What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-04-14 compared with 2025-01-10 · 85 added, 72 removed, 170 unchanged (48% of the section changed)

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In some cases, forward-looking statements are identified by terminology such as “may”, “will”, “should”, “could”, “targets”, “goal”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology.

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” set forth in Item 1(A) in our annual report on Form 10-K, as filed with the Securities and Exchange Commission on November 26, 2024, that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” set forth in Item 1(A) and in our annual report on Form 10-K, as filed with the Securities and Exchange Commission on November 26, 2024, that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

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Company Overview

Lexaria’s DehydraTECH patented technology is a drug delivery platform technology that provides more predictable time of delivery of Active Pharmaceutical Ingredients (“API”) into the bloodstream and brain tissue.

Lexaria’s DehydraTECH patented technology is a drug delivery platform technology that improves the way that Active Pharmaceutical Ingredients (“API”) enter the bloodstream and brain tissue.

Based on R&D studies completed in animals and humans, DehydraTECH has been shown to improve the delivery of bioactive compounds into the bloodstream, offering potential to lower overall dosing, and is highly effective in API delivery available in a range of formats from oral ingestible to oral buccal/sublingual to topical products.

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Lexaria is advancing several R&D activities in preclinical as well as on-going and planned future clinical programs.

During the three-months ended November 30, 2024, Lexaria announced results from its 12 week, 12 study-arm, GLP-1 Diabetes Animal Study (WEIGHT-A24-1) which was completed using diabetic, pre-conditioned Zucker rats.

During the six months ended February 28, 2025, Lexaria announced results from its 12 week, 12 study-arm, GLP-1 Diabetes Animal Study (WEIGHT-A24-1) which was completed using diabetic, pre-conditioned Zucker rats.

An arm relates to a subset of participants or test subjects assigned to receive a specific treatment (for example, a formulation of DehydraTECH and semaglutide).

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The Study also included a comprehensive battery of liver and kidney function testing and blood chemistry analyses that remain to be analysed and reported.

Further, during the three-months ended November 30, 2024, Lexaria completed the dosing in nine (9) healthy human volunteers to investigate DehydraTECH-enhanced tirzepatide, a dual action glucagon-like peptide-1 + glucose-dependent insulinotropic peptide receptor agonist, with no serious adverse events having been observed.

A battery of PK and pharmacodynamic outcomes remain to be analysed and reported.

Lexaria, through its wholly-owned subsidiary, Lexaria (AU) Pty Ltd.

also received Ethics Board Approval to conduct its Australian Phase 1b 12-week chronic study in 80 overweight, obese, pre- or type 2 diabetic patients to investigate the efficacy of DehydraTECH-CBD and DehydraTECH-enhanced semaglutide as compared to Rybelsus®.

During the three-months ended November 30, 2024, the Company also entered into a Securities Purchase Agreement whereby on October 16, 2024, the Company 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.

Further, during the six months ended February 28, 2025, Lexaria completed the dosing in nine (9) healthy human volunteers to investigate DehydraTECH-enhanced tirzepatide, a dual action glucagon-like peptide-1 + glucose-dependent insulinotropic peptide receptor agonist, as compared to the Zepbound® brand of injected tirzepatide.

Results indicated that DehydraTECH-tirzepatide, as compared to Zepbound®, evidenced a 47% reduction in adverse events, a comparable overall reduction in blood glucose and a comparable increase in insulin levels.

During the six months ended February 28, 2025, the Company also entered into a Securities Purchase Agreement whereby on October 16, 2024, the Company 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 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.

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

Effective December 2, 2024, the Company, via its wholly owned subsidiary, Lexaria (AU) Pty Ltd, entered into a Project Agreement with Novotech (Australia) Pty Limited for the conduct of its Australian clinical study DehydraTECH Cannabidiol alone and in combination with glucagon-like peptide 1 agonists in pre- and Type II Diabetes (GLP-1-H24-4).

Effective January 1, 2025, the Company entered into an Executive Management Contract to re-engage John Docherty as its President and to engage him as the Company’s Chief Science Officer.

The ATM was amended and renewed under the Company’s new Form S-3 Registration Statement pursuant to an amending agreement entered into on February 5, 2025.

