What changed in this filing

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Item 9A. Controls and Procedures

2024-11-26 compared with 2023-11-20 · 236 added, 97 removed, 338 unchanged (50% of the section changed)

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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 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.

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

As of August 31, 2024, 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, it was 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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The fundamental controls and control processes remained consistent with prior years during the year ended August 31, 2024.

In April 2021, the former CFO, Mr.

Allan Spissinger, was replaced by the former controller, Mr.

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

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.

While the Company has experienced turnover with its CFO position during the past two fiscal years, these changes have not resulted in any changes in our internal controls over financial reporting that occurred during the year ended August 31, 2024, that have materially or are reasonably likely to materially affect our internal controls over financial reporting.

Other Information

Rule 10b5-1 Trading Arrangement

During the three months ended August 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Directors, Executive Officers and Corporate Governance

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Christopher Bunka

Chairman, Chief Executive Officer, and Director

Chairman , and Director

Richard Christopher

Chief Executive Officer

John Docherty

President and

Gregory Downey

Michael Shankman

Chief Financial Officer

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

Christopher Bunka – Chairman, Chief Executive Officer and Director

Bunka has been Chairman of the Board and CEO since 2006 and was primarily responsible for the corporate pivot from older business activities to bioscience.

Christopher Bunka – Chairman, former Chief Executive Officer and Director

Bunka has been Chairman of the Board since 2006.

He is a former executive of the Company, having served as chief executive officer from 2006 to August 31, 2024.

Bunka was primarily responsible for the corporate pivot from older business activities to bioscience and specifically to the Company’s current research and development of DehydraTECH with GLP-1 and GIP drugs.

Bunka is a serial entrepreneur and has been involved in several private and public companies since the late 1980’s.

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He is a venture capitalist and corporate consultant.

Richard Christopher – Chief Executive Officer

Christopher joined the Company as Chief Executive Officer on August 31, 2024.

He has extensive experience with pharmaceutical and medical device companies.

He was the Chief Financial Officer of Invivo Therapeutics Holdings Corp.

(“InVivo”) from 2019 to 2024.

InVivo Therapeutics was a pioneering biomaterials and biotechnology company with a focus on the treatment of spinal cord injuries.

Its goal was to develop and commercialize groundbreaking technologies and treatments for spinal cord injury (SCI).

At the core of InVivo’s technology portfolio was the Neuro-Spinal Scaffold™ a novel and proprietary biomaterial that is implanted into the epicenter of the injury to modulate the healing environment and serve as a support for neuroregeneration.

As the Neuro-Spinal Scaffold failed to advance through clinical trials, InVivo delisted from the Nasdaq Stock Market around March 20, 2024.

Christopher was the Chief Financial Officer of iCAD, Inc.

from December 2016 through January 2019.

is a Nasdaq-listed company with a focus on therapies and solutions for the early identification and treatment of cancer, where he held both financial and operational responsibilities.

Prior to iCAD, Inc., Mr.

Christopher was Chief Financial Officer from March 2014 through December 2016 and Chief Operating Officer from October 2015 through December 2016 of Caliber Imaging & Diagnostics, Inc., a medical technology company focused on cancer detection imaging solutions, with primary applications in dermatology.

Prior to Caliber and starting in 2000, Mr.

Christopher held various positions of increasing responsibility at DUSA Pharmaceuticals, Inc., a Nasdaq-listed dermatology company focused on the treatment of precancerous skin lesions, where he ultimately served as Chief Financial Officer from January 2005 through its acquisition and integration into Sun Pharmaceuticals Industries Ltd in April 2013.

Christopher holds a Master of Science in Accounting from Suffolk University and a Bachelor of Science in Finance from Bentley University.

John Docherty – President and Director

Docherty was appointed President of Lexaria effective April 15, 2015.

Docherty has served as the Company’s President of Lexaria since April 15, 2015 and a director since April 29, 2016.

Prior to Lexaria Mr.

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

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.

Michael Shankman –Chief Financial Officer

Shankman joined the Company as Chief Financial Officer on October 1, 2024.

Shankman was previously engaged by the Company as an outsourced CFO via NowCFO from June 2023 to February 2024.

He is a Certified Public Accountant holding an MBA, Finance from California State University who previously worked with NOW CFO from 2021 to 2024.

During his time with NOW CFO, Mr.

Shankman provided outsourced CFO and Controller services gaining extensive experience and familiarity with both public and private companies in a wide variety of industry fields.

Prior to his engagement with NOW CFO, Mr.

