What changed in this filing

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Item 9A. Controls and Procedures

2023-11-20 compared with 2022-11-28 · 98 added, 112 removed, 337 unchanged (38% of the section changed)

2 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 SECs rules and forms.

This information is accumulated and communicated to our management, including our Chief Executive Officer (also our Principal Executive Officer) and our Chief Financial Officer (also our Principal Financial and Accounting Officer) to allow for timely decisions regarding required disclosure.

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

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

This information is accumulated and communicated to our management, including our Chief Executive Officer (also our Principal Executive Officer and currently our acting Principal Financial and Accounting Officer) and our outsourced Chief Financial Officer to allow for timely decisions regarding required disclosure.

As of August 31, 2023, the end of our fiscal year covered by this report, we carried out an evaluation under the supervision and with the participation of our CEO and outsourced CFO of the effectiveness of the design and operation of our disclosure controls and procedures.

Based on the foregoing, our CEO and outsourced CFO concluded that our disclosure controls and procedures were effective as of the end of the period covered by this annual report.

Management’s Report on Internal Control over Financial Reporting

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Inherent Limitations on Effectiveness of Controls

Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors.

Internal control over financial reporting has inherent limitations which include but are not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors.

It is a process which involves human diligence and compliance and may be subject to lapses in judgment and breakdowns resulting from human failures.

9 unchanged sentences

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

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

In June 2023, Mr.

Downey was replaced with an outsourced CFO, and Chris Bunka accepted the role of Principal Financial Officer.

However, this change has not resulted in any changes in our internal controls over financial reporting that occurred during the year ended August 31, 2023, that have materially or are reasonably likely to materially affect our internal controls over financial reporting.

Other Information

5 unchanged sentences

Date First Elected

Date of Resignation

Christopher Bunka

1 unchanged sentence

John Docherty

President and Director

President and

Gregory Downey

3 unchanged sentences

Al Reese, Jr.

Catherine Turkel

Business Experience

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

Gregory Downey – Chief Financial Officer

Downey joined the Company was appointed Chief Financial Officer in April 2021 having joined the Company as Controller in January 2019 as Controller.

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

In addition, Mr.

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

Gregory Downey – Former Chief Financial Officer

Downey joined the Company as Controller in January 2019 and was then appointed Chief Financial Officer in April 2021 which position he resigned from in June 2023.

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

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

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

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

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

McKechnie was awarded Philip Morris Chairman’s Award for “recognition of extraordinary contributions having a significant and lasting impact on the Corporation”.

Reese has over 50 years’ experience in public and private businesses including as CFO of a formerly Nasdaq-listed energy company where he arranged finance transactions totalling over $10 billion dollars during his 20-year tenure.

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

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

Reese is also President and Chairman of a family charitable 501(c)-3 foundation and Interim Chairman of a charitable 501(c)-3 entity that focus on Bible literacy.

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

He has extensive experience at a senior level in financial services, finance transactions, investor relations, and more.

Turkel – Director

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Board and Committee Meetings

Our Board held seven formal meetings and several informal meetings during the year ended August 31, 2022.

Our Board held nine formal meetings and several informal meetings during the year ended August 31, 2023.

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

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Ted McKechnie, and Mr.

Nicholas Baxter.

Nicholas Baxter and the members held four formal meetings during the year ended August 31, 2023.

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

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Our Compensation Committee was created on July 2, 2020, the members of which are Mr.

Baxter, and Mr.

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

Turkel and Mr.

McKechnie, with all directors being “independent” pursuant to Nasdaq independence standards.

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

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

The Compensation Committee held five formal meetings during the fiscal year.

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

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The current members of the committee are Mr.

Baxter, both being independent directors of the Company.

Turkel, both being independent directors of the Company.

The committee’s purpose is to assist our Board in fulfilling its responsibilities by:

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

The Governance and Nominating Committee held two formal meetings during the fiscal year.

