What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-07-13 compared with 2026-04-13 · 52 added, 58 removed, 208 unchanged (35% of the section changed)

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

During the six months ended February 28, 2026, Lexaria:

During the nine months ended May 31, 2026, Lexaria:

Completed final data collection, via its wholly owned subsidiary, Lexaria (AU) Pty Ltd, for its Australian Phase 1b 12-week chronic clinical study (GLP-1-H24-4) of DehydraTECH formulated cannabidiol and semaglutide (separately and in combination) and tirzepatide in overweight or obese, or pre- and Type II diabetic participants.

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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.

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

The extension provides PharmaCO with the time required for receipt and review of the full dataset from Lexaria’s GLP-1-H26-7 pilot 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;

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These results demonstrated achievement of the primary safety and tolerability endpoint for DHT-LIR, comparable functionality of DHT-LIR and Saxenda® and comparable efficacy.

Announced information on three new studies from its 2026 R&D Program which are representative of the Company’s primary areas of focus during for the fiscal year (see MD&A Research & Development section below).

During the six months ended February 28, 2026, the Company entered into a Securities Purchase Agreement whereby on:

Announced information on three new studies from its 2026 R&D Program, including the receipt of ethics board approval for its Human Pilot Study #7 (GLP-1-H26-7), the engagement of the contract research organization for each of its two GLP-1 animal studies, Animal Study #1 (GLP-1-A26-1) and Animal Study #2 (GLP-1-A26-2), and, shortly after May 31, the completion of dosing in Animal Study #2 which are representative of the Company’s primary areas of focus during for the fiscal year (see MD&A Research & Development section below).

During the nine months ended May 31, 2026, 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.

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

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 GLP-1/GIPs;

fat soluble vitamins;

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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 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 GLP-1, GIP, and glucagon 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.

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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.

Currently, our primary clinical research areas of interests are focused on the investigation of DehydraTECH-powered GLP-1, GIP, and glucagon 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 hypertension, 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 February 28, 2026, Lexaria via its wholly owned subsidiary, Lexaria (AU) Pty Ltd, completed 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.

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.

Management has assessed the Company’s research and development activities and expenditures to determine which activities and expenditures are likely to be eligible for the Australian research and development incentive described in Note 2 above and has submitted an application for the credit with respect to eligible expenditures incurred during the fiscal year ended August 31, 2025.

Human Pilot Study #7 (GLP-1-H26-7)

During the quarter ended February 28, 2026, Lexaria with its third-party bioanalytical service providers completed its pharmacokinetic (“PK”) blood liraglutide quantitation and profiling results from this study.

This included the use of two different manufactured brands of commercially available ELISA (enzyme-linked immunosorbent assay) test kits.

Due to challenges encountered with background signal noise detection (believed to be attributable to the fact that liraglutide and other peptide drugs are commonly known to bind with, and have poor separation from, albumin;

a naturally occurring protein present in human blood plasma) that complicated the ability to accurately capture blood liraglutide measurements in both the Saxenda ® and DHT-LIR study samples, results were limited to exploratory visualization of the raw ELISA signals which, nonetheless, over time demonstrated broadly similar temporal patterns.

The visualization of the similar signal patterns of the two treatments is consistent with the instances of functional comparability otherwise demonstrated in the study.

The two most important strategic objectives of this study were:

1 – To discover whether the DehydraTECH processing of liraglutide would work sufficiently enough to potentially allow for an oral version of the drug to be compared to the current injection-only delivery method;

2 – To demonstrate that oral DHT-LIR could produce comparable functional results to the injected version, allowing for an expedited FDA regulatory development pathway known as a 505(b)(2) new drug application that is available when an alternate version of a drug (e.g., the dosage form change from injection to oral administration as tested within this Study) retains certain similar performance characteristics as an earlier-approved version of that same drug.

Both of these objectives were successfully accomplished, while also evidencing tolerability advantages of DHT-LIR over Saxenda® from a user appeal perspective.

During the quarter ended May 31, 2026, Lexaria engaged its contract research organization (“CRO”) and received ethics board approval for this 5-week parallel group design study intended to evaluate the safety, tolerability and pharmacokinetic (“PK”) properties of two oral DehydraTECH-semaglutide compositions against semaglutide tablets commercially sold under the Wegovy® brand.

The DehydraTECH-semaglutide compositions being investigated are:

A DehydraTECH-semaglutide tablet formulated to mimic Novo Nordisk’s® Rybelsus® and Wegovy® oral semaglutide tablets which incorporate salcaprozate sodium (“SNAC”) and are designed to temporarily adhere to the stomach lining and disintegrate and dissolve releasing agents in a focal manner that aids in optimizing absorption of the semaglutide into the human body;

A DehydraTECH-semaglutide capsule, as previously investigated by Lexaria (AU) Pty Ltd in our Phase 1b clinical trial (GLP-1-H24-4) performed in Australia, but with the addition of SNAC as was also the case in our previous successful clinical study GLP-1-H24-1.

Results from this study are anticipated to be released during the second quarter of fiscal year 2027.

