What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-14 compared with 2025-04-14 · 88 added, 65 removed, 190 unchanged (45% of the section changed)

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The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in US dollars.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in US$.

All references to “common shares” and “shares” refer to the common shares in our capital stock, unless otherwise indicated.

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This technology extends across many categories beyond the primary pharmaceutical focus of the Company, from foods and beverages to cosmetic products and nutraceuticals.

Research & Development

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

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.

During the nine months ended May 31, 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).

Each arm is compared to others to evaluate the effectiveness, safety, and outcomes of the treatments being tested.

Each arm was compared to others to evaluate the effectiveness, safety, and outcomes of the treatments being tested.

Each group of the Study was dosed for a 12-week period following the initial acclimation period.

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Results showed that DehydraTECH-enhanced liraglutide and certain CBD formulations outperformed the Rybelsus ® formulations with respect to lowering blood sugar and having greater body weight-control.

Blood and brain tissue PK is also in the process of being analysed to help determine whether DehydraTECH processing resulted in higher blood and brain absorption than non-DehydraTECH groups, as Lexaria has evidenced numerous times in previous animal studies.

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 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.

Blood and brain tissue PK is also in the process of being analyzed to help determine whether DehydraTECH processing resulted in higher blood and brain absorption than non-DehydraTECH groups, as Lexaria has evidenced numerous times in previous animal studies.

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

Further, during the nine months ending May 31, 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.

In addition, the DehydraTECH-tirzepatide blood levels increased steadily and more consistently each day of the study, avoiding the abrupt peaks or declines seen with Zepbound® injections.

Of note was the fact that on the final day of the study, 50% of the participants dosed with DehydraTECH-tirzepatide experienced their peak levels, indicating that their levels were still rising.

Also during the nine months ending May 31, 2025, Lexaria via its wholly owned subsidiary, Lexaria (AU) Pty Ltd, received Ethics Board Approval pursuant to a Project Agreement with Novotech (Australia) Pty Limited for the conduct of its Australian Phase 1b 12-week chronic clinical study of DehydraTECH formulated cannabidiol and semaglutide (separately and in combination) and tirzepatide in overweight or obese, or pre- and Type II diabetic participants (GLP-1-H24-4).

As announced April 3, 2025, participant enrolment for all five arms of study GLP-1-H24-4 had been completed entering a total of 24 subjects per arm, with the full results from the study expected to be reported during the fourth quarter of calendar-2025.

More recently, on June 11, 2025, Lexaria announced completion of its human pilot study GLP-1-H25-5 in ten (10) overweight human volunteers, which tested a DehydraTECH-enhanced liraglutide glucagon-like peptide-1 receptor agonist compared to the Saxenda® brand of injected liraglutide.

Positive partial results were released indicating that DehydraTECH-liraglutide, as compared to Saxenda®, evidenced a 22.7% reduction in adverse events with, notably, a 67% reduction in nausea incidence and a 31% reduction in gastrointestinal adverse events overall.

The results also indicated 9 out of 10 subjects experienced weight loss in each arm, with remarkable similarity in blood glucose and insulin levels and patterns evidenced throughout the duration of the study between arms.

Lexaria noted that these positive findings provide support for possible pursuit of a 505(b)2 new drug application expedited regulatory development pathway for DehydraTECH-liraglutide, pending pharmaceutical partner interest that the Company is now searching for and subject to successful completion of pending pharmacokinetic findings from the study that remain to be analyzed and reported upon.

During the nine months ended May 31, 2025, the Company also entered into Securities Purchase Agreements 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.

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

We also issued the placement agent warrants to purchase up to 57,190 shares for a period of five years from the date of issuance, at an exercise price of $3.825 per share;

April 28, 2025, the Company issued 2,000,000 shares of common stock at a purchase price of $1.00 per share for gross and net proceeds of $2.0 million and $1.7 million, respectively.

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

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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.

Corporate Governance

Also, during the nine months ended May 31, 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:

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US 12,220,422

AU 2024202475

Research & Development

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

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.

During the quarter ended May 31, 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.

In addition, the DehydraTECH-tirzepatide blood levels increased steadily and more consistently each day of the study, avoiding the abrupt peaks or declines seen with Zepbound® injections.

Of note was the fact that on the final day of the study, 50% of the participants dosed with DehydraTECH-tirzepatide experienced their peak levels, indicating that their levels were still rising.

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

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.

During the quarter ended May 31, 2025, Lexaria via its wholly owned subsidiary, Lexaria (AU) Pty Ltd, commenced its Australian clinical study (GLP-1-H24-4), with Novotech (Australia) Pty Limited its CRO.

GLP-1-H24-4 will investigate DehydraTECH formulated cannabidiol and semaglutide alone or in combination, as well as DehydraTECH formulated tirzepatide, in overweight or obese or pre- and Type II diabetes participants.

Participant enrolment for all five arms of study GLP-1-H24-4 had been completed entering a total of 24 subjects per arm, whereby currently the dosing of the 100+ participants is over half-way completed.

The full results from the study are expected to be reported during the fourth quarter of calendar 2025.

The objectives for the Study include discovering whether:

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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.

Subsequent to the quarter ended May 31, 2025, Lexaria announced completion of its human pilot study GLP-1-H25-5 in ten (10) overweight human volunteers, which tested a DehydraTECH-enhanced liraglutide glucagon-like peptide-1 receptor agonist compared to the Saxenda® brand of injected liraglutide.