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

In February 2025, 6,585 shares were sold for net proceeds of $11,720 under the amended ATM offering.

Lexaria via its wholly owned subsidiary, Lexaria (AU) Pty Ltd, received Ethics Board Approval and entered into a Project Agreement with Novotech (Australia) Pty Limited for the conduct of its Australian Phase 1b 12-week chronic clinical study of DehydraTECH Cannabidiol alone and in combination with glucagon-like peptide 1 agonists in pre- and Type II Diabetes (GLP-1-H24-4) and began the associated site initiation visits and initial dosing of patients.

During the six months ended February 28, 2025, it was also determined to add a 5 th study arm to GLP-1-H24-4 to investigate DehydraTECH formulated tirzepatide which has also received Ethics Board Approval.

On January 15, 2025, Lexaria received independent Ethics Board Approval to the commencement of its human pilot study GLP-1-H25-5 which will be investigating an oral version of liraglutide by way of formulating the commercial injectable liraglutide drug sold under the brand name Saxenda®, with DehydraTECH.

This Study is expected to be conducted with 8-10 healthy volunteers with the goals of demonstrating safety and pharmacokinetic performance in humans utilizing orally dosed DehydraTECH-liraglutide.

If the Study results are positive, it could support a decision to investigate oral DehydraTECH-liraglutide in a future Phase I registered trial.

Also, during the six months ended February 28, 2025, the Company entered into an Executive Management Contract to re-engage John Docherty as its President and to engage him as the Company’s Chief Science Officer and created a Scientific Advisory Board led by Mr.

Docherty and comprised of:

Michael Gibson, an interventional cardiologist, cardiovascular researcher, and educator who is CEO of the combined non-profit Baim and PERFUSE research institutes at Harvard Medical School;

Karen Aust, who holds a Ph.

D in Molecular Pharmacology from Stanford University and is deeply experienced in select therapeutic areas including cardiovascular and neuroscience;

Philip Ainslie, Professor, Research Chair, and co-director of the Centre of Heart, Lung, and Vascular Health at the University of British Columbia, Canada.

Our current patent portfolio includes patent family applications or grants pertaining to Lexaria’s compositions, methods of use in improving API bioavailability and palatability and methods of treatment for a range of therapeutic indications, orally or topically, for a wide variety of APIs encompassing cannabinoids;

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

Below we summarize Lexaria’s allowed/granted patents.

Below we summarize Lexaria’s granted patents.

Issued Patent #

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US 12,023,346

US 12,213,986

US 12,220,422

Research & Development

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Human Pilot Study #3 (GLP-1-H24-3)

During the quarter ended November 30, 2024, Lexaria completed dosing for this human pilot study in nine (9) healthy human volunteers without any serious adverse events.

During the quarter ended February 28, 2025, Lexaria provided partial results from its third human pilot study which investigated DehydraTECH-tirzepatide as compared to the Zepbound® brand of injected tirzepatide, with DehydraTECH-tirzepatide evidencing a 47% reduction in adverse events, a comparable overall reduction in blood glucose and a comparable increase in insulin levels.

The purpose of this study was to investigate a single daily dose of oral ingested DehydraTECH-tirzepatide capsules (compound-formulated using Zepbound® by Eli Lilly) administered over a seven-day period as compared to commercially available Zepbound® to evaluate tolerability, PK, and blood sugar.

Zepbound® is currently administered by injection only and was used as the tirzepatide input material for production of the DehydraTECH-tirzepatide capsules.

No serious adverse events were reported, and results from a battery of PK and pharmacodynamic outcomes from this human pilot study remain to be reported.

Chronic Dosing Animal Study (WEIGHT-A24-1)

During the quarter ended November 30, 2024, results from this obese rat diabetic-conditioned study of 12 study arms and 6-10 animals per arm were released.

The study investigated weight loss, PK, and blood sugar control over time of varied DehydraTECH formulations of semaglutide and liraglutide, alone and together with DehydraTECH-CBD as compared to commercially available Rybelsus®.

Specific results pertaining to body weight and blood sugar were released on October 22, and October 24, 2024, respectively, with the overall final body weight and blood sugar results from all 12 study arms being released on November 20, 2024.

