UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

~~[X]~~

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

For the quarterly period ended~~November 30, 2017~~May 31, 2022

~~[ ]~~

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

For the transition period from ~~__________________________~~[ ] to ~~__________________________~~[ ]

Commission ~~File Number~~ ~~000-52138~~file number

~~LEXARIA BIOSCIENCE CORP.~~
~~(Exact~~
LEXARIA BIOSCIENCE CORP.
(Exact name of registrant as specified in its charter)

Nevada		20-2000871
( State or other jurisdiction of incorporation or ~~organization)~~organization		(~~IRS~~I.R.S. Employer ~~Identification~~ IdentifiCAtion No.)

~~156 Valleyview Rd.,~~ #100 – 740 McCurdy Road, Kelowna BC Canada		V1X ~~3M4~~2P7
~~(Address~~ (Address of principal executive offices)	~~(Zip~~	(Zip Code)

~~250-765-6424~~
(

Registrant’s ~~telephone~~Telephone number, including area ~~code)~~
code: 1.250.765.6424

~~N/A~~
~~(Former name, former address and former fiscal year, if changed since last report)~~

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

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

Indicate by check mark whether the ~~registrant~~registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the ~~past~~last 90 days.
~~[X] YES [ ] NO~~ Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit files). Yes ☒ No ☐

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

Large accelerated filer ~~[ ]~~	☐	Accelerated filer ~~[ ]~~	☐
Non-accelerated ~~filer [ ]~~Filer	~~(Do not check if a smaller reporting company)~~ ☒	Smaller reporting company ~~[X]~~	☒
		Emerging growth company	☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange ~~Act~~
~~[ ] YES [X] NO~~Act). Yes ☐ No ☒

~~APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY~~
~~PROCEEDINGS DURING THE PRECEDING FIVE YEARS~~

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.
~~[ ] YES [ ] NO~~

~~APPLICABLE ONLY TO CORPORATE ISSUERS~~

Indicate the number of shares outstanding of each of the ~~issuer’s~~registrant’s classes of common stock as of the latest practicable date.
~~70,319,707~~

5,950,998 common shares ~~issued and outstanding~~ as of ~~January 12,~~~~2017~~July 13, 2022

DOCUMENTS INCORPORATED BY REFERENCE

None.

TABLE OF CONTENTS

PART I—FINANCIAL INFORMATION		3

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Controls and Procedures	29

PART II—OTHER INFORMATION		31

Item 1.	Legal Proceedings	31

Item 1A.	Risk Factors	31

Item 2.	Exhibits	31

Page 2 of 33

PART ~~1 –~~ I—FINANCIAL INFORMATION

Item 1. Financial ~~Statements.~~Statements

LEXARIA BIOSCIENCE CORP.
CONSOLIDATED BALANCE SHEET
(Expressed in U.S. Dollars)
	May 31,			August 31,
	2022			2021
ASSETS	(Unaudited)			(Audited)
Current
Cash	$	7,051,083		$	10,917,797
Marketable securities		288,032			833,841
Accounts receivable		154,868			342,401
Inventory		40,183			29,648
Prepaid expenses and deposit		757,308			319,253
Total Current Assets		8,291,474			12,442,940

Non-current assets, net
Lease right of use		62,363			91,041
Intellectual property		440,675			364,623
Property & equipment		343,431			368,213
Total Non-current Assets		846,469			823,877
TOTAL ASSETS	$	9,137,943		$	13,266,817

LIABILITIES
Current
Accounts payable and accrued liabilities	$	157,095		$	105,946
Loan payable		7,906			7,926
Lease payable		41,825			39,404
Total Current Liabilities		206,826			153,276

Long Term
Lease payable		18,339			49,989
Total Long Term Liabilities		18,339			49,989
TOTAL LIABILITIES		225,165			203,265

STOCKHOLDERS' EQUITY
Share Capital
Authorized:
220,000,000 common voting shares with a par value of $0.001 per share Issued and outstanding: 5,950,998 common shares at May 31, 2022 and 5,726,699 common shares at August 31, 2021		5,951			5,727
Additional paid-in capital		46,808,608			45,089,114
Deficit		(37,631,063	)		(31,829,204	)
Equity attributable to shareholders of the Company		9,183,496			13,265,637
Non-controlling Interest		(270,718	)		(202,085	)
Total Stockholders' Equity		8,912,778			13,063,552
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	9,137,943		$	13,266,817

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

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LEXARIA BIOSCIENCE CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Expressed in U.S. Dollars, except number of shares)

Three Months Ended

Nine Months Ended

May 31,

2022

2021

2022

2021

(Unaudited)

Revenue

99,717

204,055

144,247

691,717

Cost of goods sold

18,635

59,989

30,592

155,037

Gross profit

81,082

144,066

113,655

536,680

Expenses

Research and development

752,095

454,443

1,486,487

823,102

General and administrative

1,747,325

2,256,175

4,497,660

4,097,765

Total operating expenses

2,499,420

2,710,618

5,984,147

4,920,867

Loss from operations

(2,418,338

)

(2,566,552

)

(5,870,492

)

(4,384,187

)

Gain on disposal of assets

1,522,704

Discontinued operations

(22,000

)

Net and comprehensive loss for the period

(2,418,338

)

(2,566,552

)

(5,870,492

)

(2,883,483

)

Net and comprehensive loss attributable to:

Common shareholders

(2,382,925

)

(2,556,997

)

(5,801,859

)

(2,848,914

)

Non-controlling interest

(35,413

)

(9,555

)

(68,633

)

(34,569

)

Basic and diluted loss per share

Continuing operations

(0.41

)

(0.50

)

(1.00

)

(0.70

)

Discontinued operations

(0.01

)

(0.41

)

(0.50

)

(1.00

)

(0.71

)

Weighted average number of common shares outstanding

- Basic and diluted

5,950,998

5,104,332

5,863,086

4,056,755

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

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LEXARIA BIOSCIENCE CORP.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Expressed in U.S. Dollars)

	Nine Months Ended
	May 31,
	2022			2021
	(Unaudited)
Cash flows used in operating activities
Net loss and comprehensive loss	$	(5,870,492	)	$	(2,861,483	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation		519,718			410,007
Depreciation and amortization		77,986			83,788
Inventory write-off		0			2,482
Bad debt expense		0			37,000
Non-cash right of use lease expense		28,678			26,665
Gain on disposal of assets		0			(1,522,704	)
Unrealized loss on marketable securities		823,916			86,810
Shares issued for services		600,000			0
Warrants issued for services		0			785,895
Lease accretion		4,166			6,179
Change in working capital
Accounts receivable		(90,574	)		(1,106	)
Inventory		(9,196	)		71,976
Prepaid expenses and deposits		161,945			11,656
Accounts payable and accrued liabilities		56,352			86,981
Due to related parties		(5,223	)		(57,380	)
Deferred revenue		0			(44,255	)
Net cash used in operating activities	$	(3,702,724	)	$	(2,877,489	)

Cash flows used in investing activities
Disposal (acquisition) of assets		(49,188	)		273,375
Intellectual property		(81,407	)		(79,493	)
Net cash (used in) provided by investing activities	$	(130,595	)	$	193,882

Cash flows from financing activities
Repayment of loan payable		0			(23,163	)
Lease payments		(33,395	)		(32,962	)
Proceeds from issuance of equity		0			9,471,495
Net cash provided by (used in) financing Activities	$	(33,395	)	$	9,415,370

Net cash provided by discontinued operations	$	0		$	83,000

Net change in cash for the period		(3,866,714	)		6,814,763
Cash at beginning of period		10,917,797			1,293,749
Cash at end of period	$	7,051,083		$	8,108,512

Supplemental information of cash flows:
Income taxes paid in cash	$	0		$	3,450
Non-cash consideration on asset disposal	$	0		$	1,171,599
Non-cash shares for services included in prepaid expenses	$	600,000		$	0

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

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LEXARIA BIOSCIENCE CORP.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Expressed in U.S. Dollars, except number of shares)
					(Unaudited)