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.

During the quarter ended May 31, 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

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.

During the quarter ended May 31, 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 are in progress and will be reported upon when concluded.

Long Term Stability Testing

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Along with improved tolerability, PK and efficacy performance, long term stability is crucial if oral variants of GLP-1 / GIP drugs are to be seriously considered as replacements for currently injectable versions of these drugs.

Stability findings thus far are positive and meeting internal expectations.

Hypertension Phase 1b IND Trial HYPER-H23-1

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

In early calendar year 2024, we received a Study May Proceed letter from the FDA with regard to our IND application to perform a Phase 1b study to evaluate the use of DehydraTECH-CBD for the reduction of hypertension.

Since that time, the study has been placed on hold due to budgetary constraints.

The commencement of this study is contingent upon the receipt of significant additional capital, or our ability to attract a development partner to fund the study, the timing of which is currently unknown.

Off-Balance Sheet Arrangements

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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.

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 nine months ended May 31, 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 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.

Through May 31, 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 $9,214,206 and $3,622,083 for the nine months ended May 31, 2025, and May 31, 2024, respectively.

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 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 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:

The Company expects that its current cash resources will be sufficient to fund the Company’s operations through the third quarter of fiscal year 2026.

However, management has also concluded 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.

Results of Operations for the Period Ended May 31, 2025, and May 31, 2024

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

Cost of goods sold

Research and development

Research & development

Consulting fees & salaries

Legal and professional

Other general and administrative

Other general & administrative

Other income (loss)

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$ (5,592,123 )

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.

Fees from intellectual property licensing and B2B sales totalled $531,923 and $380,278, respectively, for the nine-month periods ended May 31, 2025 and May 31, 2024.

For the nine months ended May 31, 2025, relative to the nine months ended May 31, 2024, license fees and B2B sales increased by $148,010 and $4,535, respectively, 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.

Other revenue decreased by $900 for the nine-month period ended May 31, 2025 relative to the nine months ended May 31, 2024.

Research and Development

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.

Expenditures on R&D increased by $4,963,278 year-over-year for the nine-month period ended May 31, 2025, due primarily to the completion of the manufacturing of Investigational Drug Product and the conduct of our Phase 1b Clinical Trial (GLP-1-H24-4), combined with the completion and analyses 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 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.

In the nine months ended May 31, 2025, consulting fees and salaries increased by $919,976 year-over-year primarily due to the transition of the Company’s former CEO to the newly created role of Strategic Executive Consultant, the awards of stock options and restricted stock, the engagement of a new CEO with significant experience in development stage pharmaceutical company management, and of a new CFO.

Legal and Professional Fees

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.

Our legal and professional fees decreased by $169,174 during the nine months ended May 31, 2025 as compared to the same prior year period due to lower accounting and professional fees associated with registration statement filings, financing activities and the utilization of legal advisory services.

General and Administrative

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.

Our other general and administrative expenses increased in total by $81,741 during the nine-month period ended May 31, 2025, as compared to the same prior year period.

The increase is attributable to foreign currency transaction losses of $103,582 related to Canadian Dollar-denominated cash balances held by our US-based bioscience subsidiary and realized foreign exchange losses incurred by our Australian subsidiary, combined with higher insurance premiums and partially offset by lower advertising and promotion expenses and impairment losses.

Liquidity and Financial Condition

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Cash flows used in operating activities

$ (7,807,889 )

$ (3,067,344 )

Cash flows used in investing activities

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Net change in cash for the period

$ (1,908,124 )

Operating Activities

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.

Net cash used in operating activities was approximately $7.8 million for the nine months ended May 31, 2025, compared with $3.1 million during the same prior year period.

The increase is attributable to an increase of $5.6 million in our net loss, which was partially offset by an increase of $0.3 million in non-cash expenses and a decrease in net working capital of $0.6 million, as we continued with the studies of DehydraTECH-powered GLP-1/GIP drugs, 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 $65,698 for the six months ended February 28, 2025, compared to $97,016 for the same prior year period.

Net cash used in investing activities was $85,141 for the nine months ended May 31, 2025, compared to $119,018 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 $4.4 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.

Net cash from financing activities was approximately $6.0 million for the nine months ended May 31, 2025, compared to approximately $10.3 million for the same prior year period.

The decrease relates to lower net proceeds from the sale of common shares and the lack of warrants being exercised.

Liquidity and Capital Resources

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.

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Sources of Liquidity

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.

During the nine months ended May 31, 2025, the Company has completed the following:

Entered into a Securities Purchase Agreement whereby on April 28, 2025, the Company issued 2,000,000 shares of common stock for gross and net proceeds of $2.0 million and $1.7 million, respectively.

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 amendment to its At the Market (ATM) offering.

Net proceeds from these sales totalled $11,720.

In October 2024, the Company sold 8,402 shares of common stock through an 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.

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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.

We also issued the placement agent warrants to purchase up to 57,190 shares for a period of five years from the date of issuance at an exercise price of $3.825 per share.

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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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.

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 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.

We intend to fund operations, working capital and other cash requirements for the twelve-month period subsequent to May 31, 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.

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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 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.

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 February 28, 2025.

As of May 31, 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 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.

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.

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 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.

During the quarter ended May 31, 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 May 31, 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