These final results verified that DehydraTECH-liraglutide and a select DehydraTECH-CBD formulation were the top performing study arms, outperforming the Rybelsus® control group in both body weight-loss, by 11.53% and 10.65% respectively, and in blood sugar, by 11.13% and 3.35% respectively.

Additional blood and brain tissue PK data as well as liver and kidney function testing and blood chemistry analyses remain to be analysed and reported.

Based on these outcomes, Lexaria, via its wholly owned subsidiary, Lexaria (AU) Pty Ltd solidified plans for its study design for a Phase 1b Australian human study to evaluate select top performing DehydraTECH formulations to allow for maximum impact on blood glucose and body weight control while also evaluating safety and tolerability.

Chronic Dosing Human Study (GLP-1-H24-4)

During the quarter ended November 30, 2024, Lexaria via its wholly owned subsidiary, Lexaria (AU) Pty Ltd, received ethics board approval for its primary clinical sites and manufactured and delivered the Investigational Product to the Australian distributor for labelling, packaging and distribution for Study GLP-1-H24-4.

The Study is planned to commence with 80 overweight, obese, pre- or type 2 diabetic patients to investigate and compare the efficacy of DehydraTECH-CBD capsules, DehydraTECH-semaglutide capsules, DehydraTECH semaglutide combined with DehydraTECH-CBD capsules and Rybelsus® tablets (acting as the positive control).

All drugs will be administered daily by oral tablet or capsule – there are no drug injections involved in this Study.

First patient dosing commenced as announced December 19, 2024.

During the quarter ended February 28, 2025, Lexaria via its wholly owned subsidiary, Lexaria (AU) Pty Ltd, entered into a Project Agreement with Novotech (Australia) Pty Limited for the conduct of its Australian clinical study of DehydraTECH Cannabidiol and glucagon-like peptide 1 agonists alone or in combination, in overweight or obese, pre- and Type II Diabetes participants (GLP-1-H24-4) and began the associated site initiation visits and initial dosing of patients.

It was also determined during the quarter to add a 5 th study arm to GLP-1-H24-4 to investigate DehydraTECH formulated tirzepatide.

The objectives for the Study include discovering whether:

DehydraTECH processed CBD and/or semaglutide is safe over the Study duration in the Study population?

DehydraTECH-(pure)semaglutide will outperform Rybelsus®-semaglutide with its proprietary SNAC technology in measures of blood sugar control or weight loss?

DehydraTECH processed CBD and/or semaglutide or tirzepatide is safe over the study duration in the study population?

DehydraTECH processing of pure semaglutide will outperform Rybelsus®-semaglutide with its proprietary SNAC technology in measures of blood sugar control or weight loss?

DehydraTECH processing enhances real world outcomes such as weight loss and blood sugar control over the study duration?

DehydraTECH processing of pure semaglutide evidences reduced side effects during daily dosing for 12 weeks, as DehydraTECH processing of Rybelsus® seemed to achieve in our prior human pilot study, utilizing one single daily dose?

DehydraTECH processing of (pure or Zepbound) tirzepatide evidences reduced side effects during daily dosing for 12 weeks,

Human Pilot Study #5 (GLP-1-H25-5)

During the quarter ended February 28, 2025, Lexaria engaged a contract research organization and received Ethics Board Approval for the conduct of a human pilot study evaluation DehydraTECH-liraglutide against Saxenda® injectable liraglutide.

This study is intended to be conducted with 8-10 healthy volunteers with goals of demonstrating safety and pharmacokinetic performance utilizing orally dosed DehydraTECH-liraglutide.

On January 15, 2025, Lexaria received independent Ethics Board Approval to commence its human pilot study GLP-1-H25-5.

If the Study results are positive, it could support a decision to investigate oral DehydraTECH-liraglutide in a future Phase I registered trial.

Chronic Dosing Animal Study (WEIGHT-A24-1)

During the quarter ended February 28, 2025, brain and other tissue samples from this obese rat diabetic-conditioned study investigating weight loss, PK, and blood sugar control of varied DehydraTECH formulations of semaglutide and liraglutide, alone and together with DehydraTECH-CBD as compared to commercially available Rybelsus®, were sent for analysis by a third-party lab.

These analyses are still in progress and will be reported upon when concluded.

