What changed in this filing

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Item 1. Financial Statements

2025-07-14 compared with 2025-04-14 · 90 added, 68 removed, 428 unchanged (27% of the section changed)

25 unchanged sentences

Common shares issued and outstanding:

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

19,559,179 and 19,459,179 , respectively, at May 31, 2025, and 15,810,205 at August 31, 2024

Additional paid-in capital

9 unchanged sentences

LEXARIA BIOSCIENCE CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE LOSS

(Expressed in US Dollars except share amounts)

Three Months Ended

Six Months Ended

Nine Months Ended

Cost of goods sold

7 unchanged sentences

( 9,192,140 )

( 3,550,066 )

Other income (loss)

Interest income (expense)

Unrealized gain (loss) on marketable securities

Interest income

Unrealized loss on marketable securities

Total other income (loss)

9 unchanged sentences

$ ( 3,610,555 )

Other comprehensive income

Other comprehensive income (loss)

Foreign currency translation adjustment

5 unchanged sentences

Basic and diluted loss per share

Weighted average number of common shares outstanding

- Basic and diluted

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

Weighted average number of common shares outstanding - Basic and diluted

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

LEXARIA BIOSCIENCE CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

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

For the Nine Months Ended May 31, 2025 and 2024

(Expressed in US Dollars)

Non-controlling

Stockholders'

21 unchanged sentences

$ ( 384,038 )

Stock issued in equity offering

Stock based compensation

Foreign currency translation adjustment

( 3,789,092 )

Non-controlling interest

Balance May 31, 2025

$ ( 60,764,775 )

$ ( 385,552 )

Balance August 31, 2023

18 unchanged sentences

$ ( 372,949 )

Stock issued from exercise of warrants

Stock issued from exercise of options

Foreign currency translation adjustment

Stock-based compensation

( 1,781,693 )

Non-controlling interest

Balance May 31, 2024

$ ( 49,373,982 )

$ ( 375,568 )

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

For the Nine Months Ended May 31, 2025 and 2024

(Expressed in US Dollars)

7 unchanged sentences

Noncash lease expense

Unrealized (gain) loss on marketable securities

Unrealized loss on marketable securities

Lease accretion

11 unchanged sentences

Additions to intellectual property

$ ( 119,018 )

Purchase of equipment

Net cash used in investing activities

Cash flows provided by (used in) financing activities

$ ( 119,018 )

Cash flows provided by financing activities

Proceeds from shares sold for cash

Proceeds from exercise of warrants

Net cash provided by (used in) financing activities

Net cash provided by financing activities

Effect of exchange rate changes on cash

Net change in cash for the period

( 1,908,124 )

Cash at beginning of period

3 unchanged sentences

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

February 28, 2025

(Expressed in U.S.

10 unchanged sentences

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

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.

Net losses attributable to shareholders were $ 9.2 million and $ 3.6 million for the nine months ended May 31, 2025, and May 31, 2024, respectively.

As of May 31, 2025, we had an accumulated deficit of $ 60.8 million.

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

1 unchanged sentence

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.

During the nine months ended May 31, 2025, we raised $ 6.0 million in net proceeds from the sale of securities pursuant to our Registered Direct Offerings which closed in April 2025 and 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.

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.

1 unchanged sentence

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.

As of May 31, 2025, the Company had cash and cash equivalents of approximately $ 4.6 million to settle $ 1.5 million in current liabilities.

We have performed a review of our cash flow forecast, and given our current development plans and cash management efforts, we anticipate that our cash resources will be sufficient to fund operations through the third quarter of fiscal year 2026.

However, we have also 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.

14 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 February 28, 2025, or August 31, 2024.

The Company had no cash equivalents as of May 31, 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 six months ended February 28, 2025 and February 29, 2024.

No sales-based usage fees were recognized for the nine months ended May 31, 2025 and May 31, 2024.

Third Party Contracted Manufacturing

42 unchanged sentences

The carrying amounts of instruments approximate their fair values due to their short maturities or quoted market prices.

The Company’s headquarters and operations are located in Canada which results in exposure to market risks from fluctuations in foreign currency rates.

The Company’s headquarters are located in Canada and it also has operations in Australia, which results in exposure to market risks from fluctuations in foreign currency rates.

The foreign currency exchange risk is the financial risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates.

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 February 28, 2025.

Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk as the impact of USD/CAD and USD/AUD exchange rate changes 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 May 31, 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 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.

In the nine months ended May 31, 2025, two customers accounted for 100 % of consolidated revenues.

