Lexaria Bioscience Corp.LEXXEarnings & Financial Report
Nasdaq · Health Care · Pharmaceutical Preparations
Lexaria Bioscience Corp is a global biotechnology firm specializing in innovative drug delivery technologies. Its patented DehydraTECH platform enhances the bioavailability, absorption speed, and efficacy of active pharmaceutical ingredients, cannabinoids, and nutraceutical compounds, serving healthcare, wellness, and pharmaceutical sectors primarily across North America and Europe.
What changed in Lexaria Bioscience Corp.'s 10-K — 2023 vs 2024
Top changes in Lexaria Bioscience Corp.'s 2024 10-K
204 paragraphs added · 212 removed · 109 edited across 4 sections
- Item 1. Business+104 / −111 · 48 edited
- Item 7. Management's Discussion & Analysis+68 / −55 · 33 edited
- Item 1A. Risk Factors+27 / −33 · 24 edited
- Item 5. Market for Registrant's Common Equity+5 / −13 · 4 edited
Item 1. Business
Business — how the company describes what it does
48 edited+56 added−63 removed43 unchanged
Item 1. Business
Business — how the company describes what it does
48 edited+56 added−63 removed43 unchanged
2023 filing
2024 filing
DehydraTECH can be implemented in a multitude of ingestible or topically administered product formats including foods, beverages, oral suspensions, tablets, capsules, creams, lotions, and skin patches. It is suitable for use with a variety of product formats including pharmaceuticals, nutraceuticals, over-the-counter products, and consumer packaged goods.
DehydraTECH can be implemented in a multitude of ingestible or topically administered product formats including oral suspensions, tablets, capsules, foods, beverages, creams, lotions, and skin patches. It is suitable for use with a variety of product formats including pharmaceuticals, nutraceuticals, over-the-counter products, and consumer packaged goods.
Intellectual Property Lexaria’s involvement with the foundational technology to DehydraTECH dates back to 2014 when it entered into a strategic relationship with Poppy’s Teas LLC, and the original inventors of DehydraTECH, who had filed two initial US provisional patent applications for the technology.
Intellectual Property Lexaria’s involvement with the foundational technology of DehydraTECH dates back to 2014 when it entered into a strategic relationship with Poppy’s Teas LLC, and the original inventors of DehydraTECH, who had filed two initial US provisional patent applications for the technology.
The Company currently has several applications pending worldwide and due to the complexity of pursuing patent protection, the quantity of patent applications will vary continuously as each application advances or stalls. We continue to investigate national and international opportunities to investigate expansions and additions to our intellectual property portfolio.
The Company currently has several applications pending worldwide and, due to the complexity of pursuing patent protection, the quantity of patent applications will vary continuously as each application advances or stalls. We continue to investigate national and international opportunities to pursue expansions and additions to our intellectual property portfolio.
As at the fiscal year ended August 31, 2023, Lexaria Nutraceutical Corp. had the following active licenses: · Non-exclusive license with Bevnology LLC for various non-pharmaceutical product formats in the US; · Exclusive, world-wide, perpetual and sublicenseable license with SulfoSyn Limited for the use of DehydraTECH with the molecule sulforaphane; Competition The biopharmaceutical industry is characterized by intense competition and rapid innovation.
As at the fiscal year ended August 31, 2024, Lexaria Nutraceutical Corp. had the following active licenses: · Non-exclusive license with Bevnology LLC for various non-pharmaceutical product formats in the US; · Exclusive, world-wide, perpetual and sublicenseable license with SulfoSyn Limited for the use of DehydraTECH with the molecule sulforaphane; Competition The biopharmaceutical industry is characterized by intense competition and rapid innovation.
Altria Ventures Inc. owns a 16.667% equity interest along with certain other rights in Lexaria Nicotine LLC. Available Information Lexaria’s common stock is quoted on the Nasdaq under the symbol “LEXX” and certain warrants are quoted under LEXXW. We file annual, quarterly, and current reports, proxy statements and other information with the U.S. Securities Exchange Commission (the “SEC”).
Altria Ventures Inc. owns a 16.667% equity interest along with certain other rights in Lexaria Nicotine LLC. Available Information Lexaria’s common stock is quoted on the Nasdaq under the symbol “LEXX” and certain warrants are quoted under “LEXXW”. We file annual, quarterly, and current reports, proxy statements and other information with the U.S. Securities Exchange Commission (the “SEC”).
Our Company relies on the business and technical experience of our existing management, on the technical abilities of consulting experts, and on the technical and operational abilities of its operating partner companies to identify and evaluate business opportunities. We currently have five full time salaried employees under contract and may add personnel to expand our internal R&D capacity.
Our Company relies on the business and technical experience of our existing management, on the technical abilities of consulting experts, and on the technical and operational abilities of its operating partner companies to identify and evaluate business opportunities. We currently have seven full-time salaried employees under contract and may add personnel to expand our internal R&D capacity.
Lexaria Nicotine LLC, (16.667% owned by Altria Ventures Inc.) holds the exclusive rights to the use or sublicense of DehydraTECH with nicotine molecules. As at the fiscal year ended August 31, 2023, Lexaria Nicotine LLC has one perpetual non-exclusive global license issued to Altria Client Services LLC for DehydraTECH-Nicotine.
Lexaria Nicotine LLC, (16.667% owned by Altria Ventures Inc.) holds the exclusive rights to the use or sublicense of DehydraTECH with nicotine molecules. As at the fiscal year ended August 31, 2024, Lexaria Nicotine LLC has one perpetual non-exclusive global license issued to Altria Client Services LLC for DehydraTECH-Nicotine.
As of the fiscal year ended August 31, 2023 LEXX Pharma had the following active licenses: · Non-exclusive license with AnodGen Bioceutical for pharmaceutical and medical product applications incorporating DehydraTECH-infused psychoactive cannabinoid powders and medical product applications incorporating DehydraTECH-infused non-psychoactive cannabinoid powders within Europe including the UK, Australia and New Zealand.
As of the fiscal year ended August 31, 2024 LEXX Pharma had the following active licenses: · Non-exclusive license with AnodGen Bioceutical for pharmaceutical and medical product applications incorporating DehydraTECH-infused psychoactive cannabinoid powders and medical product applications incorporating DehydraTECH-infused non-psychoactive cannabinoid powders within Europe including the UK, Australia and New Zealand.
Since our first patent grant in 2017 for DehydraTECH, we have continued to pursue patent applications internationally in regions that are considered to have the highest commercial potential and, to date, have been allowed/granted 37 patents worldwide as of the date of this filing.
Since our first patent grant in 2017 for DehydraTECH, we have continued to pursue patent applications internationally in regions that are considered to have the highest commercial potential and, to date, have been allowed/granted 46 patents worldwide as of the date of this filing.
We make available free of charge on https://www.lexariabioscience.com/investors/regulatory-filings/ our annual, quarterly, and current reports, and amendments to those reports if any, as soon as reasonably practical after we electronically file such material with, or furnish it to, the SEC. Further details on our research programs are provided in our 2022 and 2023 Form 10-K filings.
We make available free of charge on https://www.lexariabioscience.com/investors/regulatory-filings/ our annual, quarterly, and current reports, and amendments to those reports if any, as soon as reasonably practical after we electronically file such material with, or furnish it to, the SEC. Further details on our research programs are provided in our 2023 and 2024 Form 10-K and Form 10-Q filings.
As at the fiscal year ended August 31, 2023, Lexaria Hemp Corp. had the following active licenses: · Non-exclusive license with Hill Inc. for all product formats globally; · Non-exclusive license with Boldt Runners Corporation for oral pouch and oral mulch products in the US, South Africa, Europe and Japan; · Non-exclusive license with Cannfections Group Inc. for chocolates and candy in Canada; · Non-exclusive license with Bevnology LLC for all product formats globally excluding Japan, Korea and China; · Exclusive perpetual license (other than the rights held by Hill Inc. and Boldt Runners Corporation) with Premier Anti-Aging Co.
As at the fiscal year ended August 31, 2024, Lexaria Hemp Corp. had the following active licenses: · Non-exclusive license with Hill Inc. for all product formats globally; · Non-exclusive license with Boldt Runners Corporation for oral pouch and oral mulch products in the US, South Africa and Japan; · Non-exclusive license with Cannfections Group Inc. for chocolates and candy in Canada; · Non-exclusive license with Bevnology LLC for all product formats globally excluding Japan, Korea and China; · Non-exclusive license (other than the rights held by Hill Inc. and Boldt Runners Corporation) with Premier Anti-Aging Co.
None of our employees are represented by a labor union and we consider our employee relations to be good. We outsource virtually all analytical work to independent third-party laboratories located in the USA, Canada, and Europe. 12 Table of Contents Our executive personnel are entitled to incentives as set by our Compensation Committee.
None of our employees are represented by a labor union and we consider our employee relations to be good. We outsource virtually all analytical work to independent third-party laboratories located in the USA, Canada, and Europe. Our executive personnel are entitled to incentives as set by our Compensation Committee.
Recently achieved successful results from HYPER-H21-4 study along with the historical results from its HYPER-H21-3, HYPER-H21-3, HYPER-H21-1 and our 2018 human clinical study, along with a number of successful animal studies demonstrating pharmacokinetic (“PK”) performance; and the molecular characterization work completed through Canada’s National Research Council, have together established a strong body of evidence for Lexaria’s DehydraTECH-CBD.
The successful results from HYPER-H21-4, HYPER-H21-3, HYPER-H21-3, HYPER-H21-1 and our 2018 human clinical study, along with a number of successful animal studies demonstrating pharmacokinetic (“PK”) performance; and the molecular characterization work completed through Canada’s National Research Council, have together established a strong body of evidence for Lexaria’s DehydraTECH-CBD.
Due to the inherent unpredictability of scientific discovery, it is not possible to predict if or how often such new applications might be filed or patents issued. Below we summarize Lexaria’s allowed/granted patents.
Due to the inherent unpredictability of scientific discovery, it is not possible to predict if or how often such new applications might be filed or patents issued. 5 Table of Contents Below we summarize Lexaria’s allowed/granted patents.
Our competitors, either alone or with collaborative partners, may succeed in developing, acquiring, or licensing API delivery technologies that are more effective, safer, more easily commercialized or less costly than DehydraTECH. Competition in alternative health sectors and consumer products in the U.S. is fierce.
Our competitors, either alone or with collaborative partners, may succeed in developing, acquiring, or licensing API delivery technologies that are more effective, safer, more easily commercialized or less costly than DehydraTECH. 13 Table of Contents Competition in alternative health sectors and consumer products in the U.S. is fierce.
Subsidiaries Lexaria Bioscience Corp. has the following wholly owned subsidiaries; · Lexaria CanPharm ULC (which is wholly-owned by Lexaria CanPharm Holding Corp.), · Lexaria CanPharm Holding Corp., · Poviva Corp., · Lexaria Hemp Corp., · Kelowna Management Services Corp., · Lexaria Nutraceutical Corp. and · Lexaria Pharmaceutical Corp., and our majority owned (83.333 . %) subsidiary Lexaria Nicotine LLC.
Subsidiaries Lexaria Bioscience Corp. has the following wholly owned subsidiaries: · Lexaria CanPharm ULC (which is wholly-owned by Lexaria CanPharm Holding Corp.), · Lexaria CanPharm Holding Corp., · Poviva Corp., · Lexaria Hemp Corp., · Kelowna Management Services Corp., · Lexaria Nutraceutical Corp., · Lexaria Pharmaceutical Corp., and · Lexaria (AU) Pty Ltd. and our majority owned (83.333 . %) subsidiary Lexaria Nicotine LLC.