Biodistribution Study of DehydraTECH-semaglutide

On November 14, 2024, Lexaria announced that it had engaged a contract research organization to fluorescently tag DehydraTECH-semaglutide and a non-DehydraTECH-processed Rybelsus® mimicking comparator formulation to be ingested by Sprague-Dawley rats to track semaglutide distribution and localization with additional information being provided by key tissue samples.

This study work is underway and will be reported upon in due course.

During the quarter ended February 28, 2025, Lexaria completed its study which fluorescently tagged DehydraTECH-semaglutide and a non-DehydraTECH-processed Rybelsus® mimicking comparator formulation ingested by Sprague-Dawley rats to track semaglutide distribution and localization with additional information being provided by key tissue samples.

Analytical testing and interpretation is in progress and will be reported upon when concluded.

Long Term Stability Testing

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Hypertension Phase 1b IND Trial HYPER-H23-1

The Company intends to raise sufficient capital to commence this study in due course, upon more favorable financial market conditions.

The Company is evaluating the timing for commencement of this study.

Off-Balance Sheet Arrangements

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We believe that understanding the basis and nature of the estimates, judgments and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financials.

For a discussion of our critical accounting estimates, please read Note 4, Estimates and Judgments, as found in the financial statements in our Annual Report on Form 10-K for the year ended August 31, 2024.

There have been no material changes to the critical accounting estimates as previously disclosed in our 2024 Form 10-K.

A critical accounting estimate is an accounting estimate for which a) the nature of the estimate is material due to the related level of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and b) the impact of the estimate on the Company’s financial position or operating performance is material.

We did not identify any such estimates in our Annual Report on Form 10-K for the year ended August 31, 2024 and none have been identified for the six months ended February 28, 2025.

Funding Requirements

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As we move forward with our planned R&D studies in 2025, we anticipate that our expenditures will further increase and accordingly, we expect to incur increased operating losses and negative cash flows for the foreseeable future.

Through November 30, 2024, we have funded our operations primarily through the proceeds from the sale of common stock.

The Company has consistently incurred recurring losses and negative cash flows from operations, including net losses of $2,706,628 and $1,185,038 for the three-months ended November 30, 2024, and 2023, respectively.

Through February 28, 2025, we have funded our operations primarily through the proceeds from the sale of common stock.

The Company has consistently incurred recurring losses and negative cash flows from operations, including net losses of $5,423,600 and $1,837,771 for the six months ended February 28, 2025, and February 29, 2024, respectively.

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 and our At the Market (ATM) offerings.

The continuation of Lexaria as a going concern depends on raising additional capital and/or attaining and maintaining profitable operations.

The accompanying financial statements do not include any adjustment relating to the recovery and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should our Company discontinue operations.

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

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.

We have performed a review of our cash flow forecast and have concluded that funds on hand, combined with those expected from executed license agreements, will be sufficient to meet the Company's financial obligations for the twelve-month period following the filing of these consolidated financial statements on Form 10-Q.

Results of Operations for the Period Ended November 30, 2024, and 2023

Our net loss for the three-months ended for the respective items are summarized as follows:

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern within one year following the date that these consolidated financial statements on Form 10-Q are filed and do not include any adjustment relating to the recovery and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should our Company discontinue operations.

Management believes that given the Company’s current cash position, recurring losses from operations and net capital deficiency, there is substantial doubt as to the Company’s ability to continue as a going concern within one year following the date that these consolidated financial statements are issued.

The Company expects that its current cash resources will be sufficient to fund the Company’s operations through the fourth quarter of calendar year 2025.

Results of Operations for the Period Ended February 28, 2025, and February 29, 2024

Our net loss for the six months ended for the respective items are summarized as follows:

Cost of goods sold

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$ (3,585,829 )

Fees from intellectual property licensing and B2B sales totaled $174,000 and $9,923, respectively, for the three months ended November 30, 2024.

For the three months ended November 30, 2024, relative to the three months ended November 30, 2023, license fees and B2B sales increased by $29,010 and $4,535, respectively, while R&D sales decreased by $900 year-over year, reflecting an increase in minimum fees earned within our licensee contract and a continuing shift in emphasis away from pursuit of B2B clients as we move toward pharmaceuticals.

