What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-04-14 compared with 2025-01-10 · 104 added, 72 removed, 392 unchanged (31% of the section changed)

25 unchanged sentences

Common shares issued and outstanding:

17,452,594 and 15,810,205 at November 30, 2024, and August 31, 2024, respectively

17,559,179 and 17,449,179 , respectively, at February 28, 2025, and 15,810,205 at August 31, 2024

Additional paid-in capital

11 unchanged sentences

(Expressed in US Dollars except share amounts)

Three Months Ended November 30,

Three Months Ended

Six Months Ended

Cost of goods sold

6 unchanged sentences

( 5,441,719 )

( 1,807,147 )

Other income (loss)

Interest income

Unrealized loss on marketable securities

Interest income (expense)

Unrealized gain (loss) on marketable securities

Total other income (loss)

1 unchanged sentence

$ ( 652,733 )

$ ( 5,423,600 )

$ ( 1,837,771 )

Net loss attributable to non-controlling interest

2 unchanged sentences

$ ( 649,539 )

$ ( 5,416,911 )

$ ( 1,828,862 )

Other comprehensive income

3 unchanged sentences

$ ( 674,537 )

$ ( 5,515,341 )

$ ( 1,849,488 )

Basic and diluted loss per share

1 unchanged sentence

- Basic and diluted

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

The accompanying notes are an integral part of these interim consolidated financial statements.

LEXARIA BIOSCIENCE CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

For the Three Months Ended November 30, 2024 and 2023

For the Six Months Ended February 28, 2025 and February 29, 2024

(Expressed in US Dollars)

Non-controlling

Stockholders'

Balance August 31, 2024

10 unchanged sentences

$ ( 380,278 )

Stock issued in equity offering

Foreign currency translation adjustment

Stock-based compensation

( 2,713,212 )

Non-controlling interest

Balance February 28, 2025

$ ( 56,975,683 )

$ ( 118,246 )

$ ( 384,038 )

Balance August 31, 2023

11 unchanged sentences

$ ( 369,755 )

Stock issued in equity offering

Stock issued from exercise of warrants

Foreign currency translation adjustment

Non-controlling interest

Balance February 28, 2024

$ ( 47,592,289 )

$ ( 372,949 )

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended February 28, 2025 and February 29, 2024

(Expressed in US Dollars)

Three Months Ended November 30,

Cash flows used in operating activities

1 unchanged sentence

$ ( 1,837,771 )

Adjustments to reconcile net loss to

net cash used in operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Stock based compensation

Depreciation and amortization

Impairment loss

Noncash lease expense

Unrealized loss on marketable securities

Unrealized (gain) loss on marketable securities

Lease accretion

4 unchanged sentences

Accounts payable and accrued liabilities

Lease payments

Operating lease liability

Deferred revenue

6 unchanged sentences

Net cash used in investing activities

Cash flows from/(used in) financing activities

Cash flows provided by (used in) financing activities

Proceeds from shares sold for cash

Proceeds from exercise of warrants

Net cash from financing activities

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash

2 unchanged sentences

Cash at end of period

Supplemental information of cash flows:

Income taxes paid in cash

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

1 unchanged sentence

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

November 30, 2024

February 28, 2025

(Expressed in U.S.

Dollars Except Share Amounts)

Nature of Business

5 unchanged sentences

We also perform contract services in R&D for customer specific formulations that are used in comparison testing to customers’ existing products.

Going Concern

The Company’s consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with accounting principles generally accepted in the United States (“US GAAP”) applicable to a going concern, which assumes the Company will have sufficient funds to meet its financial obligations for a period of at least 12 months from the date of this report.

Since inception, the Company has incurred significant operating and net losses.

Net losses attributable to shareholders were $ 2.7 million and $ 1.2 million for the three-months ended November 30, 2024, and 2023, respectively.

As of November 30, 2024, we had an accumulated deficit of $ 54.3 million.