It is in our best interests 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 into specific avenues that offer the most reward.
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.
DehydraTECH is only licensed to those companies that have met and comply with state regulations for the sale and distribution of cannabis related products in their licensed operating territories. DehydraTECH has applications in completely separate sectors such as vitamins, CBD for applications under pursuit for medical applications registered with the FDA, and nicotine.
DehydraTECH is only licensed to those companies that have met and comply with state regulations for the sale and distribution of cannabis related products in their licensed operating territories. 14 Table of Contents DehydraTECH has applications in completely separate sectors such as GLP-1/GIP drugs, vitamins, CBD for applications under pursuit for medical applications registered with the FDA, and nicotine.
Lexaria believes DehydraTECH offers a host of benefits beyond what competing technologies can offer, including superior oral palatability, a more appealing and all-natural ingredient compositional profile from an oral product and beverage formulation perspective, more predictable time of delivery into bloodstream and certain target tissues, and superior scalability and cost effectiveness from a manufacturing perspective.
Lexaria believes DehydraTECH offers a host of benefits beyond what competing technologies can offer, including enhanced pharmacokinetic performance of APIs into the bloodstream and into brain tissue, reduced adverse reactions, superior oral palatability, a more appealing and all-natural ingredient compositional profile from an oral product and beverage formulation perspective, more predictable time of delivery into bloodstream and certain target tissues, and superior scalability and cost effectiveness from a manufacturing perspective.
The pending and granted patents also cover the manufacturing and processing methods used to combine fatty acids with active pharmaceutical ingredients. This includes heating and drying methods and use of excipients and substrates.
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. This includes heating and drying methods and use of excipients and substrates.
Licencing Lexaria has strategically structured its organization to obtain the most value from its DehydraTECH patented technology and has provided its subsidiary companies with exclusive rights to use DehydraTECH or sublicense DehydraTECH with specific molecules, namely, THC, CBD, Nicotine, and all other molecules.
Licensing Lexaria has strategically structured its organization to obtain the most value from its DehydraTECH patented technology and has provided its subsidiary companies with exclusive rights to use DehydraTECH or sublicense DehydraTECH with specific molecules, namely, CBD, Nicotine, and all other molecules for solely nutraceutical products and all molecules, other than nicotine, for pharmaceutical products.
The results of this study significantly influenced the direction of Lexaria’s research and development of its DehydraTECH technology and led to four subsequent human trial studies, with our most recent study HYPER-H21-4 being completed during the fiscal year and resulting in seven (7) peer reviewed publications Antihypertensive effects of CBD are mediated by altered inflammatory response: A sub-study of HYPER-H21-4 trial , Journal of Functional Foods; Chronic effects of oral cannabidiol delivery on 24h ambulatory blood pressure in patients with hypertension (HYPER-H21-4): a randomized, placebo-controlled, and crossover study , Cannabis and Cannabinoid Research; Chronic Effects of Effective Oral Cannabidiol Delivery on 24-h Ambulatory Blood Pressure and Vascular Outcomes in Treated and Untreated Hypertension (HYPER-H21-4): Study Protocol for a Randomized, Placebo-Controlled, and Crossover Study Journal of Personalized Medicine; CBD supplementation reduces arterial blood pressure via modulation of the sympatho-chromaffin system: A substudy from the HYPER-H21-4 trial , Biomedicine & Pharmacotherapy; Effects of CBD supplementation on ambulatory blood pressure and serum urotensin-II concentrations in Caucasian patients with essential hypertension: A sub-analysis of the HYPER-H21-4 trial , Biomedicine & Pharmacotherapy; The Influence of Oral Cannabidiol on 24-h Ambulatory Blood Pressure and Arterial Stiffness in Untreated Hypertension: A Double-Blind, Placebo-Controlled Cross-Over Pilot Study, Advances in Therapy; and Differences in Plasma Cannabidiol Concentrations in Women and Men: A Randomized, Placebo-Controlled, Crossover Study , International Journal of Molecular Sciences.
The results of this study significantly influenced the direction of Lexaria’s research and development of its DehydraTECH technology and led to four subsequent human trial studies in the hypertension field, including study HYPER-H21-1 which resulted in the publication of Trial of a Novel Oral Cannabinoid Formulation in Patients with Hypertension: A Double-Blind, Placebo-Controlled Pharmacogenetic Study , Pharmaceuticals and study HYPER-H21-4 resulting in seven (7) peer reviewed publications Antihypertensive effects of CBD are mediated by altered inflammatory response: A sub-study of HYPER-H21-4 trial , Journal of Functional Foods; Chronic effects of oral cannabidiol delivery on 24h ambulatory blood pressure in patients with hypertension (HYPER-H21-4): a randomized, placebo-controlled, and crossover study , Cannabis and Cannabinoid Research; Chronic Effects of Effective Oral Cannabidiol Delivery on 24-h Ambulatory Blood Pressure and Vascular Outcomes in Treated and Untreated Hypertension (HYPER-H21-4): Study Protocol for a Randomized, Placebo-Controlled, and Crossover Study Journal of Personalized Medicine; CBD supplementation reduces arterial blood pressure via modulation of the sympatho-chromaffin system: A substudy from the HYPER-H21-4 trial , Biomedicine & Pharmacotherapy; Effects of CBD supplementation on ambulatory blood pressure and serum urotensin-II concentrations in Caucasian patients with essential hypertension: A sub-analysis of the HYPER-H21-4 trial , Biomedicine & Pharmacotherapy; The Influence of Oral Cannabidiol on 24-h Ambulatory Blood Pressure and Arterial Stiffness in Untreated Hypertension: A Double-Blind, Placebo-Controlled Cross-Over Pilot Study, Advances in Therapy; and Differences in Plasma Cannabidiol Concentrations in Women and Men: A Randomized, Placebo-Controlled, Crossover Study , International Journal of Molecular Sciences. 8 Table of Contents During fiscal 2024 Lexaria marked significant milestones in investigating and developing DehydraTECH-processed GLP-1 and GIP formulations for investigating the treatment of diabetes and weight loss.
Item 1. Business Company Overview Lexaria Bioscience Corp. is a biotechnology company developing the enhancement of the bioavailability of a broad range of fat-soluble active molecules and active pharmaceutical ingredients (“APIs”) using our patented DehydraTECH TM drug delivery technology.
Item 1. Business Company Overview Lexaria Bioscience Corp. is a biotechnology company dedicated to the enhancement of the bioavailability of a broad range of active pharmaceutical ingredients (“APIs”) using our patented DehydraTECH TM drug delivery-enabling platform technology.
DehydraTECH combines lipophilic molecules or APIs with specific long-chain fatty acids and carrier compounds that improve the way they enter the bloodstream, increasing their effectiveness and allowing for lower overall dosing while promoting healthier oral ingestion methods.
DehydraTECH combines APIs with specific long-chain fatty acid-rich triglyceride oils and carrier compounds that improve the way they enter the bloodstream, increasing their effectiveness and allowing for lower overall dosing for improved tolerability while promoting healthier oral ingestion methods.
Issued Patent # Patent Family US 9,474,725 B1 #1 Food and Beverage Compositions Infused With Lipophilic Active Agents and Methods of Use Thereof US 9,839,612 B2 US 9,972,680 B2 US 9,974,739 B2 US 10,084,044 B2 US 10,103,225 B2 US 10,381,440 US 10,374,036 US 10,756,180 AU 2015274698 AU 2017203054 AU 2018202562 AU 2018202583 AU 2018202584 AU 2018220067 EP 3164141 JP 6920197 CDN 2949369 AU 2016367036 #2 Methods for Formulating Orally Ingestible Compositions Comprising Lipophilic Active Agents JP 6963507 MX 388 203 B AU 2016367037 #3 Stable Ready-to-Drink Beverage Compositions Comprising Lipophilic Active Agents IN 365864 JP 6917310 MX 390001 JP 7232853 CDN 2984917 CDN 3093414 #6 Transdermal and/or Dermal Delivery of Lipophilic Active Agents JP 7112510 #7 Lipophilic Active Agent Infused Compositions with Reduced Food Effect AU 2019256805 #8 Compositions Infused with Nicotine Compounds and Methods of Use Thereof CDN 3096580 CDN 3111082 #14 Lipophilic Active Agent Infused Tobacco Leaves and/or Tobacco Materials and Methods of Use Thereof US 11,311,559 #18 Compositions and Methods for Enhanced Delivery of Antiviral Agents AU 2021261261 US 11,700,875 #20 Compositions and Methods for Sublingual Delivery of Nicotine US 11,666,544 #21 Compositions and Methods for Treating Hypertension US 11,666,543 Patents granted in the year ended August 31, 2023 In fiscal 2023, the Company’s patent portfolio expanded to include three new patent families.
Issued Patent # Patent Certificate Grant Date Patent Family US 9,474,725 B1 10/25/2016 #1 Food and Beverage Compositions Infused With Lipophilic Active Agents and Methods of Use Thereof US 9,839,612 B2 12/12/2017 US 9,972,680 B2 05/15/2018 US 9,974,739 B2 05/22/2018 US 10,084,044 B2 09/25/2018 US 10,103,225 B2 10/16/2018 US 10,381,440 08/13/2019 US 10,374,036 08/06/2019 US 10,756,180 08/25/2020 AU 2015274698 06/15/2017 AU 2017203054 08/30/2018 AU 2018202562 08/30/2018 AU 2018202583 08/30/2018 AU 2018202584 01/10/2019 AU 2018220067 07/30/2019 EP 3164141 11/11/2020 JP 6920197 07/28/2021 CDN 2949369 06/13/2023 6 Table of Contents AU 2016367036 07/30/2019 #2 Methods for Formulating Orally Ingestible Compositions Comprising Lipophilic Active Agents JP 6963507 10/19/2021 MX 388 203 B 11/26/2021 AU 2016367037 08/15/2019 #3 Stable Ready-to-Drink Beverage Compositions Comprising Lipophilic Active Agents IN 365864 04/30/2021 JP 6917310 07/21/2021 MX 390001 02/10/2022 JP 7232853 02/22/2023 CDN 2984917 09/26/2023 CDN 3093414 12/13/2022 #6 Transdermal and/or Dermal Delivery of Lipophilic Active Agents EP 3765088 03/20/2024 JP 7112510 07/26/2022 #7 Lipophilic Active Agent Infused Compositions with Reduced Food Effect AU 2019256805 06/16/2022 #8 Compositions Infused with Nicotine Compounds and Methods of Use Thereof CDN 3096580 05/23/2023 CDN 3111082 08/29/2023 #14 Lipophilic Active Agent Infused Tobacco Leaves and/or Tobacco Materials and Methods of Use Thereof US 11,311,559 04/26/2022 #18 Compositions and Methods for Enhanced Delivery of Antiviral Agents AU 2021261261 03/23/2023 JP 7415045 01/05/2024 CDN 3172889 05/28/2024 US 11,700,875 07/18/2023 #20 Compositions and Methods for Sublingual Delivery of Nicotine CDN 3196911 12/05/2023 US 11,666,544 06/06/2023 #21 Compositions and Methods for Treating Hypertension US 11,666,543 06/06/2023 US 11,980,593 05/14/2024 US 11,931,369 03/19/2024 #24 Compositions and Methods for Treating Epilepsy US 11,944,635 04/02/2024 US 11,986,485 05/21/2024 US 12,023,346 07/02/2024 7 Table of Contents Patents granted in the year ended August 31, 2024 In fiscal 2024, the Company’s patent portfolio expanded to include two new patent families which serves to further protect our exclusivity in the use of DehydraTECH with tobacco leaves and materials and treatment of epilepsy.