Fees from intellectual property licensing and B2B sales totaled $357,923 and $296,278, respectively, for the six-month periods ended February 28, 2025 and February 29, 2024.

For the six months ended February 28, 2025, relative to the six months ended February 29, 2024, license fees and B2B sales increased by $58,010 and $4,535, respectively, while R&D sales decreased by $900 year-over year, reflecting an increase in minimum fees earned within our licensee contract and a continuing shift in emphasis away from pursuit of B2B clients as we move toward pharmaceuticals.

Research and Development

Expenditures on R&D increased by $1,378,729 year-over-year for the three-month period ended November 30, 2024, due mainly to the completion of the manufacturing of its Investigational Drug Product for its Phase 1b Clinical Trial GLP-1-H24-4 and payment for certain start-up activities, licenses and engagements.

Expenditures on R&D increased by $2,818,866 year-over-year for the six-month period ended February 28, 2025, due primarily to the completion of the manufacturing of Investigational Drug Product and start-up activities related to our Phase 1b Clinical Trial (GLP-1-H24-4), combined with progression of our other GLP-1 studies.

Lexaria continues with applied development and programs in our pharmaceutical division with our primary focus being on optimization of DehydraTECH formulations of GLP-1 drugs, as well as advancing our DehydraTECH-CBD drug to treat hypertension.

Consulting Fees and Salaries

In the three-months ended November 30, 2024, consulting fees and salaries increased by $134,029 year-over-year primarily due to the replacement of the Company’s CEO, the addition of the former CEO as a Strategic Executive Consultant and the engagement of a new CFO.

In the six months ended February 28, 2025, consulting fees and salaries increased by $572,909 year-over-year primarily due to the transition of the Company’s former CEO to the newly created role of Strategic Executive Consultant, the award of restricted stock, the engagement of a new CEO, with significant experience in development stage pharmaceutical company management, and a new CFO.

Legal and Professional Fees

Our legal and professional fees decreased by $42,438 during the period compared to the same prior year period due to decreased patent filings and the utilization of legal advisory services.

The decrease also reflects reduced accounting fees related to financing activities in the period.

Our legal and professional fees increased by $25,154 during the six months ended February 28, 2025 as compared to the same prior year period due to incremental accounting and professional fees incurred during the period and associated with increased registration statement filings and the utilization of legal advisory services.

General and Administrative

Our other general and administrative expenses increased overall by $115,992 during the period ended November 30, 2024, over the same period last year.

Advertising and promotion increased by $55,477 as we embarked on an advertising campaign to bring the results of the Company’s R&D programs to the attention of various industry sectors and to the scientific and investment communities.

We also recognized a foreign currency transaction loss of $71,574 related to Canadian Dollar-denominated cash balances held by our US-based Bioscience subsidiary.

Our other general and administrative expenses increased in total by $281,390 during the six-month period ended February 28, 2025, as compared to the same prior year period.

The increase is attributable to advertising and promotion expenses, which increased by $138,222 as we continued an advertising campaign to bring the results of the Company’s R&D programs to the attention of various industry sectors and to the scientific and investment communities.

We also recognized foreign currency transaction losses of $89,598 related to Canadian Dollar-denominated cash balances held by our US-based bioscience subsidiary.

Liquidity and Financial Condition

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Cash flows used in operating activities

$ (2,726,045 )

$ (1,181,653 )

Cash flows used in investing activities

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Operating Activities

Net cash used in operating activities was approximately $2.73 million for the three months ended November 30, 2024, compared with $1.18 million during the same period in 2023.

The increase relates primarily to an increase of $1.52 million in our net loss, as we continued with the studies of DehydraTECH-powered GLP-1/GIP drugs listed above;

including completion of manufacturing and delivery of investigational product to our Australian distributor for labelling, packaging and distribution in connection with Study GLP-1-H24.

Net cash used in operating activities was approximately $4.2 million for the six months ended February 28, 2025, compared with $1.8 million during the same prior year period.

The increase is attributable to an increase of $3.6 million in our net loss, which was partially offset by an increase of $0.2 million in non-cash expenses and a decrease in net working capital of $1.0 million, as we continued with the studies of DehydraTECH-powered GLP-1/GIP drugs listed above, including completion of manufacturing and delivery of investigational product to our Australian distributor for labelling, packaging, and distribution in connection with Study GLP-1-H24-4.