Animal Study #1 (GLP-1-A26-1)

During the quarter ended May 31, 2026, Lexaria engaged its CRO to perform an animal study for the purposes of evaluating between 8 to 11 formulation enhancements to the DehydraTECH-semaglutide and DehydraTECH-CBD formulations, previously studied in Lexaria (AU) Pty Ltd’s Phase 1b clinical trial performed in Australia, in Sprague-Dawley rats over a 24-hour period.

In addition to quantifying the PK performance of each enhanced composition of DehydraTECH-semaglutide and DehydraTECH-CBD against its applicable reference arm, Lexaria also intends to measure the drug concentrations of semaglutide and CBD in the brain to determine if the DehydraTECH technology enhances brain biodistribution as it has evidenced in previous animal studies with DehydraTECH-CBD and DehydraTECH-semaglutide compositions, which it believes to be beneficial therapeutically.

Results from this study are anticipated to be released during the fourth quarter of fiscal year 2026.

Animal Study #2 (GLP-1-A26-2)

During the quarter ended May 31, 2026, Lexaria engaged its CRO and commenced the single dose treatment regimen of the animals with DehydraTECH-enhanced retatrutide and amycretin with the expectation of completing between 14 to 18 different arms of dosing to determine formulation optimization.

This will be the first investigation of DehydraTECH with retatrutide and amycretin with the study arms also comparing PK performance of test articles administered both endoscopically in the intestine as compared to being swallowed, thus targeting the stomach.

On June 9, 2026, Lexaria announced that dosing had been completed in Animal Study #2.

Results from this study are anticipated to be released during the fourth quarter of fiscal year 2026.

Long Term Stability Testing

Lexaria also routinely studies the chemical and microbiological purity and stability of select DehydraTECH compositions that it has prepared for its animal and human studies over an extended duration of 6-12 months.

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.

Along with improved tolerability, PK and efficacy performance, long term stability is crucial if oral variants of GLP-1, GIP and glucagon 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.

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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 is attending to its annual reporting update obligations to the FDA 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.

Since that time, Lexaria continues to attend to its annual reporting update obligations to the FDA 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”).

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

Of note, DehydraTECH-CBD was evaluated recently in Lexaria’s Australian clinical study GLP-1-H24-4, with findings announced in December 2025, in overweight or obese, or pre- and Type II diabetic participants.

It was noteworthy therein that the DehydraTECH-CBD arm achieved meaningful reductions in blood pressure supportive of the Company’s hypertension treatment interests, even though study GLP-1-H24-4 was pursued to assess formulations for distinct potential therapeutic use in the fields of diabetes and weight loss management.

Of note, DehydraTECH-CBD was evaluated recently in Lexaria (AU) Pty Ltd’s Australian clinical study GLP-1-H24-4, with findings announced in December 2025, in overweight or obese, or pre- and Type II diabetic participants.

It was noteworthy therein that the DehydraTECH-CBD arm achieved meaningful reductions in blood pressure supportive of hypertension treatment interests, even though study GLP-1-H24-4 was pursued to assess formulations for distinct potential therapeutic use in the fields of diabetes and weight loss management.

At week 4 of treatment in study GLP-1-H24-4, a mean change of −4.6 mmHg in systolic blood pressure and −4.0 mmHg in diastolic blood pressure was evidenced in the DehydraTECH-CBD arm.

Blood pressure reductions were also evident in this arm following completion of treatment at the week 16 follow up point (4 weeks after cessation of treatment) with a mean change of −2.6 mmHg in systolic blood pressure and −3.0 mmHg in diastolic blood pressure reported.

FY26 Research and Development Program

The Company’s 2026 research and development program is designed to broaden pharmaceutical, intellectual property, and business development opportunities through new and improved formulations.

It includes the following:

A five-week parallel group human study consisting of three different arms with primary goals of establishing safety and tolerability, as well as pharmacokinetic evaluation, comparing salcaprozate sodium (“SNAC”)-inclusive DehydraTECH-semaglutide tablet and capsule formulations to the recently launched, commercially available Wegovy ® semaglutide tablets under fasted pre-dose conditions.

Animal studies designed to establish scientific evidence supporting new concepts, procedures and formulations intended to facilitate the development of new intellectual property through the development and filing of patent applications;

and to test wide varieties of conditions and formulations to narrow down choices prior to potential future corroborating human study work.

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, 2025 and none have been identified for the six months ended February 28, 2026.

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 nine months ended May 31, 2026.

Funding Requirements

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As we move forward with our planned R&D studies, we anticipate that we will continue to incur operating losses and negative cash flows for the foreseeable future covering 2026 and beyond.

Through February 28, 2026, 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 $3,050,235 and $5,423,600 for the six months ended February 28, 2026, and February 28, 2025, respectively.

During the six months ended February 28, 2026, we raised $6.5 million in net proceeds from the sale of securities pursuant to our Registered Direct offerings which closed in September, 2025 and December, 2025.

Through May 31, 2026, 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 $5,043,216 and $9,214,206 for the nine months ended May 31, 2026, and May 31, 2025, respectively.