Drugs focused on blood pressure and related conditions are some of the best selling drugs in the world. Lipitor™, used to treat high cholesterol and reduce the risk of heart disease, has generated $163 billion in revenue from 1992 until 2021. Plavix™ is used to prevent heart attack and stroke, has sold $84 billion from 1992 until 2017.
Drugs focused on blood pressure and related conditions are some of the best selling drugs in the world. Lipitor™, used to treat high cholesterol and reduce the risk of heart disease, has generated $163 billion in revenue from 1992 (https://www.statista.com/statistics/1089322/top-drugs-by-lifetime-sales-globally/) until 2021. Plavix™ is used to prevent heart attack and stroke, has sold $84 billion from 1992 until 2017 (https://www.forbes.com/sites/simonking/2013/01/28/the-best-selling-drugs-of-all-time-humira-joins-the-elite/).
DehydraTECH is a technology incorporated into the formulation and manufacturing process of new or existing orally ingestible and topical products. The procedure involves fusing the active ingredient as a delivery “payload” together with certain fatty acids and infusing the mixture into a substrate material. Using controlled dehydration processing, it combines the payload and fatty acids together at a molecular level.
DehydraTECH is a technology incorporated into the formulation and manufacturing process of new or existing orally ingestible and topical products. The procedure involves combining the active ingredient as a delivery “payload” together with certain long chain fatty acid-rich triglyceride oils and infusing the mixture into a carrier substrate material.
DehydraTECH can be used with a wide range of active molecules encompassing fat-soluble vitamins, pain medications, hormones, PDE5 inhibitors, antivirals, nicotine and its analogs, and cannabinoids. Our technology can be applied to a variety of therapeutic indications, including hypertension and heart disease, and diabetes.
DehydraTECH can be used with a wide range of active molecules including glucagon-like peptide-1 drugs (“GLP-1”) and glucose -dependent insulinotropic polypeptide drugs (“GIP”), vitamins, pain medications, hormones, phosphodiesterase type 5 (“PDE5”) inhibitors, antivirals, nicotine and its analogs, and cannabinoids. Our technology can be applied to a variety of therapeutic indications, including diabetes, weight loss, hypertension and heart disease.
These technologies can enable exceptional water solubility of ingredients and can impart improved intestinal bio absorption as a result, but do not necessarily offer the breadth of performance and value enhancing benefits that Lexaria’s DehydraTECH technology offers to its licensees. 11 Table of Contents Competition in nicotine, alternative nicotine delivery and nicotine cessation sectors in the U.S. is comprised of long-established entities, brands, and new technologies competing to create less harmful options.
These technologies can enable exceptional water solubility of ingredients and can impart improved intestinal bio absorption as a result, but do not necessarily offer the breadth of performance and value enhancing benefits that Lexaria’s DehydraTECH technology offers to its licensees.
Our current patent portfolio includes patent family applications or grants pertaining to Lexaria’s method of improving bioavailability and taste, and the use of DehydraTECH as a delivery platform, orally or topically, for a wide variety of Active Pharmaceutical Ingredients (“APIs”) encompassing cannabinoids; fat soluble vitamins; NSAIDs pain medications; and nicotine and its analogs.
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; fat soluble vitamins; NSAID pain medications; and nicotine and its analogs.
Other programs include DehydraTECH formulation development and testing with nicotine for oral pouches and prospective nicotine replacement therapy, human hormones, CBD for diabetes, dementia and others. Depending on the number of programs undertaken, R&D budgets are expected to vary significantly.
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 and seizure disorder applications, and others. Depending on the number or complexity of the programs undertaken, R&D budgets are expected to vary significantly.
Competing technologies or products may utilize known delivery formats or entirely new and unforecastable formats. Lexaria has demonstrated through scientific testing that DehydraTECH delivers nicotine rapidly and effectively through oral delivery.
It is also possible that historic delivery methods that have been in use and the familiarity with them may prevent adoption of products utilizing DehydraTECH in alternative delivery formats. Competing technologies or products may utilize known delivery formats or entirely new and unforecastable formats. Lexaria has demonstrated through scientific testing that DehydraTECH delivers nicotine rapidly and effectively through oral delivery.
Valcon has not communicated their intentions or timeline of development of products utilising this license. On July 26, 2023, Lexaria issued its new subsidiary, Lexaria Nutraceutical Corp., an exclusive license to the use of DehydraTECH for all molecules, excluding those associated with nicotine or cannabis, solely in association with non-pharmaceutical products.
Exclusive license with Lexaria (AU) Pty Ltd for the use of DehydraTECH-CBD formulation 2.0, DehydraTECH-semaglutide and DehydraTECH-tirzepatide for pharmaceutical products to treat weight-loss and diabetes in the territory of Australia On July 26, 2023, Lexaria issued its subsidiary, Lexaria Nutraceutical Corp., an exclusive license to the use of DehydraTECH for all molecules, excluding those associated with nicotine or cannabis, solely in association with non-pharmaceutical products.
Lexaria’s new IND-enabling program is made possible through successfully completed studies that have provided support for more ambitious commercial goals.
This abbreviated pathway typically enables a quicker route to commercial approval than a traditional 505(b)(1) NDA pathway. Lexaria’s IND-enabling program is made possible through successfully completed studies that have provided support for more ambitious commercial goals.
Hypertension, valued at $20.5 billion in 2021 and expected to reach $39.5 billion by 2030, is one subset of the broader cardiovascular disease category, which is estimated as a $82.5 billion market in 2023. 8 Table of Contents Lexaria is determined to fill the need for a safe, effective, tolerable treatment for hypertension and have a meaningful impact on comorbidity-related costs and deaths with our DehydraTECH-CBD.
Lexaria is determined to fill the need for a safe, effective, tolerable treatment for hypertension and have a meaningful impact on comorbidity-related costs and deaths with our DehydraTECH-CBD.
The license for the Japanese market is perpetual assuming that Premier submits all required payments. In addition to the minimum payments, Lexaria will also receive royalty revenue from DehydraTECH licensed product sales under the agreed terms. Lexaria Pharmaceutical Corp.
The amended license required quarterly payments of US$84,000 until August 31, 2024 and thereafter quarterly payments of US$174,000 until the end of the term. In addition to the minimum payments, Lexaria will also receive royalty revenue from DehydraTECH licensed product sales under the agreed terms. Lexaria Pharmaceutical Corp.
The Company has developed extensive experience from the formulation and production of its demonstration products, in various formats, that enables us to provide expert advice to our licensees with the integration of DehydraTECH in their products for the purpose of providing a more palatable and efficient delivery of bioactive molecules. Lexaria supports our licensee’s products with our technology.
DehydraTECH formulations have been found in some cases to reduce the need for unwanted sweeteners or chemical masking agents used for flavor- and odor-blocking for palatability enhancement purposes, allowing manufacturers to create low-sugar products with fewer calories and artificial sweeteners. 4 Table of Contents The Company has developed extensive experience from the formulation and production of its demonstration products, in various formats, that enables it to provide expert advice to our licensees on the integration of DehydraTECH in their products for the purpose of providing more palatable and efficient delivery of bioactive molecules.
A part of our business plan is to encourage new and existing participants to license and utilize DehydraTECH to enable enhanced performance of their products. These products cross a wide range of lipophilic bioactive molecules including nicotine and cannabidiol (“CBD”) with additional molecules of interest continually being evaluated.
Lexaria supports our licensee’s products with our technology. A part of our business plan is to encourage new and existing industry participants to license and utilize DehydraTECH to enable enhanced performance of their developmental and commercial stage products.
These include, but are not limited to, ongoing programs to explore different therapeutic indications that DehydraTECH-enhanced drug products can be utilized for the purpose of treatment options. Currently, our primary research program is the investigation of CBD for the reduction of hypertension leading to an upcoming application under the FDA for an IND.
These include, but are not limited to, ongoing programs to explore different therapeutic indications that DehydraTECH-enhanced drug products can be utilized together with new and improved treatment options.
Patents have been filed specifically for the use of DehydraTECH with cannabinoids for the treatment of heart disease and hypertension to support our anticipated Investigational New Drug (“IND”) application with the Food and Drug Administration (“FDA”), and for treatment of epilepsy. 4 Table of Contents We will continue to seek beneficial acquisitions of intellectual property if and when we believe it is advisable to do so.
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 also for diabetes/weight loss. We will continue to seek beneficial acquisitions of intellectual property if and when we believe it is advisable to do so.
There is no assurance that other technologies already deployed, or in development, will not form the basis of product formats that competitors or consumers choose to utilize. It is also possible that historic delivery methods that have been in use and the familiarity with them may prevent adoption of products utilizing DehydraTECH in alternative delivery formats.
Due to the size of the sectors we expect to encounter competitive threats from existing participants and unknown new entrants. There is no assurance that other technologies already deployed, or in development, will not form the basis of product formats that competitors or consumers choose to utilize.
We maintain our registered agent’s office and our U.S. business office at Nevada Agency and Transfer Company, 50 West Liberty, Suite 880, Reno, Nevada 89501. Our telephone number is (250) 765-6424.
We maintain our registered agent’s office and our U.S. business office at Registered Agents Inc. 401 Ryland Street, Ste. 200A, Reno, NV 89502. Our telephone number is (250) 765-6424. 15 Table of Contents
The sectors are complicated by the significant historical empirical data of older products or technologies versus the more limited published supporting data regarding the effects of new products or technologies. Due to the size of the sectors we expect to encounter competitive threats from existing participants and unknown new entrants.
Competition in nicotine, alternative nicotine delivery and nicotine cessation sectors in the U.S. is comprised of long-established entities, brands, and new technologies competing to create less harmful options. The sectors are complicated by the significant historical empirical data of older products or technologies versus the more limited published supporting data regarding the effects of new products or technologies.
There are several hypertension drugs that each generate $1 billion per year or more in revenue.
There are several hypertension drugs that each generate $1 billion per year or more in revenue. Treatment-resistent hypertension, valued at $43 million in 2023 and expected to reach $159.4 million by 2033 (https://www.futuremarketinsights.com/reports/treatment-resistant-hypertension-management-market).
These patents are as follows: · our first ever Canadian patent granted in our 6 th patent family, to use DehydraTECH to more efficiently deliver lipophilic active agents via transdermal or dermal delivery. · our first-ever US patent granted in our 20 th patent family, expands upon Lexaria’s international intellectual property rights to apply DehydraTECH enhancement technology to the sublingual delivery of nicotine.
These patents are as follows: · our first ever Canadian patent granted in our 3 rd patent family, to use DehydraTECH to more efficiently deliver lipophilic active agents via stable ready-to-drink beverage formats · our first ever European patent granted in our 6 th patent family, to use DehydraTECH to more efficiently deliver lipophilic active agents via transdermal or dermal delivery. · our first ever Canadian patent granted in new patent family #14, to use DehydraTECH to more efficiently deliver lipophilic agents in infused tobacco leaves or tobacco materials · our first ever Japanese and Canadian patents in our 18 th patent family, to use DehydraTECH to enhance antiviral agents · our first ever Canadian patent granted in our 20 th patent family, to apply DehydraTECH enhancement technology to the sublingual delivery of nicotine. · a new US patent granted in our 21 st patent family which recognizes DehydraTECH’s ability, when combined with CBD, to treat hypertension. · four US patents granted in new patent family #24 which recognizes DehydraTECH’s ability, when combined with CBD, to treat epilepsy Research and Development Lexaria incurred $2,360,565 in R&D expense during fiscal 2024.