Investing Activities

Net cash used in investing activities was $37,804 for the three-months ended November 30, 2024, compared to $40,026 for the same period in 2023.

The decrease was attributable to lower spending on the prosecution of intellectual property;

partially offset by purchases of laboratory equipment.

Net cash used in investing activities was $65,698 for the six months ended February 28, 2025, compared to $97,016 for the same prior year period.

The decrease relates primarily to lower spending on the prosecution of intellectual property, partially offset by purchases of laboratory equipment.

Financing Activities

Net cash from financing activities was approximately $4.35 million for the three months ended November 30, 2024, compared to approximately $1.82 million for the same period in 2023.

The increase relates to net proceeds from the sale of common shares.

Net cash from financing activities was approximately $4.4 million for the six months ended February 28, 2025, compared to approximately $5.3 million for the same prior year period.

The decrease relates to lower net proceeds from the exercise of warrants, which was partially offset by higher proceeds from the sale of common shares.

Liquidity and Capital Resources

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

Net losses attributable to shareholders were $2.70 million and $1.18 million for the three-months ended November 30, 2024, and 2023, respectively.

As of November 30, 2024, we had an accumulated deficit of $54.26 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.

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Sources of Liquidity

During the three-months ended November 30, 2024, the Company has completed the following:

During the six months ended February 28, 2025, the Company has completed the following:

In February 2025, the Company sold 6,585 shares of common stock through an amendment to its ATM offering.

Net proceeds from these sales totaled $11,720.

In October 2024, the Company sold 8,402 shares of common stock through an At the Market (ATM) offering for gross proceeds of $26,146.

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

Entered into a Securities Purchase Agreement whereby on October 16, 2024, the Company 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.

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We also issued the placement agent warrants to purchase up to 57,190 shares at an exercise price of $3.825 per share.

In October 2024, the Company sold 8,402 shares of common stock through an At the Market (ATM) offering for gross proceeds of $26,146.

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

We may also 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.

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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.

The Company has evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern.

As of November 30, 2024, the Company had cash and cash equivalents of approximately $8.1 million to settle $0.3 in current liabilities.

We have performed a review of our cash flow forecast and have concluded that our existing cash, combined with those expected from executed license agreements, will be sufficient to meet the Company's financial obligations for the twelve-month period following the filing of these consolidated financial statements on Form 10-Q.

Going Concern

The accompanying unaudited consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business.

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 filing of these consolidated financial statements on Form 10-Q.

Accordingly, there is substantial doubt as to our ability to continue as a going concern for at least one year following the date of the financial statements included in this Quarterly Report.

We intend to fund operations, working capital and other cash requirements for the twelve-month period subsequent to February 28, 2025 through equity financing arrangements and potentially from collaborations or strategic partnerships.

The successful outcome of future activities cannot be determined at this time and there is no assurance that, if achieved, we will have sufficient funds to execute our intended business plan or generate positive operating results.

The consolidated financial statements do not include any adjustments related to this uncertainty and as to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should we be unable to continue as a going concern.

Controls and Procedures

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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 SEC's rules and forms, and that such information is accumulated and communicated to our management, including our President, our Chief Executive Officer (Principal Executive Officer) and our Chief Financial Officer (Principal Financial and Accounting Officer) to allow for timely decisions regarding required disclosure.

As of November 30, 2024, the fiscal quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.

Based on the foregoing, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of November 30, 2024.

As of February 28, 2025, the fiscal quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.

Inherent limitations on Effectiveness of Controls

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, regulations, segregation of management duties, scale of organization, and personnel factors.

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, regulations, segregation of management duties, scale of organization, and personnel factors.

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

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Changes in Internal Control over Financial Reporting

During the quarter ended November 30, 2024, our controls and controls processes remained consistent with those in effect at August 31, 2024.

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended November 30, 2024, that have materially or are reasonably likely to materially affect our internal controls over financial reporting.

During the quarter ended February 28, 2025, our controls and controls processes remained consistent with those in effect at August 31, 2024.

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended February 28, 2025, that have materially or are reasonably likely to materially affect our internal controls over financial reporting.

PART II—OTHER INFORMATION

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis