What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-01-13 compared with 2025-07-14 · 83 added, 117 removed, 161 unchanged (55% of the section changed)

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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 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 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.

During the Study, over 1,500 blood plasma samples were collected from the total starting rat population of 72 animals for purposes of detailed PK drug delivery analyses.

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 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.

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 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.

Research & Development Summary

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

During the three months ended November 30, 2025, Lexaria:

(GLP-1-H24-4) - via its wholly owned subsidiary, Lexaria (AU) Pty Ltd, completed final data collection for 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.

Subsequently, in December 2025, the Company announced findings from this study indicating that it met its primary endpoint objectives showing good safety and tolerability of all DehydraTECH test articles with clear reductions in total and gastrointestinal-specific adverse events relative to the Rybelsus® control arm.

The Study demonstrated positive findings across numerous parameters with comparability, and in some instances, superiority to the Rybelsus® control arm;

Announced the extension of the Material Transfer Agreement (“MTA”) through April 30, 2026 originally entered into with a pharmaceutical company (“PharmaCO”) on September 4, 2024.

The extension provides PharmaCO with the time required for receipt and review of the full dataset from Lexaria’s Australian study, at which time further information will be provided.

This allows the two parties to continue their relationship under the MTA, keep the temporary exclusive license active and in force, and contemplate additional strategic planning discussions with PharmaCO’s human clinical development team.

During the three months ended November 30, 2025, the Company entered into a Securities Purchase Agreement whereby on:

On September 29, 2025, the Company, issued 2,666,667 shares of common stock at a purchase price of $1.50 per share for gross proceeds of $4.0 million.

Share issuance costs of $0.6 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 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.

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.

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:

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;

Concurrently, the Company issued 2,666,667 share purchase warrants, entitling the holders thereof to purchase up to 2,666,667 shares of common stock at a price of $1.37 per share for a period of five years from the effective date of the S-1 Registration Statement registering the shares of common stock issuable upon exercise of the warrants.

We also issued to HCW, the exclusive placement agent for the offering, warrants to purchase up to 93,333 shares at an exercise price of $1.875 per share.

HCW was paid 7% of the gross proceeds and was reimbursed $70,000 for its expenses and $15,950 in closing fees.

fat soluble vitamins;

NSAID pain medications;

and nicotine and its analogs.

nicotine and its analogs;

and cannabinoids.

The pending and granted patents also cover the manufacturing and processing methods used to combine a variety of fatty acid-rich triglyceride oils with active pharmaceutical ingredients.

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We continue to investigate national and international opportunities to pursue expansions and additions to our intellectual property portfolio.

Patents have been filed and/or granted specifically for the use of DehydraTECH with cannabinoids for the treatment of heart disease and hypertension to support our anticipated clinical trial work under our cleared Investigational New Drug (“IND”) application with the Food and Drug Administration (“FDA”), and for treatment of other prospective therapeutic indications of interest to us including epilepsy and diabetes/weight loss.

Patents have also been filed specifically for the use of DehydraTECH with GLP-1/GIP drugs to support our ongoing and expanding cardiometabolic clinical research programs in this therapeutic field and for diabetes/weight loss.

Patents have been filed or granted specifically for the use of DehydraTECH with GLP-1/GIP drugs to support our ongoing and expanding cardiometabolic clinical research programs in this therapeutic field for the treatment of diabetes/weight loss.

Patents have been filed or granted specifically for the use of DehydraTECH with cannabinoids for the treatment of heart disease and hypertension to support our anticipated clinical trial work under our cleared Investigational New Drug (“IND”) application with the Food and Drug Administration (“FDA”), and for treatment of other prospective therapeutic indications of interest to us including epilepsy.

We will continue to seek beneficial acquisitions of intellectual property if and when we believe it is advisable to do so.

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AU 2021261261

AU 2023200736

US 11,700,875

12 unchanged sentences

AU 2024202447

AU 2024202475

US 12,397,042

#27 Compositions and Methods for Treating Diabetes

US 12,472,236

Research & Development

Lexaria is advancing several R&D activities in both preclinical and clinical programs.

Currently, our primary clinical research areas of interest are focused on the investigation of DehydraTECH-powered GLP-1/GIP and related drugs as well as CBD for the treatment of diabetes and weight loss and, also, CBD for the reduction of hypertension for which our IND application to perform a Phase 1b study has received a Study May Proceed letter from the FDA in early calendar-2024.

From time to time the Company will engage in contract R&D for third parties who are interested in evaluating DehydraTECH in their products.