The newly combined molecules are then integrated into production of the end-product using any number of dosage formats. From foods and beverages to cosmetics and nutraceuticals, this technology extends across many product categories beyond the primary pharmaceutical focus of the Company.
While the Company’s primary focus is on pharmaceutical drug products, this technology extends across many product categories including foods, beverages, cosmetics and nutraceuticals.
The FDA sent a positive written response from its pre-IND meeting regarding DehydraTECH-CBD and confirmed its agreement with Lexaria’s proposal to pursue a 505(b)(2) new drug application (“NDA”) regulatory pathway for its program. This abbreviated pathway typically enables a quicker route to commercial approval than a traditional 505(b)(1) NDA pathway.
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.
Ltd.) (“Premier”) for all product formats in Japan. 10 Table of Contents In order for Premier, a cosmetics and skin-care company listed on the Tokyo Stock Exchange, to continue to retain ongoing exclusivity for DehydraTECH in Japan, it must take-over the minimum quarterly payments to Lexaria which, during the first five years of the agreement, amount to a minimum of $4.5 million.
Ltd. (as assigned pursuant to its absorption merger with Premier Wellness Science Co. Ltd.) (“Premier”) for all product formats in Japan. 12 Table of Contents Premier, a cosmetics and skin-care company listed on the Tokyo Stock Exchange, amended its exclusive perpetual license to a non-exclusive license ending on August 31, 2025.
Removed
DehydraTECH formulations have been found in some cases to reduce the need for unwanted sweeteners or chemical masking agents used for flavor- and odor-blocking, allowing manufacturers to create low-sugar products with fewer calories and artificial sweeteners.
Added
Using controlled dehydration processing, the payload and long chain fatty acid-rich triglyceride oils are reversibly associated together at a molecular level. The newly combined molecules are then integrated into production of the end-product using any number of dosage formats.
Removed
This further protects our exclusivity in the use of DehydraTECH with sublingual delivery of nicotine, treatment of hypertension and delivery of lipophilic active agents via transdermal or dermal delivery.
Added
These products cross a wide range of bioactive molecules including GLP-1/GIPs, NSAID’s, nicotine and cannabidiol (“CBD”) with additional molecules of interest continually being evaluated.
Removed
The patent covers many different forms of nicotine including free base nicotine, nicotine salts, polymer resins of nicotine and other forms of nicotine complexes. · two US patents granted in our 21 st patent family which recognizes DehydraTECH’s ability, when combined with CBD, to treat hypertension. 5 Table of Contents Research and Development Lexaria incurred $3,666,721 (2022- $1,842,675) in R&D expenditures during fiscal 2023.
Added
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.
Removed
During fiscal 2023 Lexaria marked significant milestones in utilizing DehydraTECH-processed CBD for investigating heart disease and hypertension; and separately, for nicotine delivery via an oral pouch format, as a non-combusted, reduced-risk alternative to smoking. The following studies are the most recent contributors to our applied R&D programs that were completed in fiscal 2023.
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And further expanded our patent protection for our other patent families.
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These studies have been entirely funded through the Company’s existing cash resources. Hypertension: HYPER-H21-4 HYPER-H21-4 was the most ambitious study Lexaria had ever undertaken and was supported from the successful outcomes from our other 2021 human hypertension studies.
Added
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 has received a Study May Proceed letter from the FDA in early calendar-2024.
Removed
This study was intended to “de-risk” outcomes prior to Lexaria’s planned entry into formal investigational new drug (“IND”) regulatory pathways for the use of DehydraTECH-CBD to treat hypertension and possibly other forms of cardiovascular disease.
Added
The following studies are the most recent contributors to our applied R&D programs that were completed in fiscal 2024. These studies have been entirely funded through the Company’s existing cash resources.
Removed
The study protocols were approved by the Independent Review Board in December 2021 with the program commencing in April 2022 and dosing completion in July 2022. The primary efficacy outcome from the study was the data related to 24-hour ambulatory blood pressure.
Added
Diabetes and Weight Loss Management Investigation During the fiscal-year ended August 31, 2024, Lexaria completed its initial investigational study to examine DehydraTECH-enhanced GLP-1 for prospective improvement in diabetes and weight loss management applications.
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Secondary study outcomes included: vascular health including arterial stiffness and autonomic balance; electrocardiogram analysis; brain structure and function through magnetic resonance imaging (MRI) testing; blood biomarkers (including renal, hepatic inflammation, lipids such as cholesterol); sleep quality / daytime sleepiness / sleep disorders; actigraphy, geriatric depression scale, perceived stress, and Beck anxiety inventory.
Added
The initial investigation (Human Pilot Study #1 or GLP-1-H24-1) was an investigator-initiated pilot study of the GLP-1 drug semaglutide with seven (7) healthy volunteers comparing performance of a DehydraTECH-semaglutide oral capsule formulation to that of commercially available Rybelsus® tablets. For purposes of this initial study, the DehydraTECH-semaglutide composition was compound formulated using Rybelsus tablets as the semaglutide source input.
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The study consisted of 66 volunteers between the ages of 40-70 and used a double blinded, randomized cross-over design, which utilized a placebo control. Some volunteers were recruited who were using hypertension drugs such as angiotensin-converting enzyme inhibitors, with or without diuretics, to help evaluate the efficacy of DehydraTECH CBD with and without other hypertension treatments.
Added
As noted in our press releases issued on November 27 and 28, 2023, interim study findings showed that the DehydraTECH-semaglutide capsules sustained higher levels of semaglutide in blood; had faster achievement of peak drug delivery; had reduced incidence of moderate to severe side effects; sustained lower levels of blood glucose and lowered blood-glucose spike after eating.
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In October 2022 Lexaria announced initial findings from HYPER-H21-4 evidencing a sustained drop in blood pressure (BP) in normally active hypertensive patients following multiple weeks of oral CBD therapy, using Lexaria’s patented DehydraTECH-CBD capsule formulation. The primary safety and efficacy objectives of the study were successfully achieved.
Added
On January 4, 2024, upon conclusion of the study and full dataset analysis, the final study findings built upon the previously released interim findings evidencing that DehydraTECH-semaglutide produced even more pronounced and sustained higher levels of semaglutide in blood and lower levels of blood glucose and lowered blood-glucose spike after eating, while continuing to demonstrate reduced incidence of moderate to severe side effects.
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BP was significantly reduced by 2.5 weeks and was sustained over the full 5-weeks of dosing using relatively low doses of CBD (as compared to other regulator approved pharmaceutical CBD applications) as a direct result of the well-established drug delivery efficiencies of Lexaria’s DehydraTECH technology. These reductions in BP were achieved with zero serious adverse events being reported.
Added
Based on this initial pilot study’s success, during the fiscal-year, Lexaria commenced a comprehensive animal and human clinical research and development program to thoroughly evaluate DehydraTECH for the improved delivery of GLP-1 and GIP drugs, designed to support prospective commercial partnering with global pharmaceutical companies.
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Also, there were no adverse changes observed in liver enzymes which is an important clinical safety biomarker of oral CBD therapy.
Added
The studies which were undertaken or are currently in progress are as follows: Human Pilot Study #2 (GLP-1-H24-2) This human pilot study was conducted in 9 healthy volunteers, to study a single dose of oral ingested DehydraTECH-semaglutide capsules in a similar design but with a slightly different formulation to Human Pilot Study #1, to be compared to commercially available Rybelsus®.
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Of note, these significant decreases in BP were achieved using relatively low doses of DehydraTECH-CBD as a direct result of the well-established drug delivery efficiencies of Lexaria’s DehydraTECH technology. 6 Table of Contents There were no serious adverse events to report as a result of the program dosing.
Added
Of note, Human Pilot Study #2 employed so called fed pre-dose study conditions, since this was deemed to be of scientific interest given the fact we had already demonstrated superior pharmacokinetic performance of its DehydraTECH semaglutide capsule composition under the recommended fasted pre-dose conditions in its previous Human Pilot Study #1.
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This demonstrates a noteworthy safety and tolerability profile relative to conventional anti-hypertensive medications. This is a major achievement for Lexaria, as avoiding serious adverse events at clinically efficacious doses will be a primary requirement to achieve eventual regulatory marketing authorizations.
Added
We also studied an oral dissolvable DehydraTECH-semaglutide tablet formulation (dissolvable into sublingual/buccal tissue) to determine whether GLP-1 drug absorption via this route is effective and well tolerated as an alternative to the conventional oral ingestible route which often presents with gastrointestinal side effect issues.
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Another important discovery from study HYPER-H21-4 was that the decreases in BP were similar in persons currently being treated with standard of care BP medications as in persons who were not undergoing any current standard of care BP treatment.
Added
The DehydraTECH compositions for this study were compound-formulated using commercially available Rybelsus® tablets as the semaglutide input material.
Removed
This observation is suggestive that Lexaria’s DehydraTECH-CBD has the potential to offer additive BP reduction benefits on top of any degree of improvements the standard of care medications achieved for those patients before entry into the study.
Added
The DehydraTECH-semaglutide capsules evidenced higher semaglutide levels in 17 of the 19 blood draws taken until the 24-hour completion of the study averaging 18.8% higher semaglutide levels over the course of the study compared to Rybelsus ® alone, although the differences were variable and not significant statistically with such a small sample size.
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Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
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Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
24 edited+3 added−9 removed74 unchanged
2023 filing
2024 filing
This could result in the lost revenue or program delays. Demand for our services may be adversely affected if customers lose confidence in the quality of our services or the industry’s practices. Adverse publicity may discourage businesses from contracting our services and could have a material adverse effect on future revenue generation.
This could result in lost revenue or program delays. Demand for our services may be adversely affected if customers lose confidence in the quality of our services or the industry’s practices. Adverse publicity may discourage businesses from contracting our services and could have a material adverse effect on future revenue generation.
Future collaborations may involve the following risks whereby collaborators may: · not perform their obligations as expected or terminated an agreement for their convenience. If terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates. We could face difficulty in attracting new collaborators.
Future collaborations may involve the following risks whereby collaborators may: · not perform their obligations as expected or terminate an agreement for their convenience. If terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates. We could face difficulty in attracting new collaborators.
C. Risk Associated with Current Regulatory Environments Our product candidates are in an early stage of development and may fail or experience significant delays or may never advance to the clinical stage, which may materially and adversely impact our business.
Risk Associated with Current Regulatory Environments Our product candidates are in an early stage of development and may fail or experience significant delays or may never advance to the clinical stage, which may materially and adversely impact our business.
These terms can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; · the IRB may disagree with our design or change the requirements for approval even after it has incorporated their review and comments; · authorities may impose a hold on or suspend a program due to any number of factors, including a request for further information or other administrative actions, results of competitors programs, noncompliance with changing regulatory requirements or a finding that the participants are being exposed to unacceptable health risk or changes in governmental regulations; 14 Table of Contents · studies or trials of various APIs may produce negative or inconclusive results.
These terms can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; · the IRB may disagree with our design or change the requirements for approval even after it has incorporated their review and comments; · authorities may impose a hold on or suspend a program due to any number of factors, including a request for further information or other administrative actions, results of competitors programs, noncompliance with changing regulatory requirements or a finding that the participants are being exposed to unacceptable health risk or changes in governmental regulations; · studies or trials of various APIs may produce negative or inconclusive results.
We cannot predict if investors will find our common shares less attractive because we are not required to comply with more robust disclosure or the auditor attestation requirements. If investors find our common shares less attractive as a result, there may be a less active trading market for our common shares and trading prices may be negatively affected.