Net losses attributable to shareholders were $ 5.4 million and $ 1.8 million for the six months ended February 28, 2025, and February 29, 2024, respectively.

As of February 28, 2025, we had an accumulated deficit of $ 57.0 million.

We expect to continue to incur significant operational expenses and net losses in the upcoming 12 months.

Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the stage and complexity of our research and development (R&D) studies and corporate expenditures, additional revenues received from the licensing of our technology, if any, and the receipt of payments under any current or future collaborations into which we may enter.

During the three months ended November 30, 2024, we raised $ 4.3 million in net proceeds from the sale of securities pursuant to our registered direct and At the Market offerings which closed in October, 2024.

The recurring losses and negative net cash flows raise substantial doubt as to the Company’s ability to continue as a going concern.

During the six months ended February 28, 2025, we raised $ 4.4 million in net proceeds from the sale of securities pursuant to our Registered Direct Offering which closed in October, 2024 as well as At the Market (ATM) offerings.

We may offer securities in response to market conditions or other circumstances if we believe such a plan of financing is required to advance the Company’s business plans.

5 unchanged sentences

If we do so, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.

Based on existing cash resources, management believes that current funding will be sufficient to meet the Company’s financial obligations for a period of at least twelve months from the date of this report.

Given our current development plans and cash management efforts, we anticipate that our cash resources will be sufficient to fund operations through the fourth quarter of calendar year 2025.

Our ability to continue operations after our current cash resources are exhausted is dependent on our ability to obtain additional debt or equity financing or a strategic partnership, which cannot be guaranteed.

Cash requirements may vary materially from those now planned because of changes in our focus and direction of our research and development programs, competitive and technical advances, patent developments, regulatory changes or other developments.

If adequate additional funds are not available when required, management may need to curtail its development efforts and planned operations to conserve cash.

As of February 28, 2025, the Company had cash and cash equivalents of approximately $ 6.5 million to settle $ 1.8 million in current liabilities.

We have performed a review of our cash flow forecast and have concluded that our existing cash, combined with inflows expected from executed license agreements, will not be sufficient to meet the Company's financial obligations for the twelve-month period following the issuance of these consolidated financial statements.

Accordingly, there is substantial doubt as to our ability to continue as a going concern within one year from the date of issuance of these financial statements.

The accompanying financial statements do not include any adjustments that might be necessary if the Company is not able to continue as a going concern.

Significant Accounting Policies

12 unchanged sentences

Cash and cash equivalents include cash-on-hand and demand deposits with financial institutions and other short-term investments with maturities of less than three months when acquired and readily convertible to known cash amounts.

The Company had no cash equivalents as of November 30, 2024, or August 31, 2024.

The Company had no cash equivalents as of February 28, 2025, or August 31, 2024.

Marketable Securities

40 unchanged sentences

The Company recognizes usage fees in the period when our licensees recognize sales of end-products that incorporate our licensed technology.

No sales-based usage fees were recognized for the three months ended November 30, 2024 and 2023.

No sales-based usage fees were recognized for the six months ended February 28, 2025 and February 29, 2024.

Third Party Contracted Manufacturing

45 unchanged sentences

Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk as the impact of rate changes for USD/CAD dollars is not expected to be material.

The following table provides a summary of financial instruments that are measured at fair value on a recurring basis as of November 30, 2024.

The following table provides a summary of financial instruments that are measured at fair value on a recurring basis as of February 28, 2025.

Fair Value Measurement Using

7 unchanged sentences

The Company has not experienced losses on these accounts and management believes, based upon the quality of the financial institution, that the credit risk with regard to these deposits is not significant.

In the three-months ended November 30, 2024, two customers accounted for 100 % of consolidated revenues.

In the three-months ended November 30, 2023, two customers accounted for 96 % of consolidated revenues.

As of November 30, 2024, the Company had $ 89,491 in sales tax receivable, as compared to $ 70,477 as of August 31, 2024.

