids for pharmaceutical purposes.

Lexaria’s investigation of enhanced delivery characteristics of THC utilizing DehydraTECH technology is now focused on medical applications.

Our study findings have demonstrated rapid delivery, increased overall THC delivery, and higher brain tissue delivery;

all of which is consistent with the wants and needs of medicinal THC customers.

During the last fiscal quarter of 2022, Premier Wellness Science Co.

Ltd., (“Premier”) of Japan agreed to purchase the rights to DehydraTECH technology 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, hair-care, lip-care and cosmetics products.

Exclusive rights are subject to two previously issued licenses for use of DehydraTECH in Japan, which remain valid.

Lexaria will not be issuing any further licenses in Japan for non-pharmaceutical cannabinoid 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 a minimum of $4.5m.

Other Research

Lexaria’s IND study will consume the majority of its financial resources and management time once it is undertaken, however, as noted above, based on the results from its DIAB-A22-1 study, Lexaria is also planning to undertake a human diabetes clinical study to investigate whether any of the improvements witnessed in the animal subjects would also be evidenced in humans.

Lexaria intends to complete a study design and will endeavour to obtain ethics board approval for this human diabetes study by the end of calendar 2023.

Lexaria is also preparing a study program, pending funding availability, to investigate whether DehydraTECH could have any effect on GLP-1 drugs currently approved by FDA for treatment of diabetes and for weight loss.

Lexaria has strategically structured its organization to obtain the most value from its DehydraTECH patented technology and has provided its subsidiary companies with exclusive rights to use DehydraTECH or sublicense DehydraTECH with specific molecules, namely, THC, CBD, Nicotine, and all other molecules.

Lexaria Nicotine LLC, (16.667% owned by Altria Ventures Inc.) holds the exclusive rights to the use or sublicense of DehydraTECH with nicotine molecules.

As at the fiscal year ended August 31, 2023, Lexaria Nicotine LLC has one perpetual non-exclusive global license issued to Altria Client Services LLC for DehydraTECH-Nicotine.

In January 2021, Lexaria’s wholly-owned subsidiary, Lexaria CanPharm ULC sold its exclusive license rights and assigned all sublicenses for the use of DehydraTECH with non-pharmaceutical THC-related assets to Hill Incorporated (formerly Hill Street Beverage Company Inc.) ("Hill Inc.").

The remaining consideration outstanding for the acquisition of this license, is a promissory note bearing an original value of CDN$2 million which is reduced quarterly based on royalty payments of 5% of the gross proceeds received by Hill Inc.

from DehydraTECH infused products or sublicenses issued for the use of DehydraTECH.

Lexaria Hemp Corp.

holds the exclusive license to the use of DehydraTECH with cannabis that contains less than 0.3% THC for non-pharmaceutical products.

As at the fiscal year ended August 31, 2023, Lexaria Hemp Corp.

had the following active licenses:

Non-exclusive license with Hill Inc.

for all product formats globally;

Non-exclusive license with Boldt Runners Corporation for oral pouch and oral mulch products in the US, South Africa, Europe and Japan;

Non-exclusive license with Cannfections Group Inc.

for chocolates and candy in Canada;

Non-exclusive license with Bevnology LLC for all product formats globally excluding Japan, Korea and China;

Exclusive perpetual license (other than the rights held by Hill Inc.

and Boldt Runners Corporation) with Premier Anti-Aging Co.

(as assigned pursuant to its absorption merger with Premier Wellness Science Co.

Ltd.) (“Premier”) for all product formats in Japan.

In order for Premier, a cosmetics and skin-care company listed on the Tokyo Stock Exchange, to continue to retain ongoing exclusivity for DehydraTECH in Japan, it must take-over the minimum quarterly payments to Lexaria which, during the first five years of the agreement, amount to a minimum of $4.5 million.

The license for the Japanese market is perpetual assuming that Premier submits all required payments.

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

Total revenue is anticipated to be significantly greater than the minimum payments if Premier is capable of meeting its forecasted revenue targets.

If Premier achieves even their worst-case projected penetration into the Japanese non-pharmaceutical CBD market, then based on their projections Lexaria could expect to receive annual payments of over $5 million by the fifth year of the contract.

Following rigorous product development and formula optimization Premier is expected to introduce the “Ko” brand containing Lexaria’s DehydraTECH delivery technology in 2023.

The product line focuses on the endocannabinoid system and circadian rhythm to support the health and wellness.

It will contain CBD and other botanical extracts.

