lxrp_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 31, 2024

☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from [ ] to [ ]

Commission file number 000-52138

LEXARIA BIOSCIENCE CORP.

(Exact name of registrant as specified in its charter)

Nevada		20-2000871
(State or other jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

#100 – 740 McCurdy Road, Kelowna BC Canada		V1X 2P7
(Address of principal executive offices)		(Zip Code)

Registrant’s Telephone number, including area code: 1.250.765.6424

Securities registered pursuant to Section 12(b) of the Act:

Title of Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Par Value $0.001	LEXX	The NASDAQ Capital Market
Warrants	LEXXW	The NASDAQ Capital Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the last 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by a check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date.

15,810,205 common shares as of July 12, 2024

DOCUMENTS INCORPORATED BY REFERENCE

None.

TABLE OF CONTENTS

PART I—FINANCIAL INFORMATION		3

Item 1. Financial Statements		3

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		21

Item 3. Controls and Procedures.		31

PART II—OTHER INFORMATION		32

Item 1. Legal Proceedings		32

Item 1A. Risk Factors		32

Item 2. 10b5-1 Trading Plans.		32

Item 3. Exhibits, Financial Statement Schedules		33

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

LEXARIA BIOSCIENCE CORP.

CONSOLIDATED BALANCE SHEETS

(Expressed in US Dollars except shares amount)

(Unaudited)

	May 31,			August 31,
	2024			2023
ASSETS
Current
Cash	$	8,459,081		$	1,352,102
Marketable securities		46,307			125,642
Accounts receivable		208,445			126,686
Prepaid expenses and other current assets		379,546			546,783
Total Current Assets		9,093,379			2,151,213

Non-current assets, net
Long-term receivables		63,575			48,559
Right of use assets		143,316			167,446
Intellectual property, net		498,878			462,625
Property & equipment, net		219,289			254,143
Total Non-current Assets		925,058			932,773

TOTAL ASSETS	$	10,018,437		$	3,083,986

LIABILITIES and STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities	$	128,788		$	239,941
Lease liability, current		27,260			27,794
Total Current Liabilities		156,048			267,735

Lease liabilities - non-current		115,327			136,173

TOTAL LIABILITIES	$	271,375		$	403,908

Stockholders' Equity
Share Capital
Authorized: 220,000,000 common voting shares with a par value of $0.001 per share
Common shares issued and outstanding: 15,810,205 and 8,091,650 at May 31, 2024, and August 31, 2023, respectively.	$	15,810		$	8,091
Additional paid-in capital		59,502,668			48,799,454
Accumulated deficit		(49,373,982	)		(45,763,427	)
Accumulated other comprehensive loss		(21,866	)		-
Equity attributable to shareholders of Lexaria		10,122,630			3,044,118
Non-controlling interest		(375,568	)		(364,040	)
Total Stockholders' Equity		9,747,062			2,680,078
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	10,018,437		$	3,083,986

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

Table of Contents

LEXARIA BIOSCIENCE CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Expressed in US Dollars except share amounts)
(Unaudited)

	Three Months Ended						Nine Months Ended
	May 31,			May 31,			May 31,			May 31,
	2024			2023			2024			2023

Revenue	$	84,000		$	77,707		$	380,278		$	195,467
Cost of goods sold		-			12,747			4,822			31,500
Gross profit		84,000			64,960			375,456			163,967

Operating expenses
Research and development		573,089			1,640,648			1,393,359			3,166,315
General and administrative		1,253,830			825,177			2,532,163			2,417,561
Total operating expenses		1,826,919			2,465,825			3,925,522			5,583,876

Loss from operations		(1,742,919	)		(2,400,865	)		(3,550,066	)		(5,419,909	)

Other income (loss)
Interest income		-			15,443			7,318			34,174
Unrealized gain (loss) on marketable securities		(41,393	)		1,856			(79,335	)		(77,775	)
Total other income (loss)		(41,393	)		17,299			(72,017	)		(43,601	)

Net loss	$	(1,784,312	)	$	(2,383,566	)	$	(3,622,083	)	$	(5,463,510	)
Less: Net loss attributable to non-controlling interest		(2,619	)		(12,061	)		(11,528	)		(37,930	)
Net loss attributable to Lexaria shareholders	$	(1,781,693	)	$	(2,371,505	)	$	(3,610,555	)	$	(5,425,580	)

Other comprehensive income
Foreign currency translation adjustment		(1,240	)		-			(21,866	)		-
Total comprehensive loss	$	(1,782,933	)	$	(2,371,505	)	$	(3,632,421	)	$	(5,425,580	)
Basic and diluted loss per share		(0.13	)		(0.37	)		(0.32	)		(0.89	)

Weighted average number of common shares outstanding
- Basic and diluted		13,855,202			6,440,998			11,274,845			6,116,126

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

Table of Contents

LEXARIA BIOSCIENCE CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended May 31, 2024 and 2023
(Expressed in US Dollars)
(Unaudited)