In the six months ended February 28, 2025, two customers accounted for 100 % of consolidated revenues.

In the six months ended February 29, 2024, two customers accounted for 97 % of consolidated revenues.

As of February 28, 2025, the Company had $ 157,166 in sales tax receivable, as compared to $ 70,477 as of August 31, 2024.

The Company considers its credit risk to be low for such receivables.

27 unchanged sentences

Accounts and Other Receivables

Accounts receivable as of November 30, 2024 and August 31, 2024 consist of the following:

Accounts receivable as of February 28, 2025 and August 31, 2024 consist of the following:

Territory license fees

2 unchanged sentences

Prepaid Expenses and Other Current Assets

Prepaid expenses consist of the following as of November 30, 2024 and August 31, 2024:

Prepaid expenses consist of the following as of February 28, 2025 and August 31, 2024:

Advertising & Conferences

10 unchanged sentences

The Company evaluated its patent portfolio to determine whether certain pending applications had been abandoned or will not be pursued.

During the three-months ended November 30, 2024, the Company did not recognize an impairment loss related to those applications.

The Company recognized $ 24,462 of amortization expense related to patents and licenses in the three months ended November 30, 2024 as compared to $ 8,274 for the three months ended November 30, 2023.

The following table summarizes expected future amortization of the Company’s patent portfolio as of November 30, 2024:

Years Ending December 31,

During the six months ended February 28, 2025, the Company recognized an impairment loss of $ 33,540 related to those abandoned applications.

The Company recognized $ 18,008 of amortization expense related to patents and licenses in the six months ended February 28, 2025.

The following table summarizes expected future amortization of the Company’s patent portfolio as of February 28, 2025:

Fiscal Years Ending August 31,

Property & Equipment, net

Property and equipment, net consists of:

November 30, 2024

February 28, 2025

Period Amortization

13 unchanged sentences

$ ( 517,616 )

Depreciation and amortization for the three months ended November 30, 2024 and the year ended August 31, 2024 totaled $ 8,734 and $ 42,448 , respectively, of which $ 0 and $ 0 was included in cost of goods sold, respectively.

Depreciation and amortization for the six months ended February 28, 2025 and the year ended August 31, 2024 totaled $ 17,465 and $ 42,448 , respectively, of which $ 0 and $ 0 was included in cost of goods sold, respectively.

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities as of November 30, 2024 and August 31, 2024 consist of the following:

Accounts payable and accrued liabilities as of February 28, 2025 and August 31, 2024 consist of the following:

February 28 ,

Accounts Payable

4 unchanged sentences

Balance Ending

A breakdown of our revenues by type for the three-months ended November 30, 2024, and November 30, 2023, are as follows:

Three-Months Ended November 30

During the three-month period ended November 30, 2024, and 2023, the Company recognized B2B product revenues of $ 9,923 and $ 5,388 , respectively, that relate to sales of our intermediate products for use by B2B customers in their products.

A breakdown of our revenues by type for the six months ended February 28, 2025, and February 29, 2024, are as follows:

Six Months Ended February

During the six-month period ended February 28, 2025, and February 29, 2024, the Company recognized B2B product revenues of $ 9,923 and $ 5,388 , respectively, that relate to sales of our intermediate products for use by B2B customers in their products.

Licensing revenue consists of IP licensing fees for transfer of the DehydraTECH technology in line with definitive agreements and includes non-refundable minimum performance fees.

The Company recognized $ 174,000 and $ 144,990 in licensing revenue in the three-months ended November 30, 2024, and 2023, respectively.

For the three-months ended November 30, 2024, the Company did not recognize a provision or benefit for income taxes as it has incurred net losses.

The Company recognized $ 348,000 and $ 289,990 in licensing revenue for the six months ended February 28, 2025, and February 29, 2024, respectively.

For the six months ended February 28, 2025, the Company did not recognize a provision or benefit for income taxes as it has incurred net losses.