Premier will create its own e-commerce infrastructure and digital marketing campaigns in collaboration with its parent company, Premier Anti-Aging Co., Ltd.

Originally founded in 2009, Premier Anti-Aging Co.

it is a large distributor and logistics supplier for cosmetics, OTC pharmaceuticals and nutraceuticals to wholesalers and retailers.

It has shipped more than 3.5 billion products in its most recent fiscal year comprised of over 50,000 products distributed to over 50,000 retail stores.

Lexaria, on June 8, 2022, awarded AnodGen Bioceutical of Ireland a five-year, non-exclusive DehydraTECH license from its wholly-owned subsidiary, Lexaria Pharmaceutical Corp.

The license is valid within Europe including the UK, Australia and New Zealand, for pharmaceutical and medical product applications incorporating DehydraTECH-infused psychoactive cannabinoid powders and medical product applications incorporating DehydraTECH-infused non-psychoactive cannabinoid powders.

AnodGen will pay royalty fees to Lexaria for all cannabinoid powders sold that utilize the DehydraTECH technology.

AnodGen has the right to manufacture and sell these DehydraTECH-infused powders to third party companies for their own products that are designated by a national regulator as a medical product, drug, nutraceutical, pharmaceutical or biopharmaceutical, as applicable, under its cannabinoid product license rights.

Consumer products purchased without physician or medical professional consultation are not permitted under the terms of this License.

AnodGen is expected to have their new facility in Ireland fully operational in 2023

On June 21, 2022, the Company entered into two agreements with BevNology LLC.

The first agreement is a manufacturing operating agreement that expands production capabilities for Lexaria’s own growing list of business-to-business (“B2B”) clientele interested in purchasing DehydraTECH-powered active ingredients for consumer packaged-goods.

A new processing facility custom-built by BevNology increases and broadens their production capacity and is now serving Lexaria’s B2B clients.

Lexaria has installed specialized DehydraTECH manufacturing equipment into the new facility as it prepares for future growth in its B2B ingredient processing business.

The second agreement is a commercial license agreement that empowers BevNology to offer DehydraTECH products with active ingredients derived from hemp, including CBD under BevNology and partnered brands.

For powdered DehydraTECH formulations this agreement is non-exclusive.

For liquid DehydraTECH formulations, where BevNology has specialized skills and capabilities, the license is non-exclusive in most areas of the world but includes limited exclusivity rights in the United States only that require certain minimum fee payments in order to maintain those rights.

Lexaria will receive royalties from BevNology as a result of their utilization of this license.

The only countries specifically excluded under this license are Japan, the Republic of Korea, and the People’s Republic of China.

On September 16, 2021, Lexaria Hemp entered into a 10-year license with GlobalCanna Inc.

for the non-exclusive use of DehydraTECH in multiple CBD infused products in Canada.

Pursuant to the terms of the agreement, GlobalCanna is required to pay minimum quarterly fees beginning in the quarter ended November 30, 2022.

Lexaria Pharmaceutical Corp.

(“LEXX Pharma”) holds the exclusive rights to license DehydraTECH in connection with all molecules other than cannabis and nicotine, with the exception that it can produce and sublicense rights to produce cannabis DehydraTECH products that required physician consultation and were intended to treat a therapeutic indication.

On July 26, 2023 LEXX Pharma agreed to limit its exclusive rights to the use or sublicense of DehydraTECH for all of the noted molecules solely in connection with products that were created with the intention to treat a therapeutic indication and required physician consultation.

As of the fiscal year ended August 31, 2023 LEXX Pharma had the following active licenses:

Non-exclusive license with AnodGen Bioceutical for pharmaceutical and medical product applications incorporating DehydraTECH-infused psychoactive cannabinoid powders and medical product applications incorporating DehydraTECH-infused non-psychoactive cannabinoid powders within Europe including the UK, Australia and New Zealand.

This license is dormant and we are not aware if AnodGen will be capable of exercising their business plan.

Non-exclusive license with Valcon Medical A/S for bulk powder formats, as solid oral dosage forms such as powder-filled capsules, and compressed tablets, pills and oral melts, and in topical creams or lotions with or without patch integration that incorporate DehydraTECH-infused cannabinoids for the purposes of medical product applications within Europe including the UK.

Valcon has not communicated their intentions or timeline of development of products utilising this license.

On July 26, 2023, Lexaria issued its new subsidiary, Lexaria Nutraceutical Corp., an exclusive license to the use of DehydraTECH for all molecules, excluding those associated with nicotine or cannabis, solely in association with non-pharmaceutical products.