Shankman worked for The Arcticom Group, being a $160M provider of refrigeration and HVAC design, installation, maintenance and repair services to national grocery chains, as its Corporate Controller from 2020-2021.

And from 2019 to 2020 Mr.

Shankman was the Controller for Change.Org a $35M public benefit corporation.

Nicholas Baxter - Director

Baxter was appointed as a member of the board of directors of Lexaria Corp.

Baxter has served as a member of the Company’s board of directors since 2009.

Baxter received a Bachelor of Science (Honours) from the University of Liverpool in 1975 and has worked on oil & gas projects in many areas of the world.

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Ted McKechnie – Director

McKechnie is a well-recognized thought leader in the Canadian food industry.

McKechnie has served as a member of the Company’s board of directors since September 2016.

He is a well-recognized thought leader in the Canadian food industry.

In the past, Mr.

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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.

Reese has served as a member of the Company’s board of directors since January 2021.

He 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.

Reese was a Director and Chairman of the Audit Committee of a community bank in Texas for ten years until such time as it was acquired by a larger banking group in 2018.

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Turkel – Director

Turkel, PharmD, PhD has more than 20 years’ experience as an executive in start-up and mid-size pharma/biotech companies.

Turkel, PharmD, PhD has served as a member of the Company’s board of directors since September 2022.

She has more than 20 years’ experience as an executive in start-up and mid-size pharma/biotech companies.

She was Founder and CEO of Nezee Therapeutics, and served as President and R&D head at Novus Therapeutics (renamed Eledon Pharmaceuticals – Nasdaq:

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

Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during fiscal year ended August 31, 2023, all filing requirements applicable to our officers, directors, and beneficial owners of greater than 10% percent were complied with.

During the fiscal year ended August 31, 2024, the Form 4 filings for stock options issued to the following insiders,:

Albert Reese Jr., William Edward McKechnie, Nicholas Baxter, Dr.

Turkel, John Docherty and Christopher Bunka, on April 26, 2024 were completed after the required two day business time period.

Other than that one instance of late filing, and based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that all other filings applicable to our officers, directors, and beneficial owners of greater than 10% percent were complied with within the required time frames.

Code of Ethics

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Board and Committee Meetings

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

Our Board held ten formal meetings and several informal meetings during the year ended August 31, 2024.

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

Reese’s appointment in January 2021, Mr.

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

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

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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.

The Compensation Committee held six 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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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.

The Governance and Nominating Committee held four 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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Our Board and Governance and Nominating Committee evaluate each individual in the context of the board as a whole, with the objective of assembling a group that can best perpetuate the success of the business and represent stockholder interests through the exercise of sound judgment using its diversity of experience in these various areas.

Insider Trading Arrangements and Policies

The Company has adopted an insider trading policy governing the purchase, sale, and/or other disposition of its securities by its directors, officers, employees and independent contractors that the Company believes is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the exchange listing standards applicable to the Company.

Directors, executive officers, employees and other related persons may not buy, sell or engage in other transactions in the Company’s shares while aware of material non-public information;

buy or sell securities of other companies while aware of material non-public information about those companies that they became aware of as a result of business dealings between the Company and those companies;

or disclose material non-public information to any unauthorized persons outside of the Company.

The policy also restricts trading and other transactions for a limited group of Company employees (including executives and directors) to defined window periods that follow the Company's quarterly earnings releases and restricts trading and other transactions following announcement of a share repurchase program.

Executive Compensation

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our principal executive officer;

each of our two most highly compensated executive officers who were serving as executive officers at the end of the years ended August 31, 2023, and August 31, 2022, and;

each of our two most highly compensated executive officers who were serving as executive officers during the last completed year ended August 31, 2024 and August 31, 2023;

up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the years ended August 31, 2024, and August 31, 2023,

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SUMMARY COMPENSATION TABLE

Name and Principal Position

Option Awards (6)

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All Other Compensation

Principal Position

Christopher Bunka (1)

Chairman, Chief Executive Officer & Director

Chairman, Director & former Chief Executive Officer

Richard Christopher (2)

Chief Executive Officer

John Docherty (3)

President & Director

Greg Downey (3)

Nelson Cabatuan (4)

Former Chief Financial Officer

Allan Spissinger (4)

Greg Downey (5)

Former Chief Financial Officer

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

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

Bunka a consulting fee through CAB Financial Services Ltd., through which he was previously compensated for Chief Executive Officer services.

On August 31, 2024, Mr.

Bunka resigned as Chief Executive Officer of the Company and currently serves as the Company’s Chairman of the Board.