In addition, the net deferred tax assets are fully offset by a valuation allowance as the Company believes it is more likely than not that the benefit will not be realized.

Issuances of Common Shares and Warrants

During the three-months ended November 30, 2024, the Company completed the following issuances of common shares and warrants:

During the six months ended February 28, 2025, the Company completed the following issuances of common shares and warrants:

In February 2025, the Company sold 6,585 shares of common stock through an At the Market (ATM) offering for net proceeds of $ 11,720 .

Share issuance costs related to the ATM offering of $ 94,000 have been deferred pending termination of the offering.

On January 7, 2025 the Company issued 100,000 Restricted Stock Awards (“RSA’s”) with a fair value of $ 224,000 and having a vesting period of six months to its Strategic Executive Consultant.

On October 16, 2024, the Company entered into a Securities Purchase Agreement whereby we issued 1,633,987 shares of common stock at a purchase price of $ 3.06 per share for gross and net proceeds of $ 5.0 million and $ 4.5 million, respectively.

Concurrently, the Company issued, by way of a private placement transaction, 4,551,019 share purchase warrants, entitling the holder thereof to purchase up to 4,551,019 shares of common stock at a price of $3.06 per share for a period of five years from the date of shareholder approval for such warrant issuance.

Concurrently, the Company issued, by way of a private placement transaction, 4,551,019 share purchase warrants, entitling the holder thereof to purchase up to 4,551,019 shares of common stock at a price of $ 3.06 per share for a period of five years from January 14, 2025, the date of shareholder approval for such warrant issuance.

The shares registered pursuant to a take down of the Company’s Form S-3 registration statement and the warrants and related warrant shares were registered pursuant to a Form S-3 registration statement As part of the terms and conditions of the warrant issuance, the sole investor agreed to cancel the 2,917,032 share purchase warrants bearing an exercise price of $ 4.75 that were issued to them in the April 30, 2024 financing.

2 unchanged sentences

Share issuance costs related to the ATM offering of $ 144,812 were charged to additional paid in capital.

A continuity schedule for warrants for the three-months ended November 30, 2024, is presented below:

A continuity schedule for warrants for the six months ended February 28, 2025, is presented below:

Balance, August 31, 2024

1 unchanged sentence

( 2,977,830 )

Balance, November 31, 2024

A summary of warrants outstanding as of November 30, 2024, is presented below:

Balance, February 28, 2025

A summary of warrants outstanding as of February 28, 2025, is presented below:

Number of Warrants

Weighted Average Exercise Price ($)

Weighted Average Remaining Contractual Life ~in years~

The share purchase and placement agent warrants issued on October 16, 2024 are exercisable on or after the related stockholder approval date.

Because they were not exercisable as of November 30, 2024, they are excluded from the continuity table and summary of warrants outstanding above.

Weighted Average Remaining

Contractual Life ~in years~

Stock Options

The Company established an Equity Incentive Plan whereby our Board, pursuant to shareholder approved amendments, may grant up to 1,745,259 stock options to directors, officers, employees, and consultants with such number being increased to up to 10% of the issued share capital at the end of each calendar year, at the discretion of the board, pursuant to an evergreen formula .

The Company established an Equity Incentive Plan whereby our Board, pursuant to shareholder approved amendments, may grant up to 1,745,259 stock options, restricted stock awards or restricted stock units to directors, officers, employees, and consultants with such number being increased to up to 10% of the issued share capital at the end of each calendar year, at the discretion of the board, pursuant to an evergreen formula .

Stock options currently granted must be exercised within five years from the date of grant or such lesser period as determined by the Company’s board of directors.

7 unchanged sentences

Cancelled/expired

Balance November 30, 2024 (outstanding)

Balance November 30, 2024 (exercisable)

On October 1, 2024, the Company granted 62,000 options to its employees with an exercise price of $ 3.17 and a term of 5 years.