During the nine months ended May 31, 2026, we raised $6.5 million in net proceeds from the sale of securities pursuant to our Registered Direct offerings which closed in September, 2025 and December, 2025.

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

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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 February 28, 2026, and February 28, 2025

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

Results of Operations for the Period Ended May 31, 2026, and May 31, 2025

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

Cost of goods sold

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$ (9,214,206 )

Fees from intellectual property licensing and B2B sales totaled $20,000 and $357,923, respectively, for the six-month periods ended February 28, 2026 and February 28, 2025.

For the six months ended February 28, 2026, relative to the six months ended February 28, 2025, license fees and B2B sales decreased by $328,000 and $9,923, respectively, reflecting the expiration of the Premier Anti-Aging Co., Ltd.

Fees from intellectual property licensing and B2B sales totaled $20,000 and $531,923, respectively, for the nine-month periods ended May 31, 2026 and May 31, 2025.

For the nine months ended May 31, 2026, relative to the nine months ended May 31, 2025, license fees and B2B sales decreased by $502,000 and $9,923, respectively, reflecting the expiration of the Premier Anti-Aging Co., Ltd.

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 six months ended February 28, 2026 or the six months ended February 28, 2025.

The Company did not recognize any other revenue during the nine months ended May 31, 2026 or the nine months ended May 31, 2025.

Research and Development

Expenditures on R&D decreased by $2,492,408 year-over-year for the six-month period ended February 28, 2026, as we completed our Phase 1b Clinical Trial (GLP-1-H24-4) in December of 2025.

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.

Expenditures on R&D decreased by $4,239,075 year-over-year for the nine-month period ended May 31, 2026, as we completed our Phase 1b Clinical Trial (GLP-1-H24-4) in December of 2025.

Lexaria continues with applied research & development 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, 2026, consulting fees and salaries decreased by $45,806 year-over-year, primarily due to lower stock-based compensation ($116,744) and the discontinuation of certain consulting arrangements ($134,182);

In the nine months ended May 31, 2026, consulting fees and salaries decreased by $502,388 year-over-year, primarily due to lower stock-based compensation ($494,037) and the discontinuation of certain consulting arrangements ($120,335);

partially offset by higher incentive compensation ($131,071) and salary adjustments ($74,150) .

Legal and Professional Fees

Our legal and professional fees increased by $126,005 during the six months ended February 28, 2026 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.

Our legal and professional fees increased by $211,573 during the nine months ended May 31, 2026 as compared to the same prior year period due to higher accounting and professional fees associated with registration statement filings, financing activities and utilization of patent-related legal services.

General and Administrative

Our other general and administrative expenses decreased in total by $339,179 during the six-month period ended February 28, 2026, as compared to the same prior year period.

Our other general and administrative expenses decreased in total by $152,115 during the nine-month period ended May 31, 2026, as compared to the same prior year period.

The decrease is primarily attributable to lower spending on advertising and promotions ($108,661) and decreased impairment losses ($33,540).

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$ (4,782,990 )

$ (7,807,889 )

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 $3.1 million for the six months ended February 28, 2026, compared with $4.2 million during the same prior year period.

The decrease is attributable to a decrease of $2.4 million in our net loss, partially offset by an increase in operating assets and liabilities of $1.2 million as we completed Study GLP-1-H24-4, and a decrease of $0.1 million in non-cash expenses.

Net cash used in operating activities was approximately $4.8 million for the nine months ended May 31, 2026, compared with $7.8 million during the same prior year period.

The decrease is attributable to a decrease of $4.2 million in our net loss, partially offset by a decrease in operating assets and liabilities of $0.6 million as we completed Study GLP-1-H24-4, and a decrease of $0.5 million in non-cash expenses.

Investing Activities

Net cash used in investing activities was $59,008 for the six months ended February 28, 2026, compared to $65,698 for the same prior year period.

Net cash used in investing activities was $86,097 for the nine months ended May 31, 2026, compared to $85,141 for the same prior year period.

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

Financing Activities

Net cash from financing activities was approximately $6.5 million for the six months ended February 28, 2026, compared to approximately $4.4 million for the same prior year period.

Net cash from financing activities was approximately $6.5 million for the nine months ended May 31, 2026, compared to approximately $6.0 million for the same prior year period.

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

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

Net losses attributable to shareholders were $3.0 million and $5.4 million for the six months ended February 28, 2026, and February 28, 2025, respectively.

As of February 28, 2026, we had an accumulated deficit of $66.5 million.

Net losses attributable to shareholders were $5.0 million and $9.2 million for the nine months ended May 31, 2026, and May 31, 2025, respectively.

As of May 31, 2026, we had an accumulated deficit of $68.5 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, 2026, the Company has completed the following:

During the nine months ended May 31, 2026, 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 $3.5 million, respectively.

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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, 2026, the Company had cash and cash equivalents of approximately $5.1 million to settle $0.2 million in current liabilities.

As of May 31, 2026, the Company had cash and cash equivalents of approximately $3.5 million to settle $0.4 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 first quarter of fiscal year 2027.

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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, 2026 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, 2026 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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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