Richard Christopher was appointed as Chief Executive Officer on August 31, 2024.

Christopher was paid $5,000 for consulting for the month of July 2024.

Christopher as an employee.

Docherty became President on April 15, 2015, and a director on April 29, 2016.

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

Docherty as an employee.

Cabatuan was Chief Financial Officer from March 14, 2024 to July 15, 2024 and was considered an employee of the Company.

Subsequent to his resignation 150,000 options were cancelled with a value of $302,474.

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.

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

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

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

Chris Bunka, CEO

Chris Bunka, Former CEO

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

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Bunka to compensation of 2% of the consideration of the total value of any subsidiary sold and upon a change of control is entitled to 26 times the monthly fee, excluding certain circumstances.

The termination clause requires 15 months written notice plus one addition months’ written notice for each completed year of service for terminating the contract without cause.

The termination clause requires 15 months written notice plus one additional months’ written notice for each completed year of service for terminating the contract without cause.

Payment may be made in lieu of and if so, the Company would be liable for a termination payment of 15 times the monthly fee plus one additional month’s payment for each completed year of service of up to a maximum payment of 24 times the monthly fee.

On August 31, 2024 the management contract with Mr.

Bunka was terminated by the Company in order to proceed with the engagement of the new CEO, Mr.

Richard Christopher.

Pursuant to the terms of his contract and a review conducted by the Compensation Committee, Mr.

Bunka received a severance payment of US$442,167, and upon completion of the calendar year will also receive his pro rata portion of his performance milestone bonus.

Bunka and the Company have agreed to enter into a consulting agreement whereby Mr.

Bunka will provide Strategic Executive Advising services and accordingly, all stock options previously issued to Mr.

Bunka will remain valid and exercisable.

Bunka will continue as a director of the Company and as the Chairman of the board and will be compensated for his services as such in the same manner as the independent board members.

Richard Christopher, CEO

The Company entered into an at-will executive employment agreement with Mr.

Richard Christopher for the provision of Chief Executive Officer services for US$420,000 per year, effective August 31, 2024, with an annual increase of 5% on January 1, 2025 and January 1, 2026 and thereafter at the sole discretion of the Company and in accordance with the Company’s standard payroll practices.

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

Participation in the Company’s stock option plan is also included with an initial option issuance for the purchase of 200,000 common shares with an exercise price of $3.92, being granted for a five year term with vesting periods ending in December 2026.

An annual professional development allowance of US$40,000 is also available to Mr.

Upon the occurrence of a change of control (“COC”), Mr.

Christopher will be entitled to a lump payment of 12 months’ pay if such COC occurs within the first year of engagement, 13 months’ pay if such COC occurs within the second year of engagement and 14 months’ pay if such COC occurs within the third or subsequent year of engagement.

The agreement specifies that should Mr.

Christopher’s engagement be terminated without just cause by the Company or for good reason by Mr.

Christopher, the Company would pay Mr.

Christopher any accrued wages, payable bonus and one month of salary for each one month engaged up to a maximum of 12 months’ pay.

John Docherty, President

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Docherty and termination without cause by the Company would result in 12 months’ pay in lieu of notice plus one additional month’s written notice or payment in lieu, for each completed year of service up to a maximum payment of 24 months.

Greg Downey, CFO

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

Downey with annual compensation of C$144,000 with a 10% annual increase.

A performance bonus equal to 50% of the annual compensation may be payable upon the completion of certain performance criteria.

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

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.

Nelson Cabatuan, Former CFO

The Company entered into an employment agreement with Mr.

Cabatuan with a base annual salary of US$198,000, subject to annual increases of US$12,000 for the first and second anniversary of employment with any subsequent increase being subject to negotiation, an option grant for the issuance of up to 200,000 common shares vested over three years, and annual performance milestone bonuses of up to 35% during the first year, 40% during the second year and thereafter up to 50% of the base salary.

In addition, Mr.

Cabatuan’s employment agreement provides that upon the sale of an affiliate company, he will receive compensation on the gross sale value equal to 0.5% if the sale occurs in the first year of employment, 0.75% if the sale occurs in the second year of employment and 1.0% if the sale occurs thereafter.

As well, upon a change of control of Lexaria Bioscience Corp., Mr.

Cabatuan will be entitled to twelve months’ of base salary if it occurs in the first year, thirteen months’ of base salary if it occurs in the second year and fourteen months’ of base salary if it occurs in the third year or any subsequent year thereafter.