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

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.

The Company regularly pursues new R&D programs that investigate potential commercial applications for the incorporation of DehydraTECH.

These include, but are not limited to, ongoing programs to explore different therapeutic indications which DehydraTECH-enhanced drug products can be utilized to treat.

Currently, our primary clinical research areas of interests are focused on the investigation of DehydraTECH-powered GLP-1/GIP drugs as well as CBD for the treatment of diabetes and weight loss and, also, CBD for the reduction of hypertension for which our IND application to perform a Phase 1b study received a Study May Proceed letter from the FDA in early calendar-2024.

Previously, our study programs provided successful human and/or animal testing results with DehydraTECH formulations of nicotine for oral pouches and prospective nicotine replacement therapy, human hormones, antiviral drugs, CBD for diabetes, weight loss, seizure disorder applications, and others.

Depending on the number or complexity of the programs undertaken, R&D budgets are expected to vary significantly.

It is in our best interest to remain flexible at this early stage of our R&D efforts in order to capitalize on potential novel findings from early-stage tests and thus redirect research when necessary into specific avenues that offer the most reward.

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

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:

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)

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 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.

During the quarter ended November 30, 2025, Lexaria via its wholly owned subsidiary, Lexaria (AU) Pty Ltd, commenced the close-out and data analysis activities for its Australian clinical study (GLP-1-H24-4), with its CRO service provider, Novotech (Australia) Pty Limited.

GLP-1-H24-4 investigated 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 resulted in the dosing of 100+ participants.

The Study demonstrated positive findings across numerous parameters with comparability, and in some instances, superiority to the Rybelsus® control arm.

Biodistribution Study of DehydraTECH-semaglutide

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.

During the quarter ended November 30, 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.

As announced on September 19, 2025, the study results from ex vivo organ imaging revealed an interesting trend whereby, when tested against the naïve and vehicle groups, the DehydraTECH FTS composition demonstrated a predominantly higher apparent trend in brain biodistribution as compared to the Rybelsus® mimicking formulation.

These results suggested that the efficacy of the DehydraTECH-semaglutide composition witnessed in Lexaria’s other studies may be linked to enhancements in brain tissue delivery and action, in turn supporting improved pharmacodynamic performance.

Furthermore, perhaps to be determined through future testing, Lexaria noted in connection with these results that it may be conceivable that complementary biodistribution benefits might be derived through utilization of a similar DehydraTECH semaglutide composition combined with the Rybelsus® excipients, recognizing that marked safety and efficacy improvements were evidenced with DehydraTECH-processed Rybelsus® over Rybelsus® alone in Lexaria’s previous human pilot studies GLP-1-H24-1 and GLP-1-H24-2.

Long Term Stability Testing

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Hypertension Phase 1b IND Trial HYPER-H23-1

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.

The FDA provided Lexaria with a positive written response on August 10, 2022, from our pre-IND meeting regarding DehydraTECH-CBD for the treatment of hypertension.

The FDA confirmed that it had agreed with Lexaria’s proposal to pursue a 505(b)(2) new drug application (“NDA”) regulatory pathway for our program.

On January 29, 2024, Lexaria submitted its IND application with the FDA and it received a Study May Proceed letter from the FDA on February 29, 2024.

Since that time, Lexaria has filed its Annual Report for study HYPER-H23-1 to maintain its active status and continues to address certain of the FDA conditions while also seeking funding to commence the study.

The IND application was supported by the results of Lexaria’s five investigator-initiated human clinical studies of its DehydraTECH-CBD which were conducted between 2018-2023, in an aggregate total of 134 people, without recording a single serious adverse event (the “HYPER Studies”).

The HYPER Studies evidenced significant reductions in resting blood pressure over both acute and multi-week dosing regimens alone and, in some cases, complementary to standard of care medications;

suggesting that DehydraTECH-CBD has the potential to have broad therapeutic utility.

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 nine months ended May 31, 2025.

We did not identify any such estimates in our Annual Report on Form 10-K for the year ended August 31, 2025 and none have been identified for the three months ended November 30, 2025.

Funding Requirements

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As we move forward with our planned R&D studies in 2026, 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 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.

Through November 30, 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 $1,597,503 and $2,706,628 for the three months ended November 30, 2025, and November 30, 2024, respectively.

During the three months ended November 30, 2025, we raised $3.4 million in net proceeds from the sale of securities pursuant to our Registered Direct offering which closed in September, 2025.

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.

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.

The Company expects that its current cash resources will be sufficient to fund the Company’s operations through the first quarter of fiscal year 2027.