We cannot predict if investors will find our common shares less attractive because we are not required to comply with more robust disclosure or the auditor attestation requirements. If investors find our common shares less attractive as a result, there may be a less active trading market for our common shares and trading prices may be negatively affected. Item 1B.
We have experienced erratic share price and trading volume movement of our common stock which could be influenced by any number of factors including those extraneous to our operating performance and business prospects. Our by-laws do not contain anti-takeover provisions, which could result in a change of our executive management and directors if there is a take-over of our Company.
We have experienced erratic share price and trading volume movement of our common stock which could be influenced by any number of factors including those extraneous to our operating performance and business prospects. 21 Table of Contents Our by-laws do not contain anti-takeover provisions, which could result in a change of our executive management and directors if there is a take-over of our Company.
They may cease to devote resources to the development of collaborative product candidates. · independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if they conclude that competitive products are more likely to be successfully developed than our products. · use their proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property. · become involved in a business combination which, subject to its contractual obligations, might detract from or terminate the development of any of our product candidates.
They may cease to devote resources to the development of collaborative product candidates. · independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if they conclude that competitive products are more likely to be successfully developed than our products. · use their proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property. · become involved in a business combination which, subject to its contractual obligations, might detract from or terminate the development of any of our product candidates. 19 Table of Contents C.
The effects of such reversions could cause significant delays or abandonment of testing with negative effect to our business through financial loss, industry credibility and/or a temporary or permanent decline in valuation of our Company. 13 Table of Contents If we are unable to retain and hire qualified personnel, we may not be able to implement our business plan successfully.
The effects of such reversions could cause significant delays or abandonment of testing with negative effect to our business through financial loss, industry credibility and/or a temporary or permanent decline in valuation of our Company. If we are unable to retain and hire qualified personnel, we may not be able to implement our business plan successfully.
Because patents involve complex legal and factual questions, the issuance, scope, validity, and enforceability of patents cannot be predicted with certainty. Some of our patent pending applications will not be granted as patents.
Because patents involve complex legal and factual questions, the issuance, scope, validity, and enforceability of patents cannot be predicted with certainty. Some of our patent pending applications may not be granted as patents.
As a result, we may experience material fluctuations in future operating results on a quarterly and annual basis which could materially affect our business, financial condition, and operating results. 16 Table of Contents The R&D programs required to evidence that DehydraTECH’s demonstrated efficacy also works with other APIs and molecules to develop the evidence may ultimately be unsuccessful.
As a result, we may experience material fluctuations in future operating results on a quarterly and annual basis which could materially affect our business, financial condition, and operating results. The R&D programs required to evidence that DehydraTECH’s demonstrated efficacy also works with other APIs and molecules to develop the evidence may ultimately be unsuccessful.
As a result of these factors, management cannot be certain that the Company will be able to compete against current or future competitors or that competitive pressure will not seriously harm our business. Any failure in protecting our intellectual property may have a negative impact adverse effect on our ability to develop and licence DehydraTECH.
As a result of these factors, management cannot be certain that the Company will be able to compete against current or future competitors or that competitive pressure will not seriously harm our business. 16 Table of Contents Any failure in protecting our intellectual property may have a negative impact adverse effect on our ability to develop and license DehydraTECH.
As a result, we cannot guarantee that we will be able to submit INDs, or similar applications, within our projected timelines, if at all, or that the FDA, or similar regulatory authorities, will allow us to commence clinical trials. 17 Table of Contents Pharmaceutical products incorporating DehydraTECH has never been approved for the treatment of disease.
As a result, we cannot guarantee that we will be able to submit INDs, or similar applications, within our projected timelines, if at all, or that the FDA, or similar regulatory authorities, will allow us to commence clinical trials. Pharmaceutical products incorporating DehydraTECH have never been approved for the treatment of disease.
We cannot predict the nature of any future laws, regulations, interpretations, or their application to non-pharmaceutical hemp-based CBD. It is probable that regulations may be enacted that will be directly applicable to our business. Violations, alleged or otherwise, could disrupt our business or the business of our licensees.
We cannot predict the nature of any future laws, regulations, interpretations, or their application to non-pharmaceutical hemp-based CBD. It is probable that regulations may be enacted that will be directly applicable to our business. Violations, alleged or otherwise, could disrupt our business or the business of our licensees. Any compliance deficiencies with future government regulation could increase our operating costs.
We cannot ensure that we will be able to initiate or maintain legal efforts in all jurisdictions which could limit the markets for our technology and reduce possible future revenues. We are dependent on the services of third parties and unsatisfactory performance will negatively affect our Company. We rely on third parties to conduct, supervise, and monitor our R&D programs.
We cannot ensure that we will be able to initiate or maintain legal efforts in all jurisdictions which could limit the markets for our technology and reduce possible future revenues. 17 Table of Contents We are dependent on the services of third parties and unsatisfactory performance will negatively affect our Company.
The FDA has approved one cannabinoid-derived drug product for the treatment of seizures associated with Lennox-Gastaut syndrome and Dravet syndrome and three synthetic cannabinoid-related drug products for the treatment of nausea and vomiting caused by cancer chemotherapy.
To date the FDA has approved only limited use of cannabinoids for the treatment of any disease or condition. The FDA has approved one cannabinoid-derived drug product for the treatment of seizures associated with Lennox-Gastaut syndrome and Dravet syndrome and three synthetic cannabinoid-related drug products for the treatment of nausea and vomiting caused by cancer chemotherapy.
Any compliance deficiencies with future government regulation could increase our operating costs. 18 Table of Contents In the US, interstate shipment of hemp-derived non-pharmaceutical CBD from one state to another is legal only where both states have laws and regulations that allow for the production and sale of such products and that qualify under the Farm Bill.
In the US, interstate shipment of hemp-derived non-pharmaceutical CBD from one state to another is legal only where both states have laws and regulations that allow for the production and sale of such products and that qualify under the Farm Bill.
Any delays in our manufacturing capabilities or research studies may have a material adverse impact on our business, financial condition and prospects. 15 Table of Contents Any failure to prevent or mitigate security breaches and improper access to or disclosure of our data or our user data could result in the loss or misuse of such data, which could harm our business and reputation and diminish our competitive position Awareness and sensitivity to personal data breaches and cyber security threats is at an all-time high.
Any failure to prevent or mitigate security breaches and improper access to or disclosure of our data or our user data could result in the loss or misuse of such data, which could harm our business and reputation and diminish our competitive position. Awareness and sensitivity to personal data breaches and cyber-security threats is at an all-time high.
Delays or rejections in the regulatory approval process because of additional government regulation resulting from future legislation or administrative action, or from changes in the policies of the FDA or other regulatory bodies during the period of product development, clinical trials, or regulatory review may occur.
Any success achieved at a given stage of the clinical trials does not guarantee that the future achievement of success at any subsequent stage, including without limitation, final FDA approval. 20 Table of Contents Delays or rejections in the regulatory approval process because of additional government regulation resulting from future legislation or administrative action, or from changes in the policies of the FDA or other regulatory bodies during the period of product development, clinical trials, or regulatory review may occur.
Regulatory approval also requires the submission about the product manufacturing process and the inspection of the manufacturing facilities. Our success is dependent on our or a third parties’ ability to successfully navigate the risks and obstacles associated with obtaining FDA clearance for any DehydraTECH enhanced formulated product.
Our success is dependent on our or a third parties’ ability to successfully navigate the risks and obstacles associated with obtaining FDA clearance for any DehydraTECH enhanced formulated product. Pharmaceutical products using DehydraTECH with CBD as an API have never been approved for the treatment of any disease.
Third-party service providers are not our employees, and except for remedies available to us under contract, we cannot control whether or not they devote sufficient time, skill, and resources to our programs. We remain responsible for ensuring that each of our programs are conducted in accordance with the applicable protocol, legal, regulatory and scientific standards.
We rely on third parties to conduct, supervise, and monitor our R&D programs. Third-party service providers are not our employees, and except for remedies available to us under contract, we cannot control whether or not they devote sufficient time, skill, and resources to our programs.
Even if we are successful in any litigation, it could result in substantial costs and be a distraction to management with an adverse impact on our business. Risks related to the effects of COVID-19 The outbreak of the coronavirus (COVID-19) has evolved into a global pandemic.
Even if we are successful in any litigation, it could result in substantial costs and be a distraction to management with an adverse impact on our business. 18 Table of Contents B. Risks Associated with our Financial Condition Without additional financing to develop our business plan, our business may fail.
We currently have no commercial pharmaceutical products and therefore generate no revenue from pharmaceutical products and may never be able to develop marketable pharmaceutical products. We have no experience in filing the applications necessary to obtain approval and expect that we will need to rely on CROs and regulatory consultants to assist us with this process.
We have limited experience in filing the applications necessary to obtain approval and expect that we will need to rely on CROs and regulatory consultants to assist us with this process. Regulatory approval also requires the submission about the product manufacturing process and the inspection of the manufacturing facilities.
A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier studies. It is possible we could face similar setbacks.
While we have seen success in our animal studies and in many of our human pilot studies and exploratory human studies, it is possible that setbacks may occur in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in such earlier studies.
Switching or adding additional third parties involve increased management time, focus, regulatory approvals and/or additional cost.
Switching or adding additional third parties involve increased management time, focus, regulatory approvals and/or additional cost. Any delays in our manufacturing capabilities or research studies may have a material adverse impact on our business, financial condition and prospects.
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The extent to which the virus impacts our business and operating results will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning the virus, its variants, and the actions to contain the coronavirus or treat its impact, among others.
Added
We remain responsible for ensuring that each of our programs are conducted in accordance with the applicable protocol, legal, regulatory and scientific standards.
Removed
With the continued spread of the virus, our business operations could be interrupted or delayed. It is possible that our R&D programs could be adversely affected by the restrictions imposed during the pandemic. Travel restrictions, lock-down quarantines or other such limitations may hamper our ability to conduct our R & D programs.
Added
We may choose to conduct one or more of our clinical trials or a portion of our clinical trials for our product candidates outside the U.S.
Removed
In some of our programs, particularly our human studies, participant recruitment and enrolment, participant dosing, distribution of results, study monitoring and data analysis may be paused or delayed due to the effects that the pandemic has in different localities. If the virus continues to spread, some participants and clinical investigators may not be able to comply with clinical trial protocols.
Added
The acceptance of study data from clinical trials conducted outside the U.S. or another jurisdiction by the FDA or comparable regulatory authority may be subject to certain conditions or may not be accepted at all. We currently have no commercial pharmaceutical products and therefore generate no revenue from pharmaceutical products and may never be able to develop marketable pharmaceutical products.
Removed
We currently utilize third parties to conduct our R&D programs and in the production of our B2B customers’ products. These relationships could be adversely impacted by any future covid-related restrictions. It is possible that our supply chain may be disrupted, limiting our ability to manufacture products for our R&D operations or for our B2B customers.
Removed
The spread of COVID-19 and its variants has caused a broad global impact which could have a material economic effect on our business.
Removed
While the potential economic impact brought by and the duration of the pandemic may be difficult to assess or predict, it has already caused, and is likely to result in further significant disruption of global financial markets, which may reduce our ability to access capital either on favorable terms or at all.
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Inflation and recession or other sustained adverse economic events resulting from the pandemic could materially and adversely affect our business and the market for or value of our common stock. B. Risks Associated with our Financial Condition Without additional financing to develop our business plan, our business may fail.
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Any success achieved at a given stage of the clinical trials does not guarantee that the future achievement of success at any subsequent stage, including without limitation, final FDA approval.