Cabatuan resigned from his position, his unvested options (150,000) were returned to the Company’s Equity Incentive Plan and he was only entitled to accrued wages.

Cabatuan has continued with the Company as its Strategic Investment Advisor his vested options (50,000) remain valid and active.

Michael Shankman, Current CFO

The Company entered into an employment agreement with Mr.

Shankman with a base annual salary of US$120,000, subject to annual increases of 1.25 x the annual inflation rate as determined by the US Federal Reserve Board, an option grant for the issuance of up to 50,000 common shares subject to vesting provisions ending August 31, 2026, and annual performance milestone bonuses of up to 35% during the first year, 40% during the second year and thereafter up to 50% of the base salary.

Shankman be terminated without cause, after an initial six months with the Company, he will be entitled to severance pay equal to two (2) months base salary, with such severance pay increasing by a month for each completed year of employment.

Shankman will also be entitled to medical and dental benefits equal in value to up to $2,000 per month until his 65 th birthday and four (4) weeks of paid vacation.

Grants of Plan-Based Awards Table

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

During the year ended August 31, 2024, Lexaria issued the following plan-based awards to our named executive officers:

Compensation Securities

securities, and

percentage of

Stock Options

John Docherty,

Stock Options

Nelson Cabatuan,

Stock Options

Upon resignation, 150,000 vested options with a fair value of $302,474 expired and were returned to the Incentive Equity Plan.

The remaining 50,000 options had their term reduced so that they expire on July 15, 2026, being two years from the date that Mr.

Cabatuan resigned as CFO and commenced consulting services.

Outstanding Equity Awards at Fiscal Year End

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John Docherty

Greg Downey (1)

(1) The options held by Mr.

Downey expired on September 6, 2023.

Richard Christopher

Option Exercises

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Compensation of Directors

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

As of the fiscal year ending August 31, 2024, 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.

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.

The four independent directors were granted an aggregate of 68,000 stock options with a calculated fair value of $119,311 and is included in consulting expense during the fiscal year 2024.

In establishing the compensation of the directors, the Company engaged a third party consultant to conduct a peer company review of the compensation issued to companies of similar size, industry and stage of development.

Upon completion of the review, it was determined that the current options issued to the independent directors was below the industry standard and accordingly, an allotment of 12,000 options was issued to each independent director to rectify this gap.

Pension, Retirement or Similar Benefit Plans

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

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

Lexaria’s Governance and Nominating Committee has been compiling a board skill gap matrix and developing a board succession plan for the purpose of formalizing the preferred board composition and areas of expertise that would provide additional benefits to the Company and its shareholders.

During fiscal 2023, the board appointed Dr.

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Based on the reviews and discussions our Compensation Committee recommended to our Board that the Executive Compensation discussed above be included in this annual report on Form 10-K.

Actions to Recover Erroneously Awarded Compensation

At no time during the last fiscal year was the Company required to prepare an accounting restatement that required recovery of an erroneously awarded compensation pursuant to our Clawback Policy as attached as Exhibit 97.1 to this Form 10-K.

Policies and Practices related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information (“MNPI”)

The Company has a strict policy of not issuing options or allowing its insiders to conduct stock trades at times, subject to any allowable trades that might occur pursuant to a 10b5-1 Trading Plan, where MNPI is known or a material transaction is anticipated to occur.

Each insider and employee of the Company is required to read and sign the Company’s Insider Trading and Black Out Period Policy as attached hereto as Exhibit 19.1, which prescribes certain set periods that prohibit insider trading.

Other than as established for black-out periods associated with our quarterly and annual financial statement filings, our executive management will also issue notices of black-out trading periods if they are aware of material transactions which they anticipate closing.

Despite diligent efforts to prevent such grant of equity awards close in time to the release of MNPI, there are times when a material transaction may unexpectedly close with a faster timeline than expected which may result in an inadvertent issuance of stock options near or close to the disclosure of MNPI.

During the fiscal year ended August 31, 2024, the Company proceeded with its annual issuance on April 26, 2024 of 5,000 stock options to each of its independent directors as required pursuant to the director services agreement and certain additional stock option issuances to its employees and executive officers.

Two business days later, on April 30, 2024 an existing investor agreed to the terms of a warrant exercise agreement as announced via Form 8-K on April 30, 2024.

The named executive officers who received a grant pursuant to this close in time issuance are as follows:

Exercise price

Fair Value on Grant Date

% change of Market Price

John Docherty

None of the options that were inadvertently issued close in time to the MNPI have been exercised and from the time of disclosure of the MNPI to the fiscal year end, the Company’s stock has seen a low of $2.58 and a high of $4.09.