As at the fiscal year ended August 31, 2023, Lexaria Nutraceutical Corp.

had the following active licenses:

Non-exclusive license with Bevnology LLC for various non-pharmaceutical product formats in the US;

Exclusive, world-wide, perpetual and sublicenseable license with SulfoSyn Limited for the use of DehydraTECH with the molecule sulforaphane;

The biopharmaceutical industry is characterized by intense competition and rapid innovation.

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Compliance with Government Regulation

More than thirty-nine states in the U.S.

have passed some form of legislation related to that state’s permission to grow, cultivate, sell, or use marijuana and/or CBD for medical purposes or for recreational use.

Legislation is not necessarily harmonious between states and in most circumstances, it is not legal to transport cannabis-related products across state lines.

Farm Bill, was passed in December 2018, and removed certain restrictions on advertising, marketing, banking, and other financial services as well as allowing interstate commerce for hemp and hemp-derived CBD.

It also facilitated the removal of barriers for intellectual property protections under federal law such as patents and trademarks.

However, the Farm Bill preserves the FDA’s authority to regulate products that contain hemp-derived CBD and to date the FDA has not issued an approval for any CBD products, other than one cannabis-derived and three cannabis-related drug products.

Accordingly, the ambiguity regarding the incorporation of CBD into ingested and topical products has had significant impacts on the industry segments to which we license DehydraTECH and could potentially change some of the regulatory compliance risks that may affect our business.

As well, while more than thirty-nine states in the U.S.

have passed some form of legislation related to that state’s permission to grow, cultivate, sell, or use marijuana and/or CBD for medical purposes or for recreational use, legislation is not necessarily harmonious between states and in most circumstances, it is not legal to transport cannabis-related products across state lines.

Lexaria legally conducts R&D on cannabis ingredients in our Canadian federally licensed laboratory in compliance with all federal and local Canadian laws.

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As a result of the possibility of Lexaria being involved in a number of disparate business sectors, compliance with government regulations could require significant resources and expertise from our Company.

Farm Bill, passed in December 2018, and the ambiguity regarding the incorporation of CBD into ingested and topical products has had significant impacts on the industry segments that we operate in.

This could potentially change some of the regulatory compliance risks that may affect our business.

The bill includes lifting restrictions on advertising, marketing, banking, and other financial services as well as allowing interstate commerce for hemp and hemp-derived CBD.

It is also facilitating the removal of barriers for intellectual property protections under federal law such as patents and trademarks, as well as several other measures that may positively impact these industry segments overall.

The effects the Bill may have on other regulatory bodies and their regulations will require ongoing monitoring to determine the timing and outcome of any revisions.

Employees and Contractors

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Our Company relies on the business and technical experience of our existing management, on the technical abilities of consulting experts, and on the technical and operational abilities of its operating partner companies to identify and evaluate business opportunities.

We currently have seven full time salaried employees under contract and may add personnel to expand our internal R&D capacity.

We currently have five full time salaried employees under contract and may add personnel to expand our internal R&D capacity.

None of our employees are represented by a labor union and we consider our employee relations to be good.

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has the following wholly owned subsidiaries;

Lexaria CanPharm ULC, Lexaria CanPharm Holding Corp., PoViva Corp., Lexaria Hemp Corp., Kelowna Management Services Corp.

and Lexaria Pharmaceutical Corp., and our majority owned (83.333 .

Lexaria CanPharm ULC (which is wholly-owned by Lexaria CanPharm Holding Corp.),

Lexaria CanPharm Holding Corp.,

Poviva Corp.,

Lexaria Hemp Corp.,

Kelowna Management Services Corp.,

Lexaria Nutraceutical Corp.

Lexaria Pharmaceutical Corp.,

and our majority owned (83.333 .

%) subsidiary Lexaria Nicotine LLC.

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Available Information

Lexaria’s common stock is quoted on the Nasdaq under the symbol “LEXX” and warrants are quoted under LEXXW.

Lexaria’s common stock is quoted on the Nasdaq under the symbol “LEXX” and certain warrants are quoted under LEXXW.

We file annual, quarterly, and current reports, proxy statements and other information with the U.S.

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Lexaria Bioscience Corp.

is a British Columbia based reporting issuer in Canada and as such, we are required to file certain information and documents at www.sedar.com

is a British Columbia based reporting issuer in Canada and as such, we are required to file certain information and documents at www.sedarplus.ca

Our corporate website is www.lexariabioscience.com.

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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 1. Business