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

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All Other Compensation

Christopher Bunka Chairman, Chief

Executive Officer & Director (1)

Christopher Bunka (1)

Chairman, Chief Executive Officer & Director

John Docherty (2)

President & Director

Chief Financial Officer (3)

Allan Spissinger former Chief Financial Officer (4)

Greg Downey (3)

Former Chief Financial Officer

Allan Spissinger (4)

former Chief Financial Officer

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

2 unchanged sentences

Docherty as an employee effective January 1, 2022, and previously through consulting fees paid to his wholly owned company Docherty Management Ltd.

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

Downey was Chief Financial Officer from April 15, 2021 to June 6, 2023 and was considered an employee of the Company.

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

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Downey is entitled to participate in the Company’s stock option plan and an annual professional development allowance of C$5,000 per year.

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

Upon the occurrence of a change of control, Mr.

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

Termination without cause requires a minimum of 3 months notice or payment in lieu, plus one month salary for every year or partial year for each additional year of service.

Pursuant to the termination provisions of Mr.

Downey’s employment contract, the Company paid Mr.

Downey four months of salary in lieu of notice, two additional months salary as a retiring allowance and accrued vacation entitlement.

Grants of Plan-Based Awards Table

Lexaria issued the following plan-based awards to our named executive officers during the year ended August 31, 2022:

Compensation Securities

securities, and

percentage of

Stock Options

John Docherty,

Stock Options

During the year ended August 31, 2023, Lexaria did not issue any plan-based awards to our named executive officers.

Outstanding Equity Awards at Fiscal Year End

6 unchanged sentences

John Docherty

Greg Downey (1)

(1) The options held by Mr.

Downey expired on September 6, 2023.

Option Exercises

1 unchanged sentence

Compensation of Directors

As of August 31, 2022, three of our directors are compensated for their services.

As of August 31, 2023, four of our directors are compensated for their services.

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

Directors are also paid nominal amounts for their services on the Audit and Finance, Compensation, and the Governance and Nominating Committees and for acting as chair of such committees.

Three independent directors were granted an aggregate of 14,400 stock options with a calculated fair value of $44,827 and included in consulting expense during the fiscal year 2022.

Four independent directors were granted an aggregate of 64,600 stock options with a calculated fair value of $88,936 and is included in consulting expense during the fiscal year 2023.

Pension, Retirement or Similar Benefit Plans

9 unchanged sentences

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

During fiscal 2022, the Corporate Governance and Nominating Committee, with the assistance of the executive management, began vetting candidates who would enhance the board with their expertise in the bioscience industry sector and who would enhance the board with their diverse perspectives.

As the Company transitions its technology towards pharmaceutical applications, we will endeavour to engage individuals who are able to enhance the board with expertise in this industry sector and who also will enrich the board with their diverse perspectives.

Subsequent to the fiscal year end the board appointed Dr.

Turkel as a director on September 2, 2022.

During fiscal 2023, the board appointed Dr.

Turkel as an additional independent director.

This appointment aligns with the Company’s transition towards pharmaceutical applications and desire to build on its scientific expertise in this industry sector.

In addition, Dr.

Turkel’s appointment enriches the board with her diverse perspective and results in the Company being in compliance with Nasdaq’s board diversity rules.

Compensation Committee Report

5 unchanged sentences

Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.

Name and Address of Beneficial Owner

Name, Address & Position of Beneficial Owner

Directors and Executive Officers as a Group

Executive Officers and Directors Individually

Christopher Bunka

Kelowna BC, Canada

CEO, Chairman & Director

John Docherty

Toronto, ON, Canada

Kelowna, BC, Canada *

Ted McKechnie;

Toronto, ON, Canada *

President and Director

Nicholas Baxter*

Aberdeenshire, UK *

Al Reese Jr., Houston, TX, USA *

Directors and Executive Officers as a Group (6 persons)

Don Jackler, New York, NY, USA

Less than 1% beneficial ownership

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

Financial Services.

His holdings included 6,667 warrants exercisable at $10.50 and the following exercisable options:

26,000 at $5.83, 23,334 at $7.08, 15,000 at $6.23 and 30,000 at $2.91.

Director and President John Docherty holdings include 13,334 options exercisable at $9.60, 18,000 at $5.31, 18,334 at $7.08, 15,000 at $6.23 and 30,000 at $2.91.

CFO Greg Downey holdings include 12,000 options exercisable at $5.04, 5,000 at $5.31, 8,000 at $7.08, 10,000 at $6.23 and 11,000 at $2.91.

Director Ted McKechnie holdings includes 1,500 options exercisable at $5.31, 5,000 at $7.08, 1,900 at $6.23 and 3,400 at $3.39.

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

1,900 at $6.23 and 3,400 at $3.39.

Director Al Reese Jr.

holdings includes 3,400 options exercisable at $4.80 and 3,400 at $3.39.

Jackler is a consultant whose holdings include 100,000 warrants exercisable at $7.00.

Independent Director

Ted McKechnie*

Independent Director

Albert Reese Jr.*

Independent Director

* denotes a holding of less than 1%

Percentage of ownership is based on 8,091,650 common shares issued and outstanding as of the Record Date on a diluted basis.

Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such common shares.

Includes 254,412 shares held in the name of C.A.B.

Financial Services and 273,543 shares held directly by Christopher Bunka.

Includes 94,334 options held in the name of Christopher Bunka of which 64,334 are exercisable at $3.00 and 30,000 are exercisable at $2.91 and 6,667 warrants held in the name of C.A.B.

Financial Services all of which are exercisable at $10.50.

Includes 54,075 shares held in the name of Docherty Management Ltd.

and 64,668 options exercisable at $3.00 and 30,000 options exercisable at $2.91 held in the name of John Docherty.

Includes 3,400 options exercisable at $3.39, 8,400 options exercisable at $3.00, 18,200 options exercisable at $1.96 and 5,000 options exercisable at $0.87.

Includes 3,400 options exercisable at $3.39, 8,400 options exercisable at $3.00, 18,200 options exercisable at $1.96 and 5,000 options exercisable at $0.87

Includes 3,400 options exercisable at $3.39, 3,400 options exercisable at $3.00, 3,200 options exercisable at $1.96 and 5,000 options exercisable at $0.87

Includes 3,400 options exercisable at $3.04, 1,600 options exercisable at $1.96 and 5,000 options exercisable at $0.87

Includes 100,000 warrants which are exercisable at $7.00.

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

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As a result, the percentage of outstanding shares of any person as shown in the table above does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on August 31, 2023.

As of November 25, 2022, there were 5,950,998 shares of our common stock issued and outstanding.

As of November xx, 2023, there were 10,240,516 shares of our common stock issued and outstanding.

Changes in Control

9 unchanged sentences

Catherine Turkel.

We have determined that Mr.

McKechnie, Mr.

Reese and Ms.

We have determined that Messrs.

Baxter, McKechnie and Reese and Dr.

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

Our audit and finance committee consists of our Mr.

McKechnie, and Mr.

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

Our audit and finance committee consists of our Messrs.

Baxter, McKechnie, and Reese, the latter qualifying as an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K.

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

Our Compensation Committee consists of the following independent directors:

McKechnie, and Mr.

During fiscal year ended August 31, 2022, the compensation committee held one meeting to determine bonus compensation payable to the named executive officers in connection with the successful completion of certain performance milestones.

Our appointed governance and nominating committee consist of the following independent directors:

To date no meetings have been held by this committee.

McKechnie and Baxter and Dr.

During fiscal year ended August 31, 2023, the Compensation Committee held five meetings to determine bonus compensation payable to the named executive officers in connection with the successful completion of certain performance milestones.

Our appointed Governance and Nominating Committee consists of the following independent directors:

To date one formal meeting has been held by this committee.

Principal Accounting Fees and Services

The aggregate fees billed for the most recently completed fiscal year ended August 31, 2022, and for fiscal year ended August 31, 2021 for professional services rendered by the principal accountant were as follows:

August 31, 2022

August 31, 2021

The aggregate fees billed for the most recently completed fiscal year ended August 31, 2023, and for fiscal year ended August 31, 2022 for professional services rendered by the principal accountants were as follows:

Principal Accounting Fees

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Audit related fees consist of fees billed for assurance and related services by the Company’s principal accountant that are reasonably related to the performance of the audit or review of the Company’s financial statements, which are not included in the Audit Fees described above.

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

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

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

Tax fees were billed for professional services including assistance with tax compliance, preparation of tax returns, and tax consultation.