					ADDITIONAL								TOTAL
	SHARE CAPITAL				PAID-IN								STOCKHOLDERS'
	SHARES		AMOUNT		CAPITAL		DEFICIT			NCI			EQUITY
			$		$		$			$			$
Balance August 2020		3,001,476		3,001		30,324,398		(27,802,198	)		(42,943	)		2,482,258
Stock based compensation		-		0		48,887		0			0			48,887
Net loss		-		0		0		(696,028	)		0			(696,028	)
Non-controlling interest		-		0		0		0			(14,093	)		(14,093	)
Balance November 30, 2020		3,001,476		3,001		30,373,285		(28,498,226	)		(57,036	)		1,821,024
Stock based compensation		-		0		17,154		0			0			17,154
Brokered placement		2,102,856		2,104		9,469,393		0			0			9,471,497
Net Income		-		0		0		404,111			0			404,111
Non-controlling interest		-		0		0		0			(10,921	)		(10,921	)
Balance February 28, 2021		5,104,332		5,105		39,859,832		(28,094,115	)		(67,957	)		11,702,865
Stock based compensation		-		0		343,966		0			0			343,966
Warrants issued for services		-		0		785,895		0			0			785,895
Net loss		-		0		0		(2,556,997	)		0			(2,556,997	)
Non-controlling interest		-		0		0		0			(9,555	)		(9,555	)
Balance May 31, 2021		5,104,332		5,105		40,989,693		(30,651,112	)		(77,512	)		10,266,174
Exercise of warrants		610,189		610		4,014,433		0			0			4,015,043
Shares issued for services		12,178		12		84,988		0			0			85,000
Net loss		-		0		0		(1,178,092	)		0			(1,178,092	)
Non-controlling interest		-		0		0		0			(124,573	)		(124,573	)
Balance August 31, 2021		5,726,699		5,727		45,089,114		(31,829,204	)		(202,085	)		13,063,552
Stock based compensation		-		0		408,544		0			0			408,544
Net loss		-		0		0		(1,993,157	)		0			(1,993,157	)
Non-controlling interest		-		0		0		0			(10,325	)		(10,325	)
Balance November 30, 2021		5,726,699		5,727		45,497,658		(33,822,361	)		(212,410	)		11,468,614
Shares issued for services		224,299		224		1,199,776		0			0			1,200,000
Net loss		-		0		0		(1,425,777	)		0			(1,425,777	)
Non-controlling interest		-		0		0		0			(22,895	)		(22,895	)
Balance February 28, 2022		5,950,998		5,951		46,697,434		(35,248,138	)		(235,305	)		11,219,942
Stock based compensation		-		0		111,174		0			0			111,174
Net loss		-		0		0		(2,382,925	)		0			(2,382,925	)
Non-controlling interest		-		0		0		0			(35,413	)		(35,413	)
Balance May 31, 2022		5,950,998		5,951		46,808,608		(37,631,063	)		(270,718	)		8,912,778

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

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LEXARIA BIOSCIENCE CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2022

(Expressed in U.S. Dollars)

1. Nature of Business

Lexaria Bioscience Corp.’s (“Lexaria”, “we”, “our” or the “Company”) is a biotechnology company pursuing the enhancement of the bioavailability of a diverse and broad range of active pharmaceutical ingredients (“APIs”) using our patented drug delivery technology DehydraTECH^TM. Through continued validation of our research and development our focus is on national and international applications for DehydraTECH.

Revenues are primarily derived from licensing fees for the use of the Company’s patented technology to partners who pay either a fee to use DehydraTECH in the manufacturing of their own products or through the purchase of DehydraTECH manufactured products made to their specifications by Lexaria. The Company has relationships with several consumer products companies in the CBD and nutraceuticals spaces that use Lexaria’s technology in consumer goods being sold online and at retailers in the US and Canada.

The Company is headquartered in Kelowna, British Columbia, Canada. The corporate website is www.lexariabioscience.com

Going Concern Analysis

The Company’s consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with accounting principles generally accepted in the United States (“US GAAP”) applicable to a going concern which assumes the Company will have sufficient funds to pay it operational, research and development and capital expenditures for a period of at least 12 months from the date this financial report.

Since inception, the Company has incurred significant operating and net losses. The losses attributable to common shareholders were $4.2m, $4.1m and $4.2m for the years ended August 31, 2021, 2020 and 2019, respectively. As of May 31, 2022, we had an accumulated deficit of $37.6m. We expect to continue to incur significant operational expenses and net losses in the upcoming 12 months. 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 on the licencing of our technology, if any, and the receipt of payments under any current or future collaborations we may enter.

On January 12, 2021, the Company closed an underwritten public offering for net proceeds of $9,471,497. In the fourth quarter of the year ended August 31, 2021, the Company received $4,015,043 from the exercise of warrants.

Until the Company is able to generate significant product revenue, operations will be supported with equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. We may offer additional securities for sale during fiscal year 2022 or thereafter 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 and is in the best interests of our stockholders. The Company has the option to raise up to one-third of its aggregate market value of its common equity held by non-affiliates through the issuance of securities pursuant to a Registration Statement on Form S-3 (333-262402) as filed with the SEC on January 28, 2022 and declared effective on February 4, 2022.

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To date, we have obtained cash and funded our operations primarily through equity financings and license agreements. In order to continue the development of our drug candidates, at some point in the future we expect to pursue one or more capital transactions, whether through the sale of equity securities, debt financing, license agreements or entry into strategic partnerships. There can be no assurance that we will be able to continue to raise additional capital in the future.

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 May 31, 2022, the Company had cash of approximately $7.0m. We believe this is sufficient to enable the Company to fund its operating and R&D expenses and any capital expenditure requirements through one year from the issuance date of these unaudited consolidated financial statements.

COVID-19

Impacts of COVID-19 Pandemic

The emergence of the COVID-19 pandemic in 2020 continues to present uncertainty and unforecastable new risks to the Company and its business plans. As of May 31, 2022, there has been no material impact on the Company’s financial position as a direct result of the pandemic. However, the Company has experienced some supply chain disruptions and shortages in the procurement of ingredients and supplies used in both our R&D activities and production. Management views this situation as transitory but cannot predict the length of time it may take for these disruptions to dissipate or if there will be a significant economic effect on the Company’s operations. In the interim, it may cause delays in carrying out our research studies and in our production schedules.

Restrictions on international travel presents a challenge in carrying out normal business activities related to corporate finance efforts and the pursuit of new customers throughout North America who might otherwise access the retail products of our licensees. As a result, the pandemic has increased the risk of lower revenues and higher losses.

During the year ended August 31, 2020, we received C$30,732 in COVID relief under the Canada Emergency Wage Subsidy programs for employees which reduced our employment costs in that year. During fiscal 2020 we also received C$40,000 from the Canadian Government sponsored Emergency Business Account loan program. As specified by the terms of this program, we repaid C$30,000 of the loan in fiscal 2021. The remaining $7,906 (C$10,000) of the loan payable is anticipated to be forgiven as directed under this program in the year ended August 31, 2023.

We continue to actively monitor the evolving effects of COVID-19 and may take further actions that alter our operations, including those that may be required by federal, state, provincial, or local authorities, or that we determine are in the best interests of our employees and third parties with which we do business.

The economic effect of the pandemic combined with increased geopolitical uncertainty and rising inflation is expected to have an impact on the Company’s future reporting periods. The effects are difficult to predict and could result in material financial impact on the Company’s financial results.

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2. Significant Accounting Policies

The significant accounting policies of the Company are consistent with those of our audited financial statements on Form 10-K for the year ended August 31, 2021.

3. Basis of Consolidation

These interim consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries; Lexaria CanPharm ULC, Lexaria CanPharm Holdings Corp., PoViva Corp., Lexaria Hemp Corp., Kelowna Management Services Corp., and Lexaria Pharmaceutical Corp., and our 83.333% owned subsidiary Lexaria Nicotine LLC (16.667% Altria Ventures Inc., an indirect wholly owned subsidiary of Altria Group, Inc.). All significant intercompany balances and transactions have been eliminated upon consolidation.

4. Basis of Presentation

The Company’s unaudited interim consolidated financial statements ~~for~~have been prepared pursuant to the ~~three month period ended November 30, 2017, form part~~rules and regulations of ~~this quarterly report. They are stated~~the Securities and Exchange Commission. Certain information and footnote disclosures normally included in ~~United States Dollars and are~~annual financial statements prepared in accordance with United States generally accepted accounting ~~principles.~~principles (US GAAP) have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of results for a full year or any subsequent period.

~~LEXARIA BIOSCIENCE CORP.~~
~~CONSOLIDATED BALANCE SHEETS~~
~~(Expressed~~

These unaudited interim consolidated financial statements should be read in ~~U.S. Dollars)~~
conjunction with the audited consolidated annual financial statements and notes thereto included in our annual report filed on Form 10-K for the year ended August 31, 2021.

November 30 August 31
2017 2017
(Unaudited)
ASSETS
Current
Cash $ 2,209,703 $ 2,533,337
Accounts and other receivables (Note 7) 71,923 45,293
Inventory (Note 8) 77,436 67,174
Prepaid expenses and deposit 58,140 149,691
Total Current Assets 2,417,202 2,795,495
Patents (Note 9) 78,321 62,827
Equipment 1,702 1,856
80,023 64,683
TOTAL ASSETS $ 2,497,225 $ 2,860,178

LIABILITIES
Current
Accounts payable and accrued liabilities $ 59,854 $ 32,574
Unearned revenue (Note 10) 10,833 17,083
Due to related parties (Note 14) 25,018 42,690
Total Current Liabilities 95,705 92,347
TOTAL LIABILITIES 95,705 92,347

STOCKHOLDERS' EQUITY
Share Capital
     Authorized:
     220,000,000 common voting shares with a par value of $0.001 per share
     Issued and outstanding: 69,435,198 common shares at November 30, 2017
��    and 67,975,761 common shares at August 31, 2017 69,435 67,976
Additional paid-in capital 16,080,737 16,108,270
Deficit (13,748,652 ) (13,169,939 )
Equity attributable to shareholders of the Company 2,401,520 3,006,307
Non-Controlling Interest - (238,476 )
Total Stockholders' Equity 2,401,520 2,767,831
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,497,225 $ 2,860,178

5. Estimates and Judgments

The ~~accompanying~~preparation of financial statements in conformity with US GAAP requires us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Some of the Company’s accounting policies require us to make subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. These accounting policies involve critical accounting estimates because they are particularly dependent on estimates and assumptions made by management about matters that are highly uncertain at the time the accounting estimates are made. Although we have used our best estimates based on facts and circumstances available to us at the time, different estimates reasonably could have been used. Changes in the accounting estimates used by the Company are reasonably likely to occur from time to time, which may have a material effect on the presentation of financial condition and results of operations.

The Company reviews these estimates, judgments, and assumptions periodically and reflect the effects of revisions in the period in which they are deemed to be necessary. Although we believe that these estimates are reasonable actual results could differ.

In preparing these unaudited interim consolidated financial statements, the significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those applied to the audited consolidated financial statements for the year ended August 31, 2021.

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6. Recent Accounting Guidance

Pronouncements Issued but Not Yet Adopted

In October of 2021, the Financial Accounting Standards Board (FASB) issued an update to Government Assistance (Topic 832) to increase the transparency of government assistance and its disclosure in the notes ~~are~~to the financial statements. Amendments in this update take effect for annual periods beginning after December 31, 2021. Early application of the amendments is permitted. The Company does not expect the adoption of these standards to have a material impact on its consolidated financial statements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2023. These standards require that credit losses be reported using an ~~integral part~~expected losses model rather than the incurred losses model that is currently used, and establishes additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, these standards now require allowances to be recorded instead of reducing the amortized cost of the investment. These standards limit the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. The Company does not currently expect the adoption of these standards to have a material impact on its consolidated financial statements.

~~LEXARIA BIOSCIENCE CORP.~~
~~CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited)~~
~~(Expressed~~

7. Accounts and Other Receivables

May 31,

August 31,

2022

2021

$

$

Trade and deposits receivable

51,251

16,553

Sale of assets – shares receivable

0

278,107

Sales tax receivable

103,617

47,741

154,868

342,401

8. Inventory

May 31,

August 31,

2022

2021

$

$

Raw materials

31,366

29,648

Work in progress

8,817

0

40,183

29,648

9. Intellectual Property

Patent costs: all non-US based patent-related costs incurred in ~~U.S. Dollars, except number~~connection with preparing, filing, maintaining and prosecuting patent applications are expensed as incurred due to the uncertainty in the recovery of ~~shares)~~

THREE MONTHS ENDED
November 30 November 30
2017 2016
Revenue (Note 13) 24,635 9,225
Cost of Goods Sold (6,099 ) (888 )
Gross profit 18,536 8,337

Expenses
Accounting and audit 17,691 6,099
Depreciation and Amortization (Note 9) 375 372
Insurance 4,645 5,180
Advertising and promotions 188,999 11,928
Bank charges and exchange loss 5,691 75
Consulting (Note 16) 142,166 296,267
Interest expense - 1,355
Investor relations 188 23,717
Legal and professional 59,903 9,996
Office and miscellaneous 35,820 23,376
Research and development 110,392 7,261
Travel 27,833 19,840
Inventory write-off (Note 8) 3,546 3,424
597,249 408,890
Net loss and comprehensive loss for the period (578,713 ) (400,553 )
Net loss and comprehensive loss attributable to:
Common shareholders (578,713 ) (395,445 )
Non-controlling interest(Note 9) - (5,108 )
Basic and diluted loss per share (0.01 ) (0.01 )
Weighted average number of common sharesoutstanding
- Basic and diluted 68,635,596 51,690,855

~~The accompanying notes~~the expenditures. Amounts incurred are ~~an integral part of these consolidated financial statements.~~

~~LEXARIA BIOSCIENCE CORP.~~
~~CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)~~
~~(Expressed~~classified in ~~U.S. Dollars)~~
general and administrative expenses.

THREE MONTHS ENDED
November 30 November 30
2017 2016
Cash flows used in operating activities
Net loss for the period (578,713 ) (400,553 )
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation - 27,104
Depreciation and amortization 375 372
Inventory write-off 3,546 3,424
Shares issued for services - 43,760
Warrants issued for services - 107,803
Change in working capital:
Accounts and other receivables (26,630 ) 82,028
Inventory (13,808 ) (19,062 )
Prepaid expenses and deposit 91,551 (2,032 )
Accounts payable and accrued liabilities 27,280 898
Due to related parties (17,672 ) 46,621
Unearned revenue (6,250 ) 8,650
Net cash used in operating activities (520,321 ) (100,987 )

Cash flows used in investing activities
Investment in Poviva (70,000 ) -
Patent (15,715 ) (13,684 )
Net cash used in investing activities (85,715 ) (13,684 )

Cash flows from financing activities
Repayment of loan to a related party - (4,500 )
Proceeds from issuance of equity 282,402 150,008
Net cash from financing activities 282,402 145,508

Increase (decrease) in cash (323,634 ) 30,837
Cash, beginning of period 2,533,337 93,409
Cash, end of period 2,209,703 124,246
Supplemental information of cash flows:
Interest paid in cash - 1,355
Subscription funds receivable - 600,000
Common shares issued to settle accounts payable - 17,000
Stock based compensation recognized in prepaid expenses - 9,537
Reclassification of NCI to additional paid in capital on acquisition 238,476 -

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

~~LEXARIA~~~~BIOSCIENCE~~~~CORP.~~
~~CONSOLIDATED~~~~STATEMENTS~~ OF~~STOCKHOLDERS'~~~~EQUITY~~
~~(Expressed~~ ~~in U.S.~~~~Dollars)~~

COMMON STOCK

ADDITIONAL TOTAL
PAID-IN STOCKHOLDERS’
SHARES AMOUNT CAPITAL DEFICIT NCI EQUITY
$ $ $ $ $
Balance, August 31, 2016 51,288,477 51,288 11,515,419 (11,300,662 ) (178,288 ) 87,757
Shares issued for services 939,354 938 223,722 - - 224,660
Non-controlling Interest - - - - (60,188 ) (60,188 )
Stock based compensation (Note 12) - - 93,968 - - 93,968
Private placement of shares, net of issuance cost 4,104,280 4,105 1,537,637 - - 1,541,742
Warrants issued for services - - 292,750 - - 292,750
Exercise of stock options 1,014,125 1,015 176,247 - - 177,262
Exercise of warrants 10,322,025 10,322 2,222,710 - - 2,233,032
Conversion of debt 307,500 308 45,817 - - 46,125
Net loss and comprehensive loss - - - (1,869,277 ) - (1,869,277 )
Balance August 31, 2017 67,975,761 67,976 16,108,270 (13,169,939 ) (238,476 ) 2,767,831
Non-controlling Interest (Note 9) - - (308,476 ) - 238,476 (70,000 )
Exercise of stock options 55,000 55 12,446 - - 12,501
Exercise of warrants 1,404,437 1,404 268,497 - - 269,901
Net loss and comprehensive loss - - - (578,713 ) - (578,713 )

Balance, November 30, 2017 (Unaudited) 69,435,198 69,435 16,080,737 (13,748,652 ) - 2,401,520

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

~~LEXARIA BIOSCIENCE CORP.~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

~~November 30, 2017~~

~~(Expressed in U.S. Dollars)~~

~~(Unaudited)~~Page 10 of 33

1.	~~Basis of Presentation~~
	Table of Contents

All related costs for US patents are recognized as Intellectual Property. When a US patent is granted, it is amortized over the remaining useful life. Any subsequent costs incurred for a US granted capitalized patent are expensed as incurred.

The following is a list of US capitalized patents held by the Company:

Issued Patent #	The unaudited interim consolidated financial statements for the three months ended November 30, 2017 included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with United States generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments considered necessary for a fair presentation have been included.Patent Certificate Grant Date	Patent Family

US 9,474,725 B1	~~These unaudited interim consolidated financial statements should be read in conjunction with the August 31, 2017 audited annual financial statements and notes thereto.~~10/25/2016

2.	~~Organization, Business and Going Concern~~

		Lexaria Biosciences Corp. (“Lexaria”, or the “Company”) Company was formed on December 9, 2004 under the laws of the State of Nevada as an independent oil and gas company engaged in the exploration, development and acquisition of oil and gas properties in the United States and Canada. In March of 2014, the Company began its entry into the bioscience and alternative health and wellness business and discontinued its involvement in the oil and gas business in November 2014. In May 2016, the Company also commenced out- licensing its patented technology for improved delivery of bioactive compounds that promotes healthy ingestion methods, lower overall dosing and higher effectiveness in active molecule delivery. The Company has its office in Kelowna, BC, Canada.

		On November 2, 2017, the Company announced it acquired 100% ownership interest in its majority owned subsidiary PoViva Tea, LLC. The Company previously owned a 51% interest in PoViva Tea, LLC and acquired the remaining 49% interest. Compensation was $70,000, a waiver on certain debts, and a 5%, 20-year royalty on net profits of ViPova Tea^TMtea, coffee, and hot chocolate sales. No Lexaria stock or options were issued. The 20-year royalty was determined to have a $Nil fair value as PoViva operates at a loss and future profitability is uncertain.

		The Company’s unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has a net loss of $578,713 for the three months ended November 30, 2017 (2016: $400,553) and had a deficit accumulated since its inception of $13,748,652 (August 31, 2017: $13,169,939). The Company had a working capital balance of $2,321,497 as at November 30, 2017 with net cash used in operating activities of $520,321 during the three months ended November 30, 2017.

		The Company requires additional funds to maintain its operations and developments. Management’s plans in this regard are to raise equity and debt financing as required, but there is no certainty that such financing will be available or that it will be available at acceptable terms. The outcome of these matters cannot be predicted at this time.

3.	~~Business Risk and Liquidity~~

	The Company is subject to several categories of risk associated with its operating activities. The production and sale of alternative health products is an emerging industry in which business practices are not yet standardized and are subject to frequent scrutiny and evaluation by federal, state, provincial, and municipal authorities, academics, and media outlets, among others. Although we intend to develop our businesses in accordance with best ethical practices, we may suffer negative publicity if we, our partners, contractors, or customers are found to have engaged in any environmentally insensitive practices or other business practices that are viewed as unethical.

	Our operations may require licenses and permits from various governmental authorities. We believe that we will be able to obtain all necessary licenses and permits under applicable laws and regulations for our operations and believe we will be able to comply in all material respects with the terms of such licenses and permits. However, such licenses and permits are subject to change in various circumstances. There can be no guarantee that we will be able to obtain or maintain all necessary licenses and permits, and failing to obtain or retain required licenses could have a materially adverse effect on the Company.

	Lexaria and its subsidiaries are not involved directly or indirectly in the cultivation, processing, distribution, or utilization of Cannabis or Cannabis derived components. All of Lexaria’s consumer products utilize legally sourced Hemp and Hemp components in their production. Lexaria does have an ancillary involvement risk via out-licensing of its patented technology to licensees that choose to utilize its technology to manufacture products that contain locally or state approved but federally regulated and controlled contents. There can be no guarantee that changes in the regulatory framework and environment will not occur and such changes could have a materially adverse effect on the Company. It is possible some jurisdictions may even interpret Lexaria’s ancillary involvement as in contravention with regulations.

4.	~~Basis of Consolidation~~

	The unaudited interim consolidated financial statements include the financial statements of the Company, its wholly-owned subsidiary, Lexaria CanPharm Corp. which was incorporated on April 4, 2014 under the laws of Canada, and wholly-owned subsidiary PoViva Tea, LLC (2017 - 51% owned) which was incorporated on December 12, 2014, under the laws of the State of Nevada, and the 50%-owned subsidiary Ambarii Trade Corporation, which has no assets or liabilities, that was incorporated on April 24, 2017 under the laws of the Province of British Columbia. All significant inter-company balances and transactions have been eliminated.

5.	~~Estimates and Judgments~~

	The preparation of financial statements in conformity with U.S GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, and expenses. The estimates and the associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

	In preparing these unaudited interim consolidated financial statements, the significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements for the year ended August 31, 2017.

6.	~~Recent Accounting Guidance Not Yet Adopted~~

	In May 2014, the Financial Accounting Standards Board (the “FASB”) issued a new standard related to the revenue recognition. Under the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has recently issued several amendments to the standards, including clarification on the accounting for licenses of intellectual property and identifying performance obligations.

	The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The Company will apply the full retrospective approach to adopt the standard but does not anticipate that this standard will have a material impact on its consolidated financial statements.

	In January 2016, FASB issued a new standard to amend certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Most prominent among the amendments is the requirement for changes in fair value of equity investments, with certain exceptions, to be recognized through profit or loss rather than other comprehensive income. The new standard will be effective for the Company beginning September 1, 2018. The standard is not expected to have any impact on the Company’s financial statements.

	In February 2016 FASB issued ASU No. 2016-02, Leases (Topic 842) which supersedes FASB ASC Topic 840, Leases (Topic 840) and provides principles for the recognition, measurement, presentation, and disclosure of leases for both lessees and the lessors. The new standard requires the lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. The classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The standard is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted upon issuance. When adopted, the Company does not expect this guidance to have a material impact on its consolidated financial statements.

	In June 2016, the FASB issued a new standard to replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broarder range of reasonable and supportable information to inform credit loss credit loss estimates. For trade and other receivables, loans and other financial instruments, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. Credit losses relating to available for sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. The new standard will be effective for Lexaria beginning September 1, 2020, with early adoption permitted. Application of the amendments is through a cumulative-effect adjustment to deficit as of the effective date. The Company is currently assessing the impact of the standard on its consolidated financial statements.

7.	~~Accounts and Other Receivables~~

November 30 August 31
2017 2017
$ $
Trade and deposits receivable 1,553 1,778
Territory License Fee receivable (Note 10) 10,000 -
Sales tax receivable 60,370 43,515
71,923 45,293

8.	~~Inventory~~

November 30 August 31
2017 2017
$ $
Raw materials 36,040 14,220
Finished goods 30,708 42,266
Work in progress 10,688 10,688
77,436 67,174

	~~During the three months ended November 30 2017, the Company wrote down $3,546 (2016 - $3,424) of inventory to reflect its net realizable value.~~

9.	~~Alternative Health Products~~

	On November 12, 2014, the Company signed an agreement with Poppy’s Teas LLC (“PoViva”) and acquired 51% of ViPova™. On November 2, 2017, Lexaria announced that it acquired a 100% ownership interest in PoViva Tea, LLC, via cash compensation of $70,000, a waiver on certain debts owed to Lexaria, and a 5%, 20- year royalty on net profits of ViPova Tea^TMtea, coffee, and hot chocolate sales. No Lexaria stock or options were issued. The 20-year royalty was determined to have a $Nil fair value as PoViva operates at a loss and future profitability is uncertain.

	On August 11, 2015, Lexaria signed a license agreement with PoViva Tea LLC for $10,000, granting Lexaria a 35-year non exclusive worldwide license to unencumbered use of PoViva Tea LLC’s IP Rights, including rights of resale. This license agreement ensures Lexaria has full access to the underlying patent pending infusion Technology.

~~Issued Patent #~~	~~Patent~~ ~~Issuance Date~~	~~Patent Family~~
~~9474725~~	~~10/25/2016~~	Food and Beverage Compositions Infused With Lipophilic Active Agents and Methods of Use Thereof
US ~~9839612~~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
US 11,311,559	04/26/2022	Compositions and Methods for Enhanced Delivery of Antiviral Agents

~~The~~

A continuity schedule for capitalized patents is presented below:

Patents
	May 31,			August 31,
	2022			2021
	$			$
Balance – beginning		364,623			292,000
Addition		81,407			79,493
Amortization*		(5,355	)		(6,870	)
Balance – ending		440,675			364,623

*Patents are amortized over their legal life of 20 years.

~~Patents~~

November 30 August 31
2017 2017
$ $
Balance – Beginning 62,827 53,997
Additions 15,715 9,699
Amortization (221 ) (869 )
Balance – Ending 78,321 62,827

October 19, 2017, the Company received a new Notice of Allowance from the United States Patent and Trademark Office (“USPTO”) for the use of its technology as a delivery platform for all cannabinoids including THC; fat soluble vitamins; non steroidal anti-inflammatory pain medications (“NSAIDs”); and nicotine. Lexaria expects formal patent issuance within three to four months which is expected to provide protection until at least 2035. The patent application number is 15/225,799, “Food and Beverage Compositions Infused With Lipophilic Active Agents and Methods of Use Thereof” and on December 12, 2017, Lexaria received patent US 9839612 B2 for this application.

~~10.~~	~~Unearned Revenue~~

Page 11 of 33
On May 14, 2016, the Company entered into a licensing agreement (the “Licensing Agreement”) with an arm’s length party (the “Licensee”) allowing the Licensee, for a two-year period, to utilize the Company’s Technology to create, test, manufacture, and sell marijuana-infused consumable and/or topical products, in the state of Colorado, with an option of extending the terms of the Licensing Agreement to Washington, Oregon, and California (the “Territorial License”). In addition to the granting of the license, the Company is required to provide support services to the Licensee in connection with the use of the Company’s Technology during the term of the Licensing Agreement.
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10. Property & Equipment

Nine Months Ended	Cost		Period Amortization			Additions		Accumulated Amortization			Net Balance May 31, 2022
May 31, 2022	$		$			$		$			$
Leasehold improvements		259,981		(40,528	)		0		(181,176	)		78,805
Computers		63,964		(8,691	)		6,817		(60,241	)		10,540
Furniture fixtures & equipment		31,126		(4,813	)		0		(21,233	)		9,893
Lab equipment		291,235		(19,874	)		42,375		(89,417	)		244,193
		646,306		(73,906	)		49,192		(352,067	)		343,431

For the nine months ended May 31, 2022, amortization of $1,339 (May 31, 2021 - $9,325) was included in the cost of goods sold.

Year Ended	Cost		Period Amortization			Disposal			Accumulated Amortization			Net Balance August 31, 2021
August 31, 2021	$		$			$			$			$
Leasehold improvements		259,981		(54,038	)		0			(140,648	)		119,333
Computers		63,964		(19,681	)		0			(51,550	)		12,414
Furniture fixtures & equipment		34,220		(6,417	)		(3,094	)		(16,420	)		14,706
Lab equipment		291,235		(35,008	)		0			(69,475	)		221,760
		649,400		(115,144	)		(3,094	)		(278,093	)		368,213

11. Accounts Payable and Accrued Liabilities

	May 31		August 31,
	2022		2021
	$		$
Accounts Payable
Trades payable		90,047		54,668
Sales tax payable		47,598		0
Related party payable		5,599		5,223
Accrued Liabilities
Corporate tax payable		0		1,055
Trades payable		13,851		45,000
Balance		157,095		105,946

12. Common Shares and Warrants

In December of 2021, the Company entered a one-year media outreach agreement to SRAX Inc. and issued 224,299 shares as consideration for an aggregate value of $1.2m of which $600,000 are included in prepaid expenses and deposits.

Page 12 of 33

The Company determined that the provision of the support services is a separate deliverable under the licensing agreement. As the support services will not be sold on a stand-alone basis, the Company is unable to establish a vendor-specific objective evidence of fair value of such services to be able to objectively allocate the Territory License fee receipts between the license and the support services. Accordingly, the Company recognizes revenue pro-rated basis over the term of the Licensing agreement. During the three months ended November 30, 2017, the Company recognized $16,250 (Note 13), $6,250 of pro-rated income and $10,000 of additional Licensing Fees. As at November 30, 2017, a total of $10,000 in License Fees are receivable from the Licensee (August 31, 2017 - $Nil).

November 30 August 31
2017 2017
$ $
Balance – Beginning 17,083 12,500
Territorial License fees received - 30,000
Advance payments on product sales - 4,900
Earned revenue (6,250 ) (30,317 )
Balance - Ending 10,833 17,083

~~11.~~	~~Common Shares and Warrants~~
Table of Contents

During the quarter ended May 31, 2022, the Company issued no warrants. A continuity schedule for warrants is presented below:

	Number of Warrants			Weighted Average Exercise Price $
Balance August 31, 2020		471,608			16.77
Cancelled/expired		(44,161	)		67.50
Exercised		(610,189	)		6.58
Issued		2,630,017			6.58
Balance August 31, 2021		2,447,275			8.00
Cancelled/expired		(25,292	)		4.57
Balance May 31, 2022		2,421,983			8.04

A summary of warrants outstanding as of May 31, 2022, is presented below:

# of Warrants	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price $
7,500	0.43 years	24.00
100,000	1.88 years	9.00
200,000	1.88 years	7.00
51,814	2.46 years	36.00
8,984	2.50 years	36.00
16,667	2.79 years	9.00
317,190	2.95 years	10.50
1,719,828	3.63 years	6.58
2,421,983	3.28 years	8.04

13. Stock Options

The Company has established the Equity Incentive Plan whereby the board of directors may, from time to time, grant stock options up to the equivalent of 10% of the number of common shares issued and outstanding to directors, officers, employees, and consultants. Stock options granted must be exercised within five years from the date of grant or such lesser period as determined by the Company’s board of directors. The exercise price of an option is equal to or greater than the closing market price of the Company’s common shares on the day preceding the date of grant. The vesting terms of each grant are set by the board of directors.

During the quarter ended May 31, 2022, the Company granted 36,700 options at a strike price of $3.39 with a contractual life of 5 years. These options were awarded to employees, directors and contractors.


Page 13 of 33
*~~Fiscal 2018 Activity~~*
	Table of Contents
	On September 22, 2017, the Company received $93,750 from the exercise of warrants previously granted. The warrants were exercised at the price of $0.15, for a total of 625,000 common shares being issued.

A continuity schedule for stock options is presented below:

	Options			Weighted Average Exercise Price $		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value $
Balance August 31, 2020		171,604			11.17
Cancelled/expired		(50,334	)		10.76
Granted		84,900			5.41
Balance August 31, 2021		206,170			8.90
Cancelled		(3,334	)		9.60
Granted		81,800			6.23
		36,700			3.39
Balance May 31, 2022 (Outstanding)		321,336			6.59		3.46		0
Balance May 31, 2022 (Exercisable)		293,836			6.80		3.62		0

On October 27, 2017 the Company extended the expiration date of warrants originally issued on January 9, 2017, with a one-year expiration date. The warrant quantity and exercise price remain unchanged, 500,000 warrants exercisable at $0.44, will now expire on January 9, 2019.

On November 9, 2017, the Company received $69,736 from the exercise of 364,250 warrants at prices of $0.14, $0.42, and $0.60; and 55,000 options were exercised at the price of $0.2273 for proceeds of $12,501; for a total of 419,250 common shares being issued. The Company also issued 875 compensation warrants with an exercise price of $0.60 expiring April 3, 2019. These compensation warrants were valued at $347 and recorded as a share issue cost and within additional paid in capital for a net effect of $Nil.

On November 22, 2017, the Company received $118,915 from the exercise of warrants and compensation warrants previously granted. The compensation warrant was exercised at the price of $0.42. The warrants were exercised at prices of $0.14, $0.273, and $0.60, for a total of 415,187 common shares being issued. The Company also issued 20,156 compensation warrants with an exercise price of $0.60 expiring April 3, 2019. These compensation warrants were valued at $7,990 and recorded as a share issue cost and within additional paid in capital for a net effect of $Nil.

~~A continuity schedule for warrants is presented below:~~

Weighted Average
Number of Exercise Price
Warrants $
Balance, August 31, 2016 12,136,241 0.18
Cancelled/Expired (1,004,150 ) 0.22
Exercised (10,322,025 ) 0.23
Issued 8,034,440 0.36
Balance, August 31, 2017 8,844,506 0.29
Exercised (1,404,437 ) 0.19
Issued 21,031 0.60
Balance, November 30, 2017 7,461,100 0.30

The fair value of ~~warrants~~share purchase options granted ~~as compensation warrants was~~were estimated as of the date of the grant by using the Black-Scholes option pricing model with the following assumptions:

	~~November 30~~	May 31, 2022
Expected volatility	~~2017~~		98% - 119	%
~~Expected volatility~~	~~100% – 101%~~
Risk-free interest rate	~~1.21%~~		0.85% - 1.78	%
Expected life	~~1.36 – 2.00~~	5 years
Dividend yield	~~0.00%~~		0	%
Estimated fair value per ~~warrant~~	~~$0.40~~

~~A summary of warrants outstanding as of November 30, 2017 is presented below:~~option

# of Warrants Weighted Weighted
Average Average
Remaining Exercise Price
Contractual Life $
180,400 0.03 years 0.27
450,000 0.70 years 0.14
500,000 0.70 years 0.44
2,650,666     0.75 years 0.14
500,000 1.11 years 0.23
1,984,796     1.34 years 0.60
245,238 1.34 years 0.42
200,000 1.55 years 0.29
750,000 3.86 years 0.14
7,461,100     1.26 years 0.30

~~12.~~

~~Stock Options~~

$2.50 - $5.10

14. Revenues

	Nine Months Ended
		May 31, 2022 $		May 31, 2021 $
Product sales			111,597		360,558
Licensing revenue			16,160		326,474
Other revenue			16,490		4,685
Income from operations			144,247		691,717

Product revenues of $112k and licensing usage fees of $16k represent a significant decrease, year over year, in intermediate product sales and related licensing usage fees during the nine months ended May 31, 2022.

15. Segment Information

The Company’s operations involve the development and usage, including licensing, of its proprietary DehydraTECH Technology. Lexaria is centrally managed and its chief operating decision makers, being the President and the CEO, use the consolidated and other financial information supplemented by revenue information by category of alternative health consumer products and technology licensing to make operational decisions and to assess the performance of the Company. The Company has identified two reportable segments: Intellectual Property and Products. To date, licensing revenues have been significantly concentrated on one licensee.


Page 14 of 33
The Company has established its 2014 Stock Option Plan whereby the board of directors may, from time to time, grant up to 3,850,000 stock options to directors, officers, employees, and consultants. Stock options granted must be exercised no later than five years from the date of grant or such lesser period as determined by the Company’s board of directors. The exercise price of an option is equal to or greater than the closing market price of the Company’s common shares on the day preceding the date of grant. The vesting terms of each grant are set by the board of directors.
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Nine Months Ended May 31, 2022	IP Licensing $			Products $			Corporate $			Consolidated Total $
Revenue		16,160			111,597			16,490			144,247
Cost of goods sold		0			(30,592	)		0			(30,592	)
Operating expenses		(3,096,910	)		(430,951	)		(2,456,286	)		(5,984,147	)
Segment loss		(3,080,750	)		(349,946	)		(2,439,796	)		(5,870,492	)

Total assets		958,586			95,389			8,083,968			9,137,943

Nine Months Ended May 31, 2021	IP Licensing $			Products $			Corporate $			Consolidated Total $
External revenue		326,474			360,658			4,585			691,717
Cost of goods sold		0			(155,037	)		0			(155,037	)
Operating expenses		914,485			(402,846	)		(3,909,802	)		(3,398,163	)
Discontinued operations		(22,000	)		0			0			(22,000	)
Segment income (loss)		1,218,959			(197,225	)		(3,905,217	)		(2,883,483	)

Total assets		709,155			51,738			9,786,659			10,547,553

Capital Asset by Region	Cost US		Addition US		Net Balance US		Cost Canada		Addition Canada		Net Balance Canada		Total Net Balance
Nine Months Ended May 31, 2022	$		$		$		$		$		$		$
Leasehold Improvements		0		0		0		259,981		0		78,805		78,805
Computers		0		0		0		63,964		6,817		10,540		10,540
Furniture Fixtures Equipment		0		-		0		31,126		-		9,893		9,893
Lab Equipment		98,050		42,375		106,506		193,185		-		137,686		244,193
		98,050		42,375		106,506		548,256		6,817		236,924		343,431

Capital Asset by Region	Cost US		Disposal US			Net Balance US		Cost Canada		Net Balance Canada		Total Net Balance
Year Ended August 31, 2021	$		$			$		$		$		$
Leasehold Improvements		0		-			0		259,981		119,333		119,333
Computers		0		-			0		63,964		12,414		12,414
Furniture Fixtures Equipment		3,094		(3,094	)		-		31,126		14,706		14,706
Lab Equipment		98,050		0			69,580		193,185		152,180		221,760
		101,144		(3,094	)		69,580		548,256		298,633		368,213

16. Commitments, Significant Contracts and Contingencies

Right of Use Assets – Operating Lease

The Corporate office and R&D laboratory located in Kelowna, British Columbia, Canada is leased until November 15, 2023, with a five-year renewal option. In addition to minimum lease payments, the lease requires us to pay, subject to annual adjustments, property taxes and operating costs.

Page 15 of 33

~~Fiscal 2018 Activity~~

Table of Contents

	May 31, 2022			August 31, 2021
	$			$
Right of use assets – operating leases		126,920			126,920
Amortization		(64,557	)		(35,879	)
Total lease assets		62,363			91,041

Liabilities:		89,393			125,431
Lease payments		(33,395	)		(43,950	)
Interest accretion		4,166			7,912
Total lease liabilities		60,164			89,393

Operating lease cost		62,363			91,041
Operating cash flows for lease		33,395			43,950
Remaining lease term	1.4 Years			2.1 Years
Discount rate		7.50	%		7.50	%

Pursuant to the terms of the Company’s lease agreements in effect, the following table summarizes the Company’s maturities of operating lease liabilities as of May 31, 2022:

2022	$	11,204
2023	$	44,816
2024	$	7,469
Thereafter		0
Total lease payments	$	63,489
Less: imputed interest		(3,325	)
Present value of operating lease liabilities	$	60,164
Less: current obligations under leases		(41,825	)
Total	$	18,339

Page 16 of 33

~~No stock options were granted during the period ended November 30, 2017.~~

Table of Contents

~~A continuity schedule for stock options is presented below:~~

Weighted
Options Average Exercise
Outstanding Price
$
Balance, August 31, 2016 3,485,000 0.15
Exercised (1,014,125 ) 0.17
Granted 850,000 0.14
Balance, August 31, 2017 3,320,875 0.15
Exercised (55,000 ) 0.23
Balance, November 30, 2017 3,265,875 0.15

~~A summary~~17. Prepaid Expenses and Deposits

Prepaid expenses consist of the ~~stock options as~~following at ~~November 30 2017, is presented below:~~May 31, 2022, and August 31, 2021:

Number of Stock Number of Stock Weighted Weighted Aggregate
Options Options Average Average Intrinsic Value
Exercisable Remaining Exercise Price
Contractual Life $ $
247,500 247,500 0.55 years 0.09 231,188
193,375 193,375 1.65 years 0.23 154,261
990,000 990,000 2.06 years 0.10 915,750
275,000 275,000 2.18 years 0.09 256,875
550,000 550,000 2.32 years 0.09 513,750
110,000 110,000 2.80 years 0.17 93,750
300,000 300,000 3.38 years 0.11 274,500
200,000 200,000 4.51 years 0.37 131,000
400,000 100,000 4.56 years 0.29 292,000
3,265,875 2,965,875 2.58 years 0.15 2,863,073

~~13.~~

~~Revenues~~

	May 31,		August 31,
	2022		2021
	$		$
Advertising & conferences		684,820		168,760
Consulting		0		18,750
Legal fees		25,000		31,380
Licence, filing fees, dues		26,250		19,500
Office & insurance		21,238		80,863
		757,308		319,253

18. Marketable Securities

Three Months Ended
November 30 November 30
2017 2016
$ $
Product sales 8,008 864
Licensing revenue (Note 10) 16,250 8,250
Freight revenue 377 111
24,635 9,225

The components of Marketable Securities were as follows:

	Cost Basis $		Unrealized Gains $		Unrealized Losses $			Total $
August 31, 2021
Common stock		1,037,025		16,243		(219,427	)
Total		1,037,025		16,243		(219,427	)		833,841
May 31, 2022
Common stock		278,107		58,893		(882,809	)		(545,809	)
Total		1,315,132		75,136		(1,102,236	)		288,032

Unrealized gains and losses on marketable securities are derived from Hill Street Beverage Company ~~recognizes licensing revenue~~Inc. (“Hill Street”) (TSX-V: HILL) common stock holdings and are due, in Managements opinion, to economic uncertainties in the market sector. Management views the unrealized losses as temporary impairments based on our evaluation of available evidence.

19. Discontinued Operations

On November 19, 2020, the Company entered a ~~pro-rated basis over~~definitive asset sale agreement through its wholly owned subsidiary Lexaria CanPharm ULC to sell certain non-core business assets to Hill Street for gross proceeds of C$3,850,000.

With the ~~term~~closing of the ~~Licensing Agreement (Note 10) and additional licensing fees as they are earned. During the period ended November 30, 2017,~~sale on December 10, 2020, the Company ~~recognized $6,250~~received C$350,000 in cash, 6,031,363 restricted common shares at a fair value at C$500,000 as the first required equity-based payment, and a C$2,000,000 promissory note bearing interest at 10% per annum. The promissory note was included at its nominal value of $NIL. To date, minimal interest payments have been received and are included in Other Income. Pursuant to the terms of the ~~pre-defined $50,000 Licensing fees previously~~transaction, the Company received an additional C$1,000,000 worth of common shares of Hill Street and ~~$10,000 of additional Licensing fees. As of November 30, 2017, a total of $39,167 of the $50,000 previously received payments has been recognized as licensing revenue over the life of the contract.~~are included in Marketable Securities.

Gain on asset disposal
Book value of assets sold	$	0
Cash consideration		273,373
Shares received		468,264
Shares receivable		781,067
Promissory note		0
	$	1,522,704

~~14.~~	~~Related Party Transactions~~

Page 17 of 33
~~For the period ended November 30, 2017, the Company paid/accrued the following:~~

November 30 November 30
2017 2016
$ $
Management, consulting and accounting services:
C.A.B Financial Services (“CAB”)⁽¹⁾ 36,000 30,230
M&E Services Ltd. (“M&E”)⁽¹⁾ 18,822 11,089
Docherty Management Limited (“Docherty Management”)⁽¹⁾ 35,292 70,166
Company controlled by a director – consulting 12,000 12,000
102,114 123,485

	⁽¹⁾~~CAB is owned by the CEO of the Company, M&E is owned by the CFO of the Company June 1, 2017, and Docherty Management Limited (“Docherty Management”) is owned by the President of the Company.~~
Table of Contents

The financial results of the group of assets sold are presented as income (loss) from discontinued operations, net of income taxes in our consolidated statement of income. The following table presents financial results of the assets:

	Nine Months Ended
	May 31,
	2022		2021
Revenue	$	0	$	3,000
Operating Expenses		0		25,000
Net Income (loss)	$	0	$	(22,000	)

The following table presents cash flows of discontinued operations:

	Nine Months Ended
	May 31,
	2022		2021
Cash flows used in discontinued operating activities
Net income	$	0	$	(22,000	)
Change in working capital		0		105,000
Net cash used in discontinued operating activities	$	0	$	83,000

Net cash provided by discontinued operations	$	0	$	83,000

20. Subsequent Events

As disclosed on our Form 8-K filed on June 9, 2022, Lexaria successfully filed a pre-Investigational New Drug (“IND”) meeting request with the US Food and Drug Administration (“FDA”). The filing has been confirmed and a target date of July 30, 2022 for the meeting has been provided by the FDA, subject to certain conditions being met. The request for a pre-IND meeting formally initiates communications with the FDA regarding development of Lexaria's DehydraTECH-CBD for the treatment of hypertension. The purpose of the pre-IND meeting will be to confirm the details and acceptability of Lexaria's ongoing IND-enabling development program to be completed thereafter prior to proceeding with its full IND application filing.

As disclosed on our Form 8-K filed on June 3, 2022, the Company announced the signing of a commercial licensing agreement with Premier Wellness Science Co., Ltd. of Japan (“Premier”). Minimum quarterly payments to Lexaria will begin September 1, 2022, and, during the first five years of the Agreement, amount to US$4,527,500.

Under the terms of the Agreement, Premier is purchasing the rights to DehydraTECH technology for the Japanese non-pharmaceutical market for use with cannabidiol (“CBD”) and hemp ingredients in oral liquid and non-liquid products, as well as for topical, hair-care, lip-care and cosmetics products. Premier Wellness Science Co., Ltd. is a wholly-owned subsidiary of Premier Anti-Aging Co., Ltd. which is listed on the Tokyo Stock Exchange Mothers division with securities code 4934.


Page 18 of 33
~~Due to related parties:~~
	Table of Contents
	~~As at November 30, 2017, $25,018 (August 31, 2017 - $42,690) was payable to related parties included in due to related parties.~~

	~~The related party transactions are recorded at the exchange amount established and agreed to between the related parties.~~

~~15.~~	~~Segment Information~~

	The Company’s operations involve the development and usage, including licensing, of its proprietary nutrient infusion Technology. Lexaria is centrally managed and its chief operating decision makers, being the president and the CEO, use the consolidated and other financial information supplemented by revenue information by category of alternative health consumer products and technology licensing to make operational decisions and to assess the performance of the Company. The Company has identified two reportable segments: Intellectual Property Licensing and Consumer Products. Licensing revenues are significantly concentrated on a single licensee.

IP Licensing Consumer Products Corporate Consolidated Total
External Revenue 16,250 8,385 - 24,635
CoGS - (6,099) - (6,099)
Operating Expenses (59,581) (45,556) (492,112) (597,249)
Segment Loss (43,331) (43,270) (492,112) (578,713)
Total Assets 78,321 79,138 2,339,766 2,497,225

~~16.~~	~~Commitments, Significant Contracts and Contingencies~~

	~~Management Agreements~~

	~~As at November 30, 2017, the Company is party to the following contractual commitments:~~

~~Party~~	~~Monthly Commitment~~	~~Expiry Date~~
~~C.A.B Financial Services (1) (2)~~	~~$12,000~~	~~November 30, 2018~~
~~Docherty Management Ltd. (1) (2)~~	~~CAD $15,000~~	~~March 1, 2019~~
~~M&E Services Ltd. (1)~~	~~CAD $8,000~~	~~June 1, 2018~~
~~Corporate Development(3) (4)~~	~~CAD $4,000~~	~~Month to Month~~
~~Advisory Agreement~~	~~CAD $4,000~~	~~March 24, 2018~~
~~Investor relations and communications – Alex Blanchard Capital(1)~~	~~CAD $7,500~~	~~December 19, 2017~~
~~Research & Development~~	~~CAD $3,854~~	~~June 19, 2018~~

	*~~Revenue Incentive Milestones~~*

	⁽¹⁾100,000 common shares issuable upon the Company achieving non-refundable revenues of $200,000 to any single customer in any consecutive 60-day period for the first 12 months of the contract, plus a further 50,000 common shares issuable upon achieving non-refundable revenues of $200,000 to any single customer in any consecutive 60-day period, during the 13th - 24th months of the contract. If the Company achieves non- refundable revenues of $500,000 in any fiscal quarter, a further 200,000 common shares may be issuable during the first 12 months of the contract and 100,000 common shares during the 13th - 24th months of the contract.

	*~~Intellectual Property Milestones~~*

	⁽²⁾During the term of the agreement, for each provisional patent application substantively devised and successfully created, written, and filed with the U.S. Patent Office for the Company’s Technology, 250,000 restricted common shares of the Company will be issuable.

	*~~Corporate Development Milestones~~*

	⁽³⁾For new customers sourced by the Consultant until July 10, 2017; for combined Lexaria Energy and ViPova products and including all combined sales efforts and/or technology licensing revenues, achieving non- refundable revenues of $200,000 to any single customer in any consecutive 60-day period would result in a restricted common share award of 100,000 Company shares (not achieved); and, from July 11, 2017, until July 10, 2018; a restricted common share award of 50,000 Company shares may be achieved; this clause is limited to one payment per customer during the 12-month period, but payable on each customer that meets these sales/licensing thresholds.

	⁽⁴⁾For new customers sourced by the Consultant until July 10, 2017; for combined Lexaria Energy and ViPova products and including all combined sales efforts and/or technology licensing revenues, achieving non- refundable revenues of $500,000 in any fiscal quarter would result in a restricted common share award of 200,000 Company shares (not achieved); and, from July 11, 2017, until July 10, 2018; for combined Lexaria Energy and ViPova products and including all sales efforts, achieving non-refundable revenues of $500,000 in any fiscal quarter would result in a restricted common share award of 100,000 Company shares; this clause is limited to one payment per fiscal quarter.

~~17.~~	~~Subsequent Events~~

	a)	On December 1, 2017, the company received $6,733 from the exercise of a compensation warrant previously granted. The compensation warrant was exercised at $0.42 and a total of 16,031 common shares were issued. The Company also issued 8,016 warrants with an exercise price of $0.60 and an expiration date of April 3, 2019, related to the compensation warrant. Lexaria also issued 14,634 restricted common shares at an issuance price of $0.82 per shares to settle $12,000 of debt to a director of the Company.

	b)	On December 1, 2017, Lexaria granted 200,000 stock options with an exercise price of $0.83 and an expiration date of December 1, 2022 to an officer of the Company, pursuant to an existing management contract. Lexaria awarded 250,000 stock warrants with an exercise price of $0.83 and an expiration date of December 1, 2019 to a manager of the Company, pursuant to a management contract.

	c)	On December 1, 2017, Lexaria awarded a total of 209,056 restricted common shares at an issuance price of $0.82 as required by intellectual property performance thresholds within an existing management consulting contract with the Company divided between three officers and three managers.

	d)	On December 22, 2017, the Company announced it received $95,857.20 from the exercise of stock warrants and a compensation option certificate previously granted. The compensation option certificate was exercised at $0.42 and a total of 7,200 common shares were issued. This exercise is by a third party who is neither an officer nor a director of the Company. The Company also received for exercise a total of 230,062 warrants previously granted; being 9,000 at $0.14; 125,400 at $0.273; and 95,662 at $0.60.

	e)	On January 10, 2017, the Company announced it received $216,851 from the exercise of warrants and stock options previously granted. 33,375 stock options were exercised at $0.2273 and 50,000 were exercised at $0.295 and 324,191 warrants at $0.60.

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

Cautionary Note Regarding Forward-Looking Statements

This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not statements of historical fact may be forward-looking statements. These statements relate to future events or our future financial performance. Any forward-looking statements are based on our present beliefs and assumptions as well as the information currently available to us. In some cases, ~~you can identify~~ forward-looking statements are identified by terminology such as ~~"may"~~“may”, ~~"should"~~“will”, ~~"expects"~~“should”, ~~"plans"~~“could”, ~~"anticipates"~~“targets”, ~~"believes"~~“goal”, ~~"estimates"~~“expects”, ~~"predicts"~~“plans”, ~~"potential"~~“anticipates”, “believes”, “estimates”, “predicts”, “potential” or ~~"continue"~~“continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled ~~"Risk Factors"~~“Risk Factors” set forth in Item 1(A) in our annual report on Form 10-K, as filed with the Securities and Exchange Commission on November 29, 2021, that may cause our or our ~~industry's~~industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. ~~Except~~We caution you not to place undue reliance on any forward-looking statements as ~~required by applicable law, including the securities laws~~they speak only as of the ~~United States,~~date on which such statements were made, and we ~~do not intend~~undertake no obligation to update any forward-looking statement or to reflect the occurrence of an unanticipated event. New factors may emerge and it is not possible to predict all factors that may affect our business and prospects. Further, management cannot assess the impact of each factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking ~~statements to conform these statements to actual results.~~statements.

Our unaudited interim consolidated financial statements are stated in United States Dollars (“US$”) and are prepared in accordance with United States Generally Accepted Accounting ~~Principles.~~Principles (“US GAAP”). The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report, particularly in the section entitled "Risk Factors" of this quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in ~~United States dollars.~~US$. All references to ~~"CAD$"~~“C$” refer to Canadian dollars and all references to ~~"common shares"~~“common shares” and ~~"shares"~~“shares” refer to the common shares in our capital stock, unless otherwise indicated.

~~As used in this quarterly report,~~ The terms “Lexaria” “we”, “us”, “our” and “Company” mean the ~~terms "Lexaria" "we", "us", "our" and "Company" mean~~ Company and/or our subsidiaries, unless otherwise indicated.

~~General and Historical Overview of Our Business~~

The ~~Company was formed~~following discussion should be read in conjunction with our condensed financial statements and accompanying notes in this quarterly report on ~~December 9, 2004 under~~Form 10-Q, and our audited financial statements with notes in our annual report on Form 10-K for the ~~laws~~year ended August 31, 2021.

Overview

Lexaria’s patented DehydraTECH technology improves the delivery of bioactive compounds while promoting healthy ingestion methods, lowers overall dosing, and is highly effective in active molecule delivery available in a range of formats from oral ingestible to oral buccal/sublingual to topical products. DehydraTECH substantially improves the rapidity and quantity of Active Pharmaceutical Ingredients (“API”) transport to the blood plasma and brain using the body’s natural process for distributing fatty acids via the oral route. This technology extends across many categories beyond the primary pharmaceutical focus of the ~~State~~Company from foods and beverages to cosmetic products and nutraceuticals.