The options granted vest as follows:

4,000 at grant date, 20,000 on February 28, 2025, and 38,000 over a period of two years .

On November 27, 2024, the Company granted 20,000 fully vested options to its Scientific Advisory Board members with an exercise price of $ 2.10 and a term of 5 years.

The fair value of stock options granted in the three-months ended November 30, 2024, were estimated as of the date of the grant by using the Black-Scholes option pricing model with the following assumptions:

November 30, 2024

Balance February 28, 2025 (outstanding)

Balance February 28, 2025 (exercisable)

On October 1, 2024, the Company granted a total of 62,000 options to two employees with an exercise price of $ 3.17 and a term of 5 years.

On November 27, 2024, the Company granted a total of 20,000 options to two Scientific Advisory Board members with an exercise price of $ 2.10 and a term of five years.

On December 9, 2024, the Company granted 10,000 options to a Scientific Advisory Board member with an exercise price of $ 2.42 and a term of 5 years.

On January 13, 2025, the Company granted an aggregate of 50,000 options to a Scientific Advisory Board member and a consultant with an exercise price of $ 2.07 and a term of 5 years.

The fair value of stock options granted in the six months ended February 28, 2025, were estimated as of the date of the grant by using the Black-Scholes option pricing model with the following assumptions:

February 28, 2025

Expected volatility

3 unchanged sentences

Estimated fair value per option

Stock-based compensation expense for the three-month periods ended November 30, 2024, and 2023, was $ 99,415 and $ 53,953 , respectively.

As of November 30, 2024, the total unrecognized non-cash compensation costs are $ 627,783 related to 265,000 non-vested stock options with a $ 3.74 weighted average exercise price.

$ 1.21 -$ 1.72

Stock-based compensation expense for the six-month periods ended February 28, 2025, and February 29, 2024, was $ 266,634 and $ 53,953 , respectively.

As of February 28, 2025, the total unrecognized non-cash compensation costs are $ 678,493 related to 232,000 non-vested stock options with a $ 3.47 weighted average exercise price and the restricted stock award issued on January 7, 2025.

These costs are expected to be recognized over a weighted average period of 1.77 years.

4 unchanged sentences

In addition to minimum lease payments, the lease requires us to pay property taxes and other operating costs which are subject to annual adjustments.

November 30, 2024

August 31, 2024

Right of use assets - operating leases

7 unchanged sentences

Discount rate

Pursuant to the terms of the Company’s lease agreements in effect, the following table summarizes the Company’s maturities of operating lease liabilities as of November 30, 2024:

Pursuant to the terms of the Company’s lease agreements in effect, the following table summarizes the Company’s maturities of operating lease liabilities as of February 28, 2025:

2025 (six months remaining)

Total lease payments

7 unchanged sentences

Intellectual Property, B2B Production, Research and Development and Corporate.

Licensing revenues are significantly concentrated on three licensees.

Three Months Ended November 30, 2024

Consolidated Total

Licensing revenues are significantly concentrated on two licensees.

Six Months Ended February 28, 2025

Cost of goods sold

2 unchanged sentences

( 2,156,257 )

( 5,796,922 )

Other Income(Expense)

3 unchanged sentences

$ ( 5,423,600 )

Three Months Ended November 30, 2023

Consolidated Total

Six Months Ended February 29, 2024

Cost of goods sold

1 unchanged sentence

( 1,400,223 )

( 2,222,192 )

Other Income(Expense)

3 unchanged sentences

$ ( 1,961,360 )

Subsequent Events

Effective December 9, 2024, the Company issued 10,000 fully vested options with an exercise price of $ 2.42 to a Scientific Advisory Board member.

Effective January 7, 2025, the Company issued 100,000 fully vested Restricted Stock Awards (“RSAs”) with a fair value of $224,000 and having a six (6) month Restricted Period, as that term is defined in the Company’s incentive equity plan, to Christopher Bunka .

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

What changed 10-Q

Item 1. Financial Statements