Removed
Pharmaceutical products using DehydraTECH with CBD as an API have never been approved for the treatment of any disease. To date the FDA has approved only limited use of cannabinoids for the treatment of any disease or condition.
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
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Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
4 edited+1 added−9 removed2 unchanged
2023 filing
2024 filing
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities On January 12, 2021, the Company’s common stock and warrants began trading on the National Association of Securities Dealers Automated Quotations Stock Market (“Nasdaq”) under the trading symbols “LEXX” and “LEXXW”, respectively.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities On January 12, 2021, the Company’s common stock and certain warrants began trading on the National Association of Securities Dealers Automated Quotations Stock Market (“Nasdaq”) under the trading symbols “LEXX” and “LEXXW”, respectively.
Our current policy is to retain earnings, if any, for use in our operations and in the development of our business. As a result, we anticipate that only appreciation of the price of our common stock, if any, will provide a return to investors for at least the foreseeable future.
As a result, we anticipate that only appreciation of the price of our common stock, if any, will provide a return to investors for at least the foreseeable future.
Any future determination related to dividend policy will be made at the discretion of our Board of Directors (“our Board”) and will depend on, among other factors, our results of operations, financial condition, capital requirements, contractual restrictions, business prospects and other factors our Board may deem relevant.
Any future determination related to dividend policy will be made at the discretion of our Board of Directors (“our Board”) and will depend on, among other factors, our results of operations, financial condition, capital requirements, contractual restrictions, business prospects and other factors our Board may deem relevant. 24 Table of Contents Warrants During the year ended August 31, 2024, 7,093,208 warrants were issued, 5,382,042 warrants were exercised for gross proceeds of $6,103,602 and 300,000 warrants expired.
There were 8,091,650 common shares issued and outstanding as of August 31, 2023 (5,950,998 at August 31, 2022). As of November 20, 2023, there were approximately 35 shareholders of record. Dividend Policy We have never declared or paid any dividends on our capital stock.
There were 15,810,205 common shares issued and outstanding as of August 31, 2024. As of November 22, 2024, there were approximately 33 shareholders of record. Dividend Policy We have never declared or paid any dividends on our capital stock. Our current policy is to retain earnings, if any, for use in our operations and in the development of our business.
Removed
Recent Sales of Unregistered Securities During the year ended August 31, 2023, the Company did not issue any restricted common shares. Warrants During the year ended August 31, 2023, 2,106,000 warrants were issued, none were exercised, and 7,500 were cancelled. The 2,106,00 warrants issued have an exercise price of $0.95 and are exercisable until May 11, 2028.
Added
As at August 31, 2024, the Company had 5,931,649 warrants outstanding as follows: · 60,798 warrants expiring on November 13 or November 28, 2024 with an exercise price of $36.00 · 16,667 warrants expiring on March 16, 2025 with an exercise price of $9.00 · 317,190 warrants expiring on May 6 or May 11, 2025 with an exercise price of $10.50 · 1,719,828 warrants expiring on January 11, 2026 with an exercise price of $6.58 · 483,750 warrants expiring on May 11, 2028 with an exercise price of $0.95 · 259,741 warrants expiring on February 16, 2029 with an exercise price of $2.185 · 54,546 warrants expiring on February 14, 2029 with an exercise price of $2.8875 · 2,917,032 warrants expiring on February 16, 2029 with an exercise price of $4.75 · 102,097 warrants expiring on February 16, 2029 with an exercise price of $5.9375 25 Table of Contents Purchases of Equity Securities by the Issuer and Affiliated Purchasers The Company did not repurchase any of its equity securities during its fiscal year ended August 31, 2024.
Removed
Equity Compensation Plan Information We have no long-term incentive plans other than the equity incentive plan described below. 21 Table of Contents Equity Incentive Plan Securities authorized for issuance under equity compensation plans Plan Category Number of securities to be based upon exercise of outstanding options, warrants and rights Weighed-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plan [excluding securities reflected in column (a)] (a) (b) (c) Equity compensation plans not approved by shareholders Nil Nil Nil Equity compensation plans approved by shareholders 446,936 $ 3.36 63,497 Total 446,936 $ 3.36 63,497 All future option issuances shall be made under the Equity Incentive Plan.
Removed
Our Board may amend, suspend, or terminate this Plan or any portion thereof subject to the approval of any requisite regulatory authority. No such amendment, suspension or termination shall alter or impair any outstanding unexercised Options or any rights without the consent of such Participant.
Removed
If this Plan is suspended or terminated, the provisions of this Plan and any administrative guidelines, rules and regulations relating to this Plan shall continue in effect for the duration of such time as any Option remains outstanding. On May 9, 2023, the Company’s shareholders approved two proposals to amend the Equity Incentive Plan.
Removed
The approval of the first proposal authorized the Board to amend the Equity Incentive Plan by increasing the maximum number of shares issuable to 10% of the issued share capital as at May 31, 2023 and the second proposal authorized the Board to amend the Equity Incentive Plan to allow for an evergreen formula whereby on January 1 of each calendar year the number of shares issuable pursuant to the Equity Incentive Plan may be increased, at the discretion of the Board, to 10% of the issued share capital as at December 31 of the preceding year.
Removed
As the Company still has the ability to issue options for the purchase of up to 109,497 common shares under its Equity Incentive Plan (being the 63,497 shares issuable as at fiscal year end and an additional 46,000 shares issuable due to options which expired on September 6, 2023), it has not yet filed a Form S-8 Registration Statement for the registration of the additional shares issuable pursuant to the approved proposals. 22 Table of Contents Convertible Securities Pursuant to our Equity Incentive Plan, during the year ended August 31, 2023, we granted stock options to directors, officers, employees, and consultants that enable the option holders to purchase 69,600 common shares of the Company.
Removed
Options were granted at prices of: 3,400 at $3.04, 41,200 at $1.96, 5,000 at $2.73 and 20,000 at $0.87 and have five year terms. The 69,600 options granted and vested during the year had a fair value of $89,057 using the Black Scholes valuation method and the non-cash expense was included in consulting compensation.
Removed
Further, during the year ended August 31, 2023, 267,969 previously granted options with exercise prices ranging from $9.60 to $4.80 were repriced to $3.00 following shareholder approval obtained at the Company’s annual shareholder meeting held on May 9, 2023. See Note 16. Purchases of Equity Securities by the Issuer and Affiliated Purchasers Not applicable. Item 6.
Removed
Selected Financial Data As a “Smaller Reporting Company”, this Item and the related disclosure is not required.
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
33 edited+35 added−22 removed15 unchanged
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
33 edited+35 added−22 removed15 unchanged
2023 filing
2024 filing
Implementing our technology could lead to smaller dosing and decreased manufacturing costs while masking unwanted flavor and smell of the active molecules. We are anticipating these efforts will lead to increased licencing revenue through licensing partnerships. We are pursuing technology licensing opportunities as a method of generating profitable revenue streams over long periods of time.
Implementing our technology could lead to smaller dosing and decreased manufacturing costs while masking unwanted flavor and smell of the active molecules. We are anticipating these efforts will lead to increased licensing revenue through licensing partnerships. We are pursuing technology licensing opportunities as a method of generating profitable revenue streams over long periods of time.
In fiscal 2024 and assuming our existing clients remain in compliance with their contracts, the Company expects to see an increase in revenue through further technology licensing from DehydraTECH processed hemp-based CBD and other consumer products. One of our contracted clients is contractually required to make significantly larger quarterly payments to us during fiscal 2024 than during fiscal 2023.
In fiscal 2025 and assuming our existing clients remain in compliance with their contracts, the Company expects to see an increase in revenue through further technology licensing from DehydraTECH processed hemp-based CBD and other consumer products. One of our contracted clients is contractually required to make significantly larger quarterly payments to us during fiscal 2025 than during fiscal 2024.
Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the stage and complexity of our R&D studies and related expenditures, the receipt of additional payments related to the out-licencing of our technology, if any, and the receipt of payments under any current or future collaborations we may enter.
Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the stage and complexity of our R&D studies and related expenditures, the receipt of additional payments related to the out-licensing of our technology, if any, and the receipt of payments under any current or future collaborations we may enter.
Off-Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Off-Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. Item 7A.
The following management’s discussion and analysis of financial condition and results of operations (“MD&A”) is provided to enhance the readers understanding of our results of operations and financial condition for the year ended August 31, 2023, and in comparison, to the year ended August 31, 2022.
The following management’s discussion and analysis of financial condition and results of operations (“MD&A”) is provided to enhance the readers understanding of our results of operations and financial condition for the year ended August 31, 2024, and in comparison, to the year ended August 31, 2023.
We have not yet, however, been able to secure a large client utilizing our technology in large quantities of products. With thirty-seven patents granted to date of which thirteen are granted in the US, Lexaria believes that it has a robust patent portfolio but continues to seek additional protection for its intellectual property globally.
We have not yet, however, been able to secure a large client utilizing our technology in large quantities of products. With forty-six patents granted to date of which eighteen are granted in the US, Lexaria believes that it has a robust patent portfolio but continues to seek additional protection for its intellectual property globally.
The FDA has agreed with the Company’s proposed clinical protocol for DehydraTECH-CBD, which, as currently designed, would target 120 patients with hypertension. The regulator has also decided that there was no need to conduct additional non-clinical studies before the start of the IND program. Lexaria has engaged its CRO and the start-up activities for this study have commenced.
The FDA has agreed with the Company’s proposed clinical protocol for DehydraTECH-CBD, which, as currently designed, would target 120 patients with hypertension. The regulator has also decided that there was no need to conduct additional non-clinical studies before the start of the IND program.
We do not anticipate making any material capital expenditures in the fiscal 2024 as we believe our current facilities and equipment are sufficient for the forthcoming twelve months following the filing date of this report.
We do not anticipate making any material capital expenditures in fiscal 2025, other than those currently budgeted for our R&D programs, as we believe our current facilities and equipment are sufficient for the forthcoming twelve months following the filing date of this report.
This is attributable to continuing decreases in the fair value of the Company’s investment in Hill Inc. common shares. We remain confident that the loss may be temporary in nature as Hill Inc. continues to make inroads to the US hemp markets with DehydraTECH enabled products produced and sold by their licensees.
We remain confident that the loss may be temporary in nature as Hill Inc. continues to make inroads into the US hemp markets with DehydraTECH enabled products produced and sold by their licensees.
Lexaria is advancing several R&D activities in both preclinical and planned future clinical programs. Our primary focus during the year was on our investigations of CBD for the reduction of hypertension.
Lexaria is advancing several R&D activities in both preclinical and planned future clinical programs. Our primary focus during the fiscal year was on our investigations of DehydraTECH-enhanced GLP-1 and GIP drugs.
We consider the advancement of our applied R&D studies as a vital step towards our goal of establishing commercial relationships with industry partners who can utilize DehydraTECH within existing or new product lines. Conducting additional in vitro and in vivo studies which test the absorption of some, or all of the molecules named within our patents and patent applications, i.e.
We consider the advancement of our applied R&D studies as a vital step towards our goal of establishing commercial relationships with industry partners who can utilize DehydraTECH within existing or new product lines.
Of these three, we do not expect to make any significant expenditures during fiscal 2024 on non-combusted nicotine R&D. Of significant note, Lexaria submitted our preliminary pre-meeting application for an Investigational New Drug (“IND”) to the FDA with plans to develop a cannabidiol-based drug formulation, DehydraTECH-CBD for hypertension.
Of significant note, Lexaria submitted our preliminary pre-meeting application for an Investigational New Drug (“IND”) to the FDA with plans to develop a cannabidiol-based drug formulation, DehydraTECH-CBD for hypertension.