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

The following table sets forth certain information with respect to the beneficial ownership of our common shares by each shareholder known by us to be the beneficial owner of more than 5% of our common shares, as well as by each of our directors and executive officers as a group, as of August 31, 2023.

Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated.

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Christopher Bunka

CEO, Chairman & Director

Chairman & Director

John Docherty

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Independent Director

Richard Christopher

Chief Executive Officer

Michael Shankman

Chief Financial Officer

Armistice Capital, LLC

* 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.

Percentage of ownership is based on 17,970,263 common shares issued and outstanding as of November 22, 2024 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.

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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.

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, 30,000 options exercisable at $1.15, 49,500 options exercisable at $2.36 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.

and 64,668 options exercisable at $3.00 and 30,000 options exercisable at $2.91, 30,000 options exercisable at $1.15 and 49,500 options exercisable at $2.36 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, 5,000 options exercisable at $0.87, 5,000 options exercisable at $2.36 and 12,000 options exercisable at $3.39.

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, 5,000 options exercisable at $2.36 and 12,000 options exercisable at $3.39.

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, 5,000 options exercisable at $2.36 and 12,000 options exercisable at $3.39.

Includes 3,400 options exercisable at $3.04, 1,600 options exercisable at $1.96 and 5,000 options exercisable at $0.87, 5,000 options exercisable at $2.36 and 12,000 options exercisable at $3.39.

Under Rule 13d-3, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided.

The options held by Messrs.

Christopher and Shankman are not exercisable within 60 days of the date of that this information is provided.

Consists of 4,551,019 warrants which contain certain beneficial ownership limitations, which provide that a holder of the securities will not have the right to exercise any portion of its Common Warrants if such holder, together with its affiliates and attribution parties, would beneficially own in excess of 4.99% or 9.99%.

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:

5 unchanged sentences

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, 2024.

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

As of November 25, 2024, there were 17,452,594 shares of our common stock issued and outstanding.

Equity Compensation Plan Information

We have no long-term incentive plans other than the equity incentive plan described below.

Equity Incentive Plan

Securities authorized for issuance under equity compensation plans

Plan Category

Number of securities to be based upon exercise of outstanding options, warrants and rights

Weighted-average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plan [excluding securities reflected in column (a)]

Equity compensation plans not approved by shareholders

Equity compensation plans approved by shareholders

All future option issuances shall be made under the Equity Incentive Plan.

Our Board may amend, suspend, or terminate this Plan or any portion thereof subject to the approval of any requisite regulatory authority.

No such amendment, suspension or termination shall alter or impair any outstanding unexercised Options or any rights without the consent of such Participant.

If this Plan is suspended or terminated, the provisions of this Plan and any administrative guidelines, rules and regulations relating to this Plan shall continue in effect for the duration of such time as any Option remains outstanding.

On May 9, 2023, the Company’s shareholders approved two proposals to amend the Equity Incentive Plan.

The approval of the first proposal authorized the Board to amend the Equity Incentive Plan by increasing the maximum number of shares issuable to 10% of the issued share capital as at May 31, 2023 and the second proposal authorized the Board to amend the Equity Incentive Plan to allow for an evergreen formula whereby on January 1 of each calendar year the number of shares issuable pursuant to the Equity Incentive Plan may be increased, at the discretion of the Board, to 10% of the issued share capital as at December 31 of the preceding year.

Convertible Securities

Pursuant to our Equity Incentive Plan, during the year ended August 31, 2024, we granted stock options to directors, officers, employees, and consultants that enable the option holders to purchase 696,500 common shares of the Company.

Options were granted at prices of:

85,000 at $1.15 (of which 2,500 were exercised), 200,000 at $2.93 (of which 150,000 were returned), 151,500 at $2.36, 60,000 at $3.39 and 200,000 at $3.92 and have exercise periods ranging from two to five year terms.

The 744,936 options that were granted and exercisable as at August 31, 2024 had a fair value of $471,086 using the Black Scholes valuation method and the non-cash expense was included in wages and salaries on the Company’s Consolidated Statements of Operations and Comprehensive Loss.

Changes in Control

1 unchanged sentence

Certain Relationships and Related Transactions, and Director Independence

No director, executive officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since the year ended August 31, 2023, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at the year end for the last three completed fiscal years.

No director, executive officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since the beginning of our fiscal year ended August 31, 2024, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at the year end for the last three completed fiscal years.