In the nine months ended May 31, 2024, two customers accounted for 98 % of consolidated revenues.

As of May 31, 2025, the Company had $ 184,129 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 February 28, 2025 and August 31, 2024 consist of the following:

Accounts receivable as of May 31, 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 February 28, 2025 and August 31, 2024:

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

Advertising & Conferences

Research and Development

Research & Development

Legal & Accounting Fees

8 unchanged sentences

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

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:

During the nine months ended May 31, 2025, the Company recognized an impairment loss of $ 33,540 related to those abandoned applications.

The Company recognized $ 27,212 of amortization expense related to patents and licenses in the nine months ended May 31, 2025.

The following table summarizes expected future amortization of the Company’s patent portfolio as of May 31, 2025:

Fiscal Years Ending August 31,

Property & Equipment, net

February 28, 2025

Period Amortization

Accumulated Amortization

Leasehold improvements

4 unchanged sentences

August 31, 2024

Period Amortization

Accumulated Amortization

Leasehold improvements

3 unchanged sentences

$ ( 517,616 )

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.

Depreciation and amortization for the nine months ended May 31, 2025 and the year ended August 31, 2024 totalled $ 39,215 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 February 28, 2025 and August 31, 2024 consist of the following:

February 28 ,

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

Accounts Payable

4 unchanged sentences

Balance Ending

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.

A breakdown of our revenues by type for the nine months ended May 31, 2025, and May 31, 2024, are as follows:

Nine Months Ended May 31

The Company recognized $ 522,000 and $ 373,990 in licensing revenue for the nine months ended May 31, 2025, and May 31, 2024, respectively.

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 $ 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.

During the nine-month period ended May 31, 2025, and May 31, 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.

For the nine months ended May 31, 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 six months ended February 28, 2025, the Company completed the following issuances of common shares and warrants:

During the nine months ended May 31, 2025, the Company completed the following issuances of common shares and warrants:

On April 28, 2025, the Company, pursuant to a Securities Purchase Agreement, issued 2,000,000 shares of common stock at a purchase price of $ 1.00 per share for gross proceeds of $ 2.0 million.

Share issuance costs of $ 0.3 million were charged to additional paid in capital.

The shares were registered pursuant to a take down of the Company’s Form S-3 registration statement.

We also issued the placement agent warrants to purchase up to 70,000 shares for a period of five years at an exercise price of $ 1.25 per share.

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 .

1 unchanged sentence

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.

On October 16, 2024, the Company, pursuant to a Securities Purchase Agreement, 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.

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

The shares were 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.

We also issued the placement agent warrants to purchase up to 57,190, for a period of five years from the date of issuance 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.

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

A continuity schedule for warrants for the nine months ended May 31, 2025, is presented below:

Balance, August 31, 2024

1 unchanged sentence

( 3,311,687 )

Balance, February 28, 2025

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

Balance, May 31, 2025

A summary of warrants outstanding as of May 31, 2025, is presented below:

Number of Warrants

13 unchanged sentences

Cancelled/expired

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.

Balance May 31, 2025 (outstanding)

Balance May 31, 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 five 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

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 five 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 five years.

On May 15, 2025, the Company granted a total of 444,500 options with an exercise price of $ 1.04 and a term of five years to its directors, officers and employees.

The fair value of stock options granted in the nine months ended May 31, 2025, were estimated as of the date of the grant by using the Black-Scholes option pricing model with the following assumptions:

Expected volatility

Risk-free interest rate

3.57 - 4.18 %

Expected life

2 unchanged sentences

$ 0.62 -$ 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.

Stock-based compensation expense for the nine-month periods ended May 31, 2025, and May 31, 2024, was $ 736,770 and $ 395,726 , respectively.

As of May 31, 2025, the total unrecognized non-cash compensation costs are $ 498,642 related to 203,546 non-vested stock options with a $ 3.46 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 1.41 years.

13 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 February 28, 2025:

2025 (six months remaining)

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 May 31, 2025:

2025 (three months remaining)

Total lease payments

8 unchanged sentences

Licensing revenues are significantly concentrated on two licensees.

Six Months Ended February 28, 2025

Nine months Ended May 31, 2025

Cost of goods sold

8 unchanged sentences

$ ( 9,214,206 )

Six Months Ended February 29, 2024

Nine Months Ended May 31, 2024

Cost of goods sold

2 unchanged sentences

( 2,531,745 )

( 3,925,522 )

Other Income (Expense)

4 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-Q

Item 1. Financial Statements