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:

Results of Operations for the Period Ended November 30, 2025, and November 30, 2024

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

Cost of goods sold

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Other income (loss)

$ (9,214,206 )

Net loss before income taxes

$ (1,595,712 )

$ (2,706,628 )

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.

Fees from intellectual property licensing and B2B sales totaled $0 and $183,923, respectively, for the three-month periods ended November 30, 2025 and November 30, 2024.

For the three months ended November 30, 2025, relative to the three months ended November 30, 2024, license fees and B2B sales decreased by $174,000 and $9,923, respectively, reflecting the expiration of the Premier licensing contract and a continuing shift in emphasis away from pursuit of B2B clients as we move toward pharmaceuticals.

The Company did not recognize any other revenue during the three months ended November 30, 2025 or the three months ended November 30, 2024.

Research and Development

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.

Expenditures on R&D decreased by $1,281,880 year-over-year for the three-month period ended November 30, 2025, as we neared completion of our Phase 1b Clinical Trial (GLP-1-H24-4).

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 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.

In the three months ended November 30, 2025, consulting fees and salaries increased by $31,272 year-over-year, primarily due to cost of living salary adjustments ($89,502), largely offset by lower consulting fees as the Company reduced its engagements of outside consultants, discontinuing those for which related fees exceeded perceived business benefit ($33,711), and lower stock-based compensation ($24,519).

Legal and Professional Fees

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.

Our legal and professional fees increased by $149,887 during the three months ended November 30, 2025 as compared to the same prior year period due to higher 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 $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.

Our other general and administrative expenses decreased in total by $197,558 during the three-month period ended November 30, 2025, as compared to the same prior year period.

The decrease is primarily attributable to lower spending on advertising and promotions ($189,586).

Liquidity and Financial Condition

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$ (2,726,045 )

$ (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 $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.

Net cash used in operating activities was approximately $1.0 million for the three months ended November 30, 2025, compared with $2.7 million during the same prior year period.

The decrease is attributable to a decrease of $1,109,125 in our net loss, combined with a decrease in net working capital of $667,511 and partially offset by a decrease of $34,690 in non-cash expenses as we neared completion of Study GLP-1-H24-4.

Investing Activities

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.

Net cash used in investing activities was $5,099 for the three months ended November 30, 2025, compared to $37,804 for the same prior year period.

The decrease relates primarily to lower spending on the prosecution of intellectual property and purchases of laboratory equipment.

Financing Activities

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.

Net cash from financing activities was approximately $3.47 million for the three months ended November 30, 2025, compared to approximately $4.35 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.

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

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.

Net losses attributable to shareholders were $1.6 million and $2.70 million for the three months ended November 30, 2025, and November 30, 2024, respectively.

As of November 30, 2025, we had an accumulated deficit of $65.1 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 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.

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.

During the three months ended November 30, 2025, the Company has completed the following:

Entered into a Securities Purchase Agreement whereby on September 29, 2025, the Company issued 2,666,667 shares of common stock at a purchase price of $1.50 per share for gross and net proceeds of $4.0 million and $3.4 million, respectively.

Concurrently, the Company issued, by way of a private placement transaction, 2,666,667 share purchase warrants, entitling the holder thereof to purchase up to 2,666,667 shares of common stock at a price of $1.37 per share for a period of five years from the effective date of the S-1 Registration Statement registering the warrant shares.

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-1 registration statement.

We also issued the placement agent warrants to purchase up to 93,333 shares for a period of five years from the date of issuance at an exercise price of $1.875 per share.

On December 14, 2025, we entered into a securities purchase agreement with certain institutional investors, pursuant to which we agreed to sell in a registered direct offering 2,661,600 shares of common stock at a purchase price of $1.315 per share for gross and net proceeds of $3.5 million and $3.0 million, respectively.

Concurrently, the Company issued 2,661,600 share purchase warrants, entitling the holder thereof to purchase up to 2,661,600 shares of common stock at a price of $1.19 per share for a period of five years from the effective date of the registration statement registering the shares of common stock issuable upon exercise of the warrants.

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 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.

As of November 30, 2025, the Company had cash and cash equivalents of approximately $4.3 million to settle $1.5 million in current liabilities.

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 May 31, 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 November 30, 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 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.

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 May 31, 2025.

As of November 30, 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

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Changes in Internal Control 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.

During the quarter ended November 30, 2025, our controls and controls processes remained consistent with those in effect at August 31, 2025.

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended November 30, 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