Director Independence

13 unchanged sentences

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.

During fiscal year ended August 31, 2024, the Compensation Committee held six 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

During the fiscal year ended August 31, 2024, the Governance and Nominating Committee held four formal meetings.

Principal Accountant Fees and Services

The aggregate fees billed for the most recently completed fiscal year ended August 31, 2024, and for fiscal year ended August 31, 2023 for professional services rendered by the principal accountants were as follows:

13 unchanged sentences

Articles of Incorporation and Bylaws

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 Articles of Incorporation (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed January 14, 2021)

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

Instruments Defining the Rights of Security Holders, including Indentures

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

Equity Incentive Plan (incorporated by reference to Exhibit 4.1 to our Registration Statement on Form S-8 filed on January 18, 2024)

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)

Form of Private Placement Warrant (incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed February 16, 2024)

Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.3 to our Current Report on Form 8-K filed February 16, 2024)

Form of Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed April 30, 2024)

Form of Private Placement Warrant (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed October 16, 2024)

Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed October 16, 2024)

Material Contracts

Executive Employment Agreement dated Dec.

31, 2021 with John Docherty (filed on Form 10-Q January 14, 2022 Exh 10.1)

31, 2021 with John Docherty (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on January 14, 2022)

Management Services Agreement dated Dec.

1 unchanged sentence

Financial Services Ltd.

(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.

and Premier Wellness Science Co., Ltd.

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

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)

(Chris Bunka) (incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on January 14, 2022)

Engagement Agreement by and between the Company and H.C.

Wainwright & Co., LLC, dated February 12, 2024 (incorporated by reference to Exhibit 1.1 to our Current Report on Form 8-K filed February 16, 2024)

Engagement Agreement Amendment by and between the Company and H.C.

Wainwright & Co., LLC, dated February 12, 2024 (incorporated by reference to Exhibit 1.2 to our Current Report on Form 8-K filed February 16, 2024)

Form of Securities Purchase Agreement with certain purchasers dated February 14, 2024 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed February 16, 2024)

Amended and Restated Definitive Intellectual Property License Agreement between Lexaria Hemp Corp.

and Premier Anti-aging Co., Ltd., dated March 15, 2024 (incorporated by reference to Exhibit 10.6 to our Quarterly Report on Form 10-Q filed on April 9, 2024)

Warrant Exercise Agreement between the Company and Armistice Capital Master Fund Ltd.

(incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on April 30, 2024)

Capital on Demand™ Sales Agreement, dated as of August 21, 2024 by and between Lexaria Bioscience Corp.

and JonesTrading Institutional Services LLC (incorporated by reference to Exhibit 1.1 to our Current Report on Form 8-K filed on August 22, 2024)

Executive Employment Agreement dated August 31, 2024 with Richard Christopher

Executive Employment Agreement dated October 1, 2024 with Michael Shankman

Engagement Agreement by and between the Company and H.C.

Wainwright & Co., LLC, dated September 4, 2024 (incorporated by reference to Exhibit 1.1 to our Current Report on Form 8-K filed October 16, 2024)

Form of Securities Purchase Agreement with certain purchasers dated October 14, 2024 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed October 16, 2024)

Insider Trading Policies and Procedures

Insider Trading and Black-Out Period Policy, effective June 14, 2019

List of Subsidiaries of the Registrant

Consents of Experts and Counsel

Consent of MaloneBailey LLP, Chartered Professional Accountants

Consent of Davidson & Company LLP, Chartered Professional Accountants

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

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Section 906 Certification under Sarbanes Oxley Act of 2002 of Principal Financial Officer and Principal Accounting Officer

Policy Relating to Recovery of Erroneously Awarded Compensation

Clawback Policy , effective December 1, 2023

Interactive Data Files

7 unchanged sentences

Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.

Form 10-K Summary

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

LEXARIA BIOSCIENCE CORP.

/s/ John Docherty

John Docherty

President and Director

/s/ Richard Christopher

Richard Christopher

Chief Executive Officer

(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/ John Docherty

John Docherty

President and Director

/s/ Richard Christopher

Richard Christopher

Chief Executive Officer

(Principal Executive Officer)

November 26, 2024

/s/ Christopher Bunka

Christopher Bunka

Chief Executive Officer, Chairman and Director

/s/ Michael Shankman

Michael Shankman

Chief Financial Officer

(Principal Financial Officer)

November 26, 2024

/s/ Ted McKechnie

/s/ William Edward (Ted) McKechnie

Ted McKechnie

8 unchanged sentences

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