We will continue to invest in our R&D programs for the foreseeable future and we expect these expenses to continue to increase in 2024 compared to 2023, assuming successful corporate financing activities. Our R&D programs are focused on three core business segments: pharmaceutical applications, reduced-risk non-combusted nicotine and CBD from hemp.
We will continue to invest in our R&D programs for the foreseeable future and we expect these expenses to increase in 2025 compared to 2024, assuming successful corporate financing activities.
CBD, vitamins, PDE5 inhibitors, nicotine and antiviral drugs, further substantiate the effectiveness of DehydraTECH. Successful tests are expected to increase awareness and acceptance of DehydraTECH as a meaningful method used to deliver some or all of the named molecules more effectively than current delivery methods avail.
Successful tests are expected to increase awareness and acceptance of DehydraTECH as a meaningful method used to deliver some or all of the named molecules more effectively than current delivery methods avail. Absorption tests are an important element leading towards higher rates of acceptance and the implementation of our technology licensing initiatives.
Results of Operations for our Year Ended August 31, 2023 Our net loss from operations for the year ended August 31, 2023, was $6,712,525 (2022 - $7,383,653).
Results of Operations for our Year Ended August 31, 2024 Our net loss from operations decreased by $903,871 to $5,808,654 for the year ended August 31, 2024 from $6,712,525 for the year ended August 31, 2023.
Cash Flows August 31, August 31, 2023 2022 Cash flows used in operating activities $ (5,881,237 ) $ (4,879,339 ) Cash flows used in investing activities (169,610 ) (180,640 ) Cash flows used in financing activities 1,589,731 (44,600 ) Decrease in cash $ (4,461,116 ) $ (5,104,579 ) Operating Activities Net cash used in operating activities was approximately $5.9 million for the year ended August 31, 2023, compared with $4.9 million during the same period in 2022.
Cash Flows August 31, August 31, 2024 2023 Cash flows used in operating activities $ (4,959,003 ) $ (5,881,237 ) Cash flows used in investing activities (188,605 ) (169,610 ) Cash flows provided by financing activities 10,315,207 1,589,731 Effect of exchange rate changes on cash (19,816 ) -- Increase/(Decrease) in cash $ 5,147,783 $ (4,461,116 ) 30 Table of Contents Operating Activities Net cash used in operating activities was approximately $5.0 million for the year ended August 31, 2024, compared with $5.9 million during the same period in 2023.
As of August 31, 2023, the Company had cash on hand of approximately $1.4 million to settle $270,000 in current liabilities. The Company believes this is sufficient to fund our expected R&D and operating expenditures for twelve-months following the filing date of this report.
The Company believes this is sufficient to fund our expected R&D and operating expenditures for the twelve-month period following the filing date of this report.
The changes between these periods for the respective items are summarized as follows: August 31 August 31 2023 2022 Change Revenues $ 226,208 $ 255,397 $ (29,189 ) Cost of goods sold (31,500 ) (71,841 ) 40,341 Research and development 3,666,721 1,842,675 1,824,046 Consulting fees & salaries 1,300,965 2,244,664 (943,699 ) Legal and professional 444,593 561,265 (116,672 ) Other general and administrative 1,316,451 2,153,991 (837,540 ) Other income (loss) (178,503 ) (764,614 ) 586,111 Net Loss $ (6,712,525 ) $ (7,383,653 ) $ 671,128 24 Table of Contents Revenue Lexaria’s business operations include technology licensing agreements where corporate licensees implement DehydraTECH under license within our contracted facilities under royalty agreements.
The changes between these periods for the respective items are summarized as follows: August 31, 2024 August 31, 2023 Change Revenues $ 464,278 $ 226,208 $ 238,070 Cost of goods sold 4,822 31,500 (26,678 ) Research and development 2,360,565 3,666,721 (1,306,156 ) Consulting fees & salaries 1,820,972 1,300,965 520,007 Legal and professional 812,066 444,593 367,473 Other general and administrative 1,218,983 1,316,451 (97,468 ) Other expense, net (55,524 ) (178,503 ) 122,979 Net Loss $ (5,808,654 ) $ (6,712,525 ) $ 903,871 27 Table of Contents Lexaria’s business operations include technology licensing agreements where corporate licensees implement DehydraTECH under license within our contracted facilities under royalty agreements.
Working Capital August 31, August 31, 2023 2022 Current assets $ 2,199,772 $ 6,977,516 Current liabilities (267,735 ) (194,036 ) Net Working Capital $ 1,932,037 $ 6,783,480 The Company’s working capital balance decreased by approximately $4.8 million due primarily to cash used in operating activities during the year ended August 31, 2023.
Working Capital August 31, August 31, 2024 2023 Current assets $ 7,897,986 $ 2,151,213 Current liabilities (1,099,419 ) (267,735 ) Net Working Capital $ 6,798,567 $ 1,883,478 The Company’s working capital balance increased by approximately $4.9 million due primarily to the net impact of cash from financing activities and cash used in operating activities during the year ended August 31, 2024.
As the Company continues with our IND application process and progresses into the clinical development of our initial product candidate, the need for substantial capital resources increases. Our existing cash will not be sufficient to complete the full development, testing and commercialization of an FDA approved product candidate.
As the Company continues with our IND application process and progresses into the clinical development of our initial product candidate, the need for substantial capital resources increases. The Company intends to form industry partnerships for later stage clinical development, which in any event is expected to be a multi-year process.
As such, during the year ended August 31, 2023, the Company recognized an impairment loss of $106,761 related to those abandoned applications. Liquidity and Capital Resources Since Lexaria’s entrance into the bioscience sector, it has accumulated net losses of $45.8 million of which approximately $6.7 million and $7.4 million were incurred, respectively, in the past two fiscal years.
Liquidity and Capital Resources Since Lexaria’s entrance into the bioscience sector, it has accumulated net losses of $51.6 million, of which approximately $5.8 million and $6.7 million were incurred, respectively, in the past two fiscal years. We expect to continue to incur significant operational expenses and net losses in the upcoming 12 months and beyond.
Maxim was paid 7% of the gross proceeds and was also reimbursed $70,000 for its expenses. 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.
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. There is no certainty that future equity or debt financing will be available or that it will be at acceptable terms, and the outcome of these matters is unpredictable.
Any of these actions could adversely and materially affect our business, cash flow, financial condition, results of operations, and potential prospects. The sale of additional equity may result in additional dilution to our stockholders. Entering into additional licencing agreements, collaborations, partnerships, alliances marketing, distribution, or licensing arrangements with third parties to increase our capital resources is also possible.
A lack of adequate funding may force us to reduce spending, curtail or suspend planned programs or possibly liquidate assets. Any of these actions could adversely and materially affect our business, cash flow, financial condition, results of operations, and potential prospects. The sale of additional equity may result in additional dilution to our stockholders.
Legal and professional fees were $116,672 lower in the year ended 2023 as compared to the previous year’s expenses. No bad debts were recorded in the years ended 2023 and 2022. The Company evaluated its patent portfolio and determined that certain pending applications had been abandoned or would not be pursued.
The increase in legal and professional fees reflects an increased level of equity financing-related activity during the fiscal year. The Company evaluated its patent portfolio and determined that certain pending applications had been abandoned or would not be pursued.
During the year ended August 31, 2023, we completed seven studies investigating DehydraTECH infused CBD, nicotine and estradiol. These programs, having been funded by the capital infusion of Lexaria’s 2021 financing of approximately $15 million, supported our significant advancements in the fields of heart disease and hypertension, hormones, oral nicotine, and diabetes.
These programs, having been funded by the proceeds of Lexaria’s 2024 financing activities of approximately $10.3 million, supported our significant advancements in the fields of diabetes, weight loss, heart disease and hypertension.
We expect to file our IND application as soon as possible after our third-party ingredient supplier has completed its FDA compliance requirements. Preclinical and clinical development is inherently unpredictable as is regulatory approval and commercialization, therefore we are unable to estimate with any certainty the costs we will incur, and the timelines required in our continued development and commercialization efforts.
These documents are expected to be submitted during the first calendar quarter of 2025. 28 Table of Contents Preclinical and clinical development is inherently unpredictable as is regulatory approval and commercialization, therefore we are unable to estimate with certainty the ultimate costs we will incur for multi-year programs, and the timelines required in our continued development and commercialization efforts.
Our pursuit of opportunities within the cannabinoid, nicotine and other bioactive molecular markets in the US and internationally continue unabated.
Our R&D results serve to de-risk the potential API products that could conceivably develop into clinical trials and ultimately new drugs. Our pursuit of opportunities within the GLP-1/GIP drug, cannabinoid, nicotine and other bioactive molecular markets in the US and internationally continue unabated.
We were granted a total of nine new patents during fiscal 2023 including our first ever patents in the country of Canada, making it one of our most successful years ever for the acquisition of new intellectual property. 23 Table of Contents Financial condition and operating performance The data generated from our past and ongoing R&D programs continues to support confirmatory results and are contributing greatly to our understanding of the workings of DehydraTECH.
Financial condition and operating performance The data generated from our past and ongoing R&D programs continues to support confirmatory results and are contributing greatly to our understanding of the workings of DehydraTECH. These findings encourage the pursuit of lucrative commercial applications in the pharmaceutical sector.
Also included are costs for advertising and marketing, investor relations, corporate facilities, insurance premiums, legal fees related to corporate matters, fees for auditing, and tax filings. 25 Table of Contents Our general and administrative expenses saw an overall decrease of $1,897,911 during the year ended August 31, 2023, as compared to a $753,185 increase during the previous year.
Also included are costs for advertising and marketing, investor relations, corporate facilities, insurance premiums, legal fees related to corporate matters, fees for auditing, and tax filings. General and administrative expenses for fiscal year 2024 increased by $790,012, or 26%, to $3,852,021 from $3,062,009 for fiscal year 2023.
It is now our intention to explore whether or not DehydraTECH has any benefits together with GLP-1 drugs in this regard. The Company continues to engage in small R&D projects and B2B formulation for third parties who are evaluating our technology for use in their product.
Subject to receipt of sufficient funding, we anticipate that we will be in a position to proceed with this study during the 2025 fiscal year. 26 Table of Contents The Company continues to engage in small R&D projects and B2B formulation for third parties who are evaluating our technology for use in their product.
If we do so we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favourable to us. 26 Table of Contents The Company has evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern.
The Company has evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern. As of August 31, 2024, the Company had cash on hand of approximately $6.5 million to settle $1.1 million in current liabilities.
Investing Activities Net cash used in investing activities is attributable to increased spending on our intellectual property. During the fiscal year, nine additional patents were granted. Financing Activities Net cash provided by financing activities reflects net proceeds from the issuance of common shares. Net proceeds from the ATM and May 11, 2023 offerings totaled $1,589,731.
The decrease in net cash used in operating activities during the year ended August 31, 2024 relates primarily to a decrease in our net loss ($903,871). Investing Activities Net cash used in investing activities is attributable to acquisitions of intellectual property and equipment. During the fiscal year, ten additional patents were granted.
Our consulting fees and salaries decreased by $943,699 in the year ended August 31, 2023, due primarily to a decrease of $582,209 in stock-based (non-cash) compensation expense, the elimination of one management position and the renegotiation for reduced fees with our consultants.
The increase in wages and salaries relates primarily to stock-based compensation expense (non-cash), which increased to $492,236 during the year ended August 31, 2024 from $170,382 for the year ended August 31, 2023 due to increased options vesting during the year.