Pre-Approval Policy

Our Audit and Finance committee pre-approve all services provided by our independent auditors according to the Audit and Finance Committee’s Charter as set out in Exhibit “A” in the Company’s Schedule 14A Definitive Proxy Statement filed with the SEC on April 13, 2022.

All of the above audit services and fees were reviewed and approved by the committee.

As our independent auditors do not provide service outside of the audit function the auditors’ independence is maintained.

Exhibits, Financial Statement Schedules

a) Financial Statements

Financial statements for our Company are listed in the index under Item 8 of this document.

Report of Independent Registered Public Accounting Firm (PCAOB ID 206 )

Financial statements for our Company are listed under Item 8 of this document.

All financial statement schedules are omitted because they are not applicable, not material or the required information is shown in the financial statements or notes thereto.

Exhibit Number

Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession

Plan of Conversion (included as Schedule “A” to the proxy statement/prospectus)

Articles of Incorporation and Bylaws

Articles of Incorporation

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

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

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

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

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

Amendment to Articles of Incorporation –Share Forward Split (Filed on Form 8-K December 16th, 2015 Exh 3.1)

Amendment to Articles of Incorporation – Name Change (Filed on Form 8-K May 11th, 2016 Exh 99.1)

Instruments Defining the Rights of Security Holders, including Indentures

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

Form of Warrant (Incorporated by reference to Exhibit 4.5 to the Registration Statement on Form S-1 filed with the SEC on April 28, 2023)

Material Contracts

5 unchanged sentences

(Chris Bunka) (filed on Form 10-Q January 14, 2022 Exh 10.2)

Media Buys Agreement with SRAX (incorporated by reference as Exhibit 10.1 to our Current Report on Form 8-K filed December 16, 2021)

Redacted Intellectual Property License Agreement dated May 20, 2022 between Lexaria Hemp Corp.

1 unchanged sentence

(filed on Form 10-Q July 14, 2022 Exh 10.3)

Underwriting Agreement with H.C.

Wainwright & Co.

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

Asset Purchase Agreement with Hill Street Beverage Company Inc.

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

Equity Distribution Agreement with Maxim Group LLC (incorporated by reference as Exhibit 1.1 to our Current Report on Form 8-K filed August 12, 2022)

Form of Securities Purchase Agreement (Incorporated by reference to Exhibit 10.8 to the Registration Statement on Form S-1 filed with the SEC on April 28, 2023)

Placement Agency Agreement (filed on Form 8-K May 10, 2023 Exh.

Form of Warrant Agency Agreement (Incorporated by reference to Exhibit 10.9 to the Registration Statement on Form S-1 filed with the SEC on April 28, 2023)

Redacted Work Order for Start-Up Activities with InClin, Inc.

(filed on Form 10-Q July 14, 2023 Exh.

List of Subsidiaries of the Registrant (Filed on Form 10-K November 29, 2021 Exh 21.1)

Consents of Experts and Counsel

Consent of MaloneBailey LLP, Chartered Professional Accountants

Consent of Davidson & Company LLP, Chartered Professional Accountants

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XBRL Taxonomy Extension Presentation Linkbase Document

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

** Furnished herewith.

2 unchanged sentences

LEXARIA BIOSCIENCE CORP.

/s/ Christopher Bunka

Christopher Bunka

Chief Executive Officer, Chairman and Director

/s/ John Docherty

John Docherty

President and Director

(Principal Executive Officer)

1 unchanged sentence

In accordance with the Exchange Act, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Christopher Bunka

Christopher Bunka

Chief Executive Officer, Chairman and Director

(Principal Executive Officer)

November 25, 2022

/s/ John Docherty

1 unchanged sentence

President and Director

(Principal Executive Officer)

November 20, 2023

/s/ Gregory Downey

Gregory Downey CPA, CMA

Chief Financial Officer

/s/ Christopher Bunka

Christopher Bunka

Chief Executive Officer, Chairman and Director

(Principal Financial Officer)

9 unchanged sentences

November 20, 2023

/s/Catherine C.

November 20, 2023

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

What changed 10-K

Item 9A. Controls and Procedures