	May 31,			May 31,
	2024			2023
Cash flows used in operating activities
Net loss	$	(3,622,083	)	$	(5,463,510	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation		395,726			160,748
Depreciation and amortization		59,783			74,469
Impairment loss		57,836			-
Noncash lease expense		24,130			30,882
Unrealized loss on marketable securities		79,335			77,775
Lease accretion		5,501			1,961
Change in operating assets and liabilites
Accounts receivable		(81,759	)		29,500
Inventory		-			43,069
Prepaid expenses and deposits		167,237			(52,979	)
Accounts payable and accrued liabilities		(111,153	)		872,138
Operating lease liability		(26,881	)		(33,610	)
Long-term receivables		(15,016	)		-
Net cash used in operating activities	$	(3,067,344	)	$	(4,259,557	)

Cash flows used in investing activities
Additions in intellectual property		(119,018	)		(67,425	)
Purchase of equipment		-			(33,748	)
Net cash used in investing activities	$	(119,018	)	$	(101,173	)

Cash flows from financing activities
Proceeds from shares sold for cash		4,208,731			1,711,418
Proceeds from exercise of stock options and warrants		6,106,476			-
Net cash from financing activities	$	10,315,207		$	1,711,418

Effect of exchange rate changes on cash		(21,866	)		-
Net change in cash for the period		7,106,979			(2,649,312	)
Cash at beginning of period		1,352,102			5,813,218
Cash at end of period	$	8,459,081		$	3,163,906

Supplemental information of cash flows:
Income taxes paid in cash	$	-		$	8,214
Remeasurement of operating lease right of use assets and liabilities	$	-		$	156,565

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

Table of Contents

LEXARIA BIOSCIENCE CORP.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Nine Months Ended May 31, 2024, and 2023
(Expressed in US Dollars except share amounts)
(Unaudited)

										Accumulated
	Common Stock				Additional Paid-in					Other Comprehensive			Non-controlling			Stockholders'
	Shares		Amount		Capital		Deficit			Income (Loss)			Interest			Equity

Balance August 31, 2023		8,091,650	$	8,091	$	48,799,454	$	(45,763,427	)		-		$	(364,040	)	$	2,680,078
Stock issued in equity offering		889,272		889		1,246,829		-			-			-			1,247,718
Stock issued from exercise of warrants		1,330,719		1,331		570,320		-			-			-			571,651
Foreign currency translation adjustment		-		-		-		-			4,372			-			4,372
Stock based compensation		-		-		53,953		-			-			-			53,953
Net loss		-		-		-		(1,179,323	)		-			-			(1,179,323	)
Non-controlling interest		-		-		-		-			-			(5,715	)		(5,715	)
Balance November 30, 2023		10,311,641	$	10,311	$	50,670,556	$	(46,942,750	)	$	4,372		$	(369,755	)	$	3,372,734
Stock issued in equity offering		1,444,741		1,445		2,959,568		-			-			-			2,961,013
Stock issued from exercise of warrants		631,291		632		491,192		-			-			-			491,824
Foreign currency translation adjustment		-		-		-		-			(24,998	)		-			(24,998	)
Net loss		-		-		-		(649,539	)		-			-			(649,539	)
Non-controlling interest		-		-		-		-			-			(3,194	)		(3,194	)
Balance February 29, 2024		12,387,673		12,388		54,121,316		(47,592,289	)		(20,626	)		(372,949	)		6,147,840
Stock issued from exercise of warrants		3,420,032		3,420		5,036,707		-			-			-			5,040,127
Stock issued from exercise of options		2,500		2		2,872		-			-			-			2,874
Foreign currency translation adjustment		-		-		-		-			(1,240	)		-			(1,240	)
Stock based compensation		-		-		341,773		-			-			-			341,773
Net loss		-		-		-		(1,781,693	)		-			-			(1,781,693	)
Non-controlling interest		-		-		-		-			-			(2,619	)		(2,619	)
Balance May 31, 2024		15,810,205		15,810		59,502,668		(49,373,982	)		(21,866	)		(375,568	)		9,747,062

Balance August 31, 2022		5,950,998	$	5,951	$	47,041,481	$	(39,098,528	)	$	-		$	(316,414	)	$	7,632,490
Stock based compensation		-		-		68,776		-			-			-			68,776
Net loss		-		-		-		(1,755,944	)		-			-			(1,755,944	)
Non-controlling interest		-		-		-		-			-			(13,362	)		(13,362	)
Balance November 30, 2022		5,950,998	$	5,951	$	47,110,257	$	(40,854,472	)	$	-		$	(329,776	)	$	5,931,960
Shares issued for services		-		-		10,526		-			-			-			10,526
Net loss		-		-		-		(1,298,131	)		-			-			(1,298,131	)
Non-controlling interest		-		-		-		-			-			(12,507	)		(12,507	)
Balance February 28, 2023		5,950,998	$	5,951	$	47,120,783	$	(42,152,603	)	$	-		$	(342,283	)	$	4,631,848
At The Market financing		34,652		34		110,987		-

SEC Form 10-Q filed by Lexaria Bioscience Corp.