Removed
We previously completed human studies on hypertension with results that were supportive of our plans to file an Investigational New Drug (“IND”) application with the US Food and Drug Administration (“FDA”). The FDA provided us with a positive written response from our pre-IND meeting in July 2022 regarding DehydraTECH-CBD for the treatment of hypertension.
Added
These investigations included two human pilot studies, with our second human pilot study testing an oral mouth melt form of DehydraTECH-enhanced semaglutide and an extensive 12 arm animal study to investigate DehydraTECH enhanced semaglutide (both pure API and formulated Rybelsus®) DehydraTECH enhanced liraglutide and DehydraTECH enhanced CBD for weight loss.
Removed
The FDA confirmed that it had agreed with Lexaria’s proposal to pursue a 505(b)(2) new drug application regulatory pathway for our program.
Added
In addition, Lexaria has commenced start-up activities for its 12 week chronic human clinical trial study of diabetic patients comparing DehydraTECH-cannabidiol (“CBD”), DehydraTECH-semaglutide, DehydraTECH-CBD combined with DehydraTECH-semaglutide and DehydraTECH-tirzepatide against a Rybelsus® control.
Removed
We continue working toward our IND filing, however as announced in our news release of August 30, 2023, we have experienced some delays due to FDA compliance requirements of one of our ingredient suppliers which must be completed prior to our submission of our IND application.
Added
In addition, we have continued to progress forward with addressing comments provided by the FDA on our IND application for the conduct of our Phase 1(b) clinical study investigation of DehydraTECH-CBD for the reduction of hypertension.
Removed
During the year ended August 31, 2023, we also completed studies with estradiol and nicotine and reported improved drug delivery characteristics with both molecules after they were treated with DehydraTECH. In fiscal 2023, we also advanced R&D activities in the fields of diabetes and weight loss management pursuant to successfully completed animal study work with our DehydraTECH-CBD in these areas.
Added
We were granted a total of ten new patents during fiscal 2024 including our first ever patents for the treatment of epilepsy, making it another successful year for the acquisition of new intellectual property.
Removed
These findings encourage the pursuit of lucrative commercial applications in the pharmaceutical sector. We continue to devote an increasing proportion of our resources toward pharmaceutical applications with the continuation of our programs directed at hypertension as we move toward FDA approved IND clinical studies.
Added
We continue to devote an increasing proportion of our resources toward pharmaceutical applications with the continuation of our programs directed at the enhancement of GLP-1 and GIP drugs. During the year ended August 31, 2024, we completed two human pilot studies and one animal study investigating DehydraTECH infused GLP-1, GIP and CBD formulations.
Removed
Absorption tests are an important element leading towards higher rates of acceptance and the implementation of our technology licensing initiatives. Our R&D results serve to de-risk the potential API products that could conceivably develop into clinical trials and ultimately new drugs.
Added
Conducting additional in vitro and in vivo studies which test the absorption of some, or all of the molecules named within our patents and patent applications, further substantiate the effectiveness of DehydraTECH.
Removed
Year Ended August 31, 2023 2022 Change IP Licensing $ 146,800 $ 54,560 $ 92,240 B2B 44,167 113,438 (69,271 ) Other 35,241 87,399 (52,158 ) $ 226,208 $ 255,397 $ (29,189 ) The primary source of revenues for the Company are derived from Lexaria Hemp where sales of B2B processing of intermediary CBD product saw a significant decrease of approximately 61% (2023 - $44,167 vs 2022- $113,438) in the year.
Added
Year Ended August 31, 2024 2023 Change IP Licensing $ 457,990 $ 146,800 $ 311,190 B2B 5,388 44,167 (38,779 ) Other 900 35,241 (34,341 ) Total Revenue $ 464,278 $ 226,208 $ 238,070 Total Revenue for fiscal year 2024 increased by $238,070, or 105%, to $464,278 from $226,208 in fiscal year 2023.
Removed
During the year ended August 31, 2023, Other revenue included $35,241 (2022- $87,399) from R&D contracts for exploratory work the Company performed on behalf of third parties interested in our technology.
Added
The primary source of revenue for the Company relates to the licensing of our technology to others. Licensing revenue grew by $311,190, or 212%, to $457,990 in fiscal year 2024 as compared to $146,800 in fiscal year 2023. This increase was attributable to minimum fees related to two license agreements.
Removed
Challenges in the US market for small companies has made it difficult to generate larger revenue streams, irrespective of the use of our technology, with many small companies struggling to exist. On the other hand, revenue generated by licensing our technology to others has grown substantially to reach $146,800 in fiscal 2023 vs only $54,560 in fiscal 2022.
Added
The increase in licensing revenue was partially offset decreases in both the revenue from our B2B processing of intermediary CBD products and other revenues which decreased by $38,779 and $34,341 respectively in fiscal year 2024.
Removed
With proceeds from our underwritten public offering in January of 2021, we were able to direct additional expenditures to the increased focus on studies pertaining to hypertension and anti-viral drugs. Our R&D expenditures for fiscal 2023, at $3,666,721 were nearly double those of fiscal 2022 at $1,842,675. This was in agreement with our internal plans.
Added
These decreases reflected the Company’s emphasis during the year on licensing DehydraTECH to new and existing industry participants to enable enhanced performance of their developmental and commercial stage products.
Removed
In large part, this was due to our ongoing expenditures in preparation for our hypertension-related prospective IND filing; and also because of R&D programs completed in the fields of a human oral nicotine study and animal based DehydraTECH-CBD seizure and diabetes studies. Each of these three areas of study produced positive results.
Added
During the fiscal year ended August 31, 2024, funding constraints limited our ability to direct resources to studies pertaining to weight loss and diabetes. R&D expenditures for fiscal year 2024 decreased by $1,306,156, or 36%, to $2,360,565 from $3,666,721 for fiscal year 2023.
Removed
We decreased advertising and promotional expenditures by $817,363, as we scaled back our efforts 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. Stock-based compensation expense (non-cash) decreased from $752,591 to $170,382 ($582,209), due to fewer options vesting during the year.
Added
The decrease in year-over-year R&D expenditures was driven by completion of studies related to hypertension and anti-viral drugs and a slow-down in activity as we prepared to begin our investigational studies related to GLP-1 and GIP drugs.
Removed
These year-to-year decreases are a significant driver of the year-to-year overall decrease in consulting wages and salaries expense. Travel expenses were also down by $34,678 due primarily to a decrease in participation in industry conferences. Unrealized losses on marketable securities decreased by $542,921 in the year.
Added
R&D expenditures relate primarily to our new investigations into GLP-1 and GIP drugs, along with ongoing expenditures in preparation for our hypertension-related prospective IND filing. To date, Lexaria has been pleased with the results of our investigational studies with DehydraTECH enhanced GLP-1 and GIP drugs.
Removed
We expect to continue to incur significant operational expenses and net losses in the upcoming 12 months and beyond.
Added
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.
Removed
Accordingly, we will be required to obtain significant further funding to achieve this business objective and/or delay or modify the program in accordance with the financial resources available.
Added
Lexaria has been working with its third party regulatory affairs consultant to respond to certain requests of the FDA and amend its protocol accordingly.
Removed
On August 12, 2022, we entered into a sales agreement with Maxim Group LLC, (“Maxim”), pursuant to which we may offer and sell shares of our common stock with an aggregate offering price of up to $5,925,000 under the At-The-Market (“ATM”) Offering.
Added
The increase during Fiscal 2024 relates primarily to higher legal and professional, wages and salaries, and consulting expenses ($367,473, $267,330, and $252,677, respectively); combined with higher advertising and promotional expenditures ($84,187), as we scaled our efforts 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; partially offset by lower depreciation, office expenses, and impairment losses on the Company’s patent portfolio ($69,814, $63,499, and $48,925, respectively).
Removed
The sales agreement provides that Maxim will be entitled to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the ATM Offering. During the fiscal year ended August 31, 2023, 34,652 shares were sold under the ATM for gross proceeds of $114,456.
Added
The increase in consulting expense for the year ended August 31, 2024 relates primarily to separation payments to our Chief Executive Officer, who resigned effective August 31, 2024, but is maintaining his position as Chairman of the Board and as a Strategic Executive Consultant.
Removed
Offering costs netted against proceeds amounted to $125,122 and, as per the terms of the sales agreement, the ATM was terminated July 30, 2023.
Added
As such, during the year ended August 31, 2024, the Company recognized an impairment loss of $57,836 related to those abandoned applications, as compared to $106,731 for the year ended August 31, 2023. Other Income/(Loss) Other Income/(Loss) for fiscal year 2024 decreased by $122,979, or 69%, to a loss of $55,524 from a loss of $178,503 for fiscal year 2023.
Removed
On May 8, 2023, we entered into a placement agency agreement with Maxim, pursuant to which we agreed to sell 2,106,000 units at a price of $0.95 per unit for aggregate gross and net proceeds of $2,000,700 and $1,600,397, respectively.
Added
The change was primarily driven by the fact that fiscal year 2024 unrealized losses on marketable securities of $69,835 were $151,858, or 68%, lower than fiscal year 2023 unrealized losses on marketable securities of $221,693. This is attributable to continuing decreases in the fair value of the Company’s investment in Hill Inc. common shares.
Removed
Each unit was comprised of one share and one warrant, with each warrant being exercisable for a five-year period to purchase an additional share at a price of $0.95. The securities were issued on May 11, 2023, and were registered pursuant to a Form S-1 registration statement filed under number 333-271096.
Added
Our existing cash is not sufficient to complete the full development, testing and commercialization of an FDA approved product candidate.
Removed
There is no certainty that future equity or debt financing will be available or that it will be at acceptable terms and the outcome of these matters is unpredictable. A lack of adequate funding may force us to reduce spending, curtail or suspend planned programs or possibly liquidate assets.
Added
Accordingly, we will be required to obtain significant further funding or reach industry partnerships to achieve this business objective and/or delay or modify the program in accordance with the financial resources available. 29 Table of Contents Sources of Liquidity During the year ended August 31, 2024, the Company has completed the following: · Entered into a Warrant Exercise Agreement on April 30, 2024, to induce an existing accredited investor (the "Investor”) to exercise in full outstanding Common Stock Purchase Warrants (the "Exercise”) to purchase up to an aggregate of 2,917,032 shares of the Company’s common stock (the "Existing Warrant”) for gross proceeds of $4,407,444.
Removed
The increase in net cash used in operating activities during the year ended August 31, 2023 relates primarily to a decrease in non-cash expenses related to common shares issued for services ($1,200,000), stock-based compensation ($582,209) and unrealized loss on marketable securities ($542,921); partially offset by a decrease in our net loss ($671,128) and a decrease in working capital ($494,738).
Added
In consideration for the immediate and full exercise of the Existing Warrant, the Investor received a new unregistered Common Stock Purchase Warrant to purchase up to an aggregate of 2,917,032 shares of the Company’s common stock (the "New Warrant”) with an exercise price of $4.75 per share in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933 (the "Securities Act”).
Added
The New Warrant was issued to the Investor for consideration of $0.125 per share for additional gross proceeds of $364,629. The Company also issued 102,097 warrants with an exercise price of $5.9375 as part of a tail commission.
Added
Placement agent fees and other offering expenses in the amount of $209,796 were netted against the proceeds. · Entered into Securities Purchase Agreements whereby on February 16, 2024, the Company issued 1,444,741 shares of common stock and 113,702 pre-funded warrants in a registered direct offering.
Added
The Company also sold to investors, warrants to purchase up to 1,558,443 shares of common stock. The combined effective offering price for each share of common stock and accompanying warrant was $2.31. The warrants will expire five years from the issuance date, and have an exercise price of $2.185 per share.
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