Page 19 of 33

Table of Contents

Research & Development

Lexaria is advancing several R&D activities in both preclinical and clinical programs. Currently, our primary research program is the investigation of ~~Nevada as an independent oil~~cannabidiol (CBD) for the reduction of hypertension with a human clinical trial initiated in Q3, 2022 and ~~gas company engaged~~three human clinical trials concluded in calendar 2021. Other programs include nicotine for oral pouches and nicotine replacement therapy, antivirals and related compounds for COVID-19 and other viral diseases, PDE5 inhibitors, hormones, and others. From time to time the ~~exploration,~~Company will engage in contract R&D for third parties who are interested in evaluating DehydraTECH in their products.

During the quarter ended May 31, 2022, Lexaria incurred $752,095 (May 2021- $454,443) in R&D expenditures. Specific R&D programs are in ongoing development and ~~acquisition~~align to our financial ability to undertake each research phase for each API. Due to our expanding portfolio coverage, we continually examine accelerated timetable options for testing, research, and development of ~~oil~~each API. Fiscal 2022 continues to highlight the direction of our research and ~~gas properties~~development programs with confirmatory results from our ongoing programs. We continue to devote an increasing proportion of our resources and focus towards pharmaceutical applications.

This focus has led to the successful completion of a letter to request a pre-IND meeting concerning DehydraTECH CBD with the FDA and it is anticipated that the FDA shall be providing its opinions on the details and acceptability of Lexaria’s intended clinical trial program on or around July 30, 2022. Assuming the FDA’s pending pre-IND meeting feedback is fairly aligned with the proposals Lexaria put forth in its request letter, it is anticipated that Lexaria will be authorized to proceed with its initial clinical trial to enable the ~~United States and Canada.~~ development of its DehydraTECH CBD, subject to the approval of a full IND application filing, in late calendar 2022 or early 2023.

CBD Studies

In ~~March~~September 2021 the Company reported successful results from its HYPER-H21-2 human study of ~~2014,~~DehydraTECH-CBD in arterial stiffness.

In April 2022, the Company began its multi-week human clinical hypertension study, HYPER-H21-4 for which it had received Independent Review Board approval on December 29, 2021. HYPER-H21-4 is a double blinded, randomized cross-over design study with a placebo control of 60 volunteers aged between 40-70 years. Some volunteers will already be using leading standard of care hypertension drugs such as ACE inhibitors with or without diuretics which will help evaluate the efficacy of DehydraTECH-CBD with and without other hypertension treatments. The extended duration of the study will allow Lexaria to gather critical data monitoring of DehydraTECH-CBD over time and will evaluate the potential for longer term health benefits. Further, HYPER-H21-4 should “de-risk” outcomes prior to Lexaria’s planned entry into regulatory pathways for the ~~bioscience~~use of DehydraTECH-CBD to treat hypertension and ~~alternative health~~possibly other forms of cardiovascular disease. Dosing for the study will be concluding in July 2022 with results to follow.

The HYPER-H21-4 study is entirely funded through the Company's existing cash resources and ~~wellness business~~is not subject to any financing requirement.

In April 2022 the Company announced that all data analyses from its simulated pulmonary hypertension clinical study HYPER-H21-3 have been successfully completed with positive safety and ~~discontinued~~efficacy findings. The study findings indicated a tendency (p=0.1) during 15 minutes of simulated low levels of oxygen (hypoxia) for reduced pulmonary artery systolic pressure ("PASP") with DehydraTECH-CBD treatment versus placebo. Most notably, PASP was significantly attenuated by about 5 mmHg or 41% overall (p=0.045) in male participants specifically suggesting differences by sex in responsiveness to CBD treatment under hypoxic stress conditions.

These new findings from HYPER-H21-3 will help direct prospective future research into the efficacy of DehydraTECH-CBD use for the management of elevations in pulmonary arterial pressure under hypoxic conditions (e.g., exposure to altitude), related hypoxemic pathologies (e.g., severe lung disease), and pulmonary hypertension.

Page 20 of 33

Table of Contents

Other API Studies

In October 2021 the Company reported results from its ~~involvement~~THC-A-21-1 in vivo study of DehydraTECH-THC showing it successfully elevated THC levels in blood plasma, requiring only 15 minutes at levels comparable to those achieved in 45 minutes with concentration-matched controls.

Lexaria also published results from its NIC-A21-1 in vivo trial of DehydraTECH-NICZ (nicotine benzoate) which was delivered via oral pouches. Favorable results were all statistically significant, supporting further evaluation. Lexaria plans to progress to a larger investigation in human volunteers of DehydraTECH-nicotine versus leading brands. Lexaria is currently in the ~~oil and gas business in November 2014. In May 2016,~~design phase of this proposed human clinical study, which will be independently funded with existing capital.

On February 2, 2022, results of our PDE5-A21-1 animal study were published by the Company ~~also commenced out-licensing its patented technology for improved delivery of bioactive compounds~~which illustrated that ~~promotes healthy ingestion methods, lower overall~~in as little as four minutes after dosing, ~~and~~the DehydraTECH formulation delivered 74% more sildenafil into the bloodstream on average than the concentration-matched, generic control formulation. Seven minutes after dosing, the DehydraTECH-sildenafil formulation achieved an average blood level higher ~~effectiveness in active molecule delivery. The Company has its office in Kelowna, BC, Canada.~~than the generic sildenafil control formulation reached at any point during the study.

Effective at the opening of trading on October 28, 2009, our shares of common stock began trading on the Canadian Securities Exchange (formerly, Canadian National Stock Exchange) under the trading symbol “LXX”.

Our common stock is quoted on the OTCQB under the symbol "LXRP" and on the Canadian Securities Exchange under the symbol “LXX”. Subsequent to period end on January 4, 2018, we announced trading on the OTCQX and our symbol remains unchanged.

~~In 2014,~~On March 15, 2022, the Company ~~submitted~~announced that the first phase of its epilepsy research program EPIL-A21-1 has commenced. The EPIL-A21-1 research program consists of two main studies to be performed in rodents following the first phase pilot animal model. The two main studies within the program are expected to begin in May/June 2022 and will involve both an ~~application to enter~~acute seizure model induced by electrical stimulation ("MES") as well as a chronic chemically induced seizure model ("RISE-SRS"). Lexaria has selected these models because they have been previously employed by other researchers studying the ~~legal medical marijuana business in Canada and also launched a hemp oil-based food supplement company in the USA.~~antiepileptic effects of CBD including select study work funded by GW with its Epidiolex® formulation (PubMed Reference Number 30588604).

The Company entered into a joint venture agreement with Enertopia Corp for a prospective medical marijuana business under the Canadian Marijuana for Medical Purposes Regulations (“MMPR”) for a 49% net ownership interest in the business (Enertopia 51%) utilizing an identified location in Burlington, Ontario.

~~On June 26, 2015, we entered into a definitive agreement with Enertopia Corp. and Shaxon Enterprises Ltd.~~continues to sell our 49% interest in the Burlington Joint Venture and the MMPR application number 10MMPR0610. Pursuant to the agreement, the joint venture received a non-refundable $10,000 deposit and is entitled to receive up to $1,500,000 in milestone payments upon the Burlington facility becoming licensed under the MMPR. All payments made pursuant to the agreement would be divided 51% to Enertopia Corp. and 49% to our Company. Notwithstanding the foregoing, we can neither guarantee nor provide a meaningful time estimate regarding the grantreport progress on its R&D programs through its filing of ~~a production license for the Burlington facility.~~

The Company’s food sciences activities include the development of our proprietary nutrient infusion technologies for the production of superfoods, and the production of enhanced food products under our two consumer product brands, ViPova™ and Lexaria Energy™. The Company’s patented lipid nutrient infusion technology DehydraTECH^TM~~is believed to improve taste, rapidity and delivery of bioactive compounds that include cannabinoids, vitamins NSAIDs Nicotine~~Form 8-Ks and other ~~molecules compared to what is possible without lipophilic enhancement technology. This~~public releases. The results of these programs can ~~allow for lower overall dosing requirements and/~~also be found on the Company’s website: www.LexariaBioscience.com.

Patents

Our current patent portfolio includes patent family applications or higher effectiveness in active molecule delivery. Lexaria has caused to be filed several patent pending applications with the US Patent Office, and also internationally under the Patent Cooperation Treaty (PCT). On October 26, 2016, the USPTO issued U.S. Patent No. 9,474,725 (granted June 15 2017 in Australia No. 2015274698), Cannabinoid Infused Food and Beverage Compositions and Methods of Use Thereof,grants pertaining to ~~Lexaria’s~~our method of improving bioavailability and taste, ~~of certain cannabinoid lipophilic active agents in food products. On December 12, 2017, the USPTO granted patent number US 9,839,612 B2 for~~and the use of DehydraTECH^TM~~technology~~ as a delivery platform for a wide variety of Active Pharmaceutical Ingredients (“APIs”) including, ~~all cannabinoids including THC;~~but not limited to, fat soluble vitamins; ~~non-steroidal anti-inflammatory pain medications (“NSAIDs”);~~anti-viral drugs; phosphodiesterase inhibitors; human hormones; regulated cannabinoids, and ~~nicotine.~~nicotine and its analogs.

We will continue to pursue patent protection in more than 40 countries around the world as vigorously as we are able, since the successful granting of more of those applications could lead to material increases in shareholder value. The ~~title~~Company currently has over 50 patent applications pending worldwide.

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The Company’s issued patents in the ~~granted patent is “Food~~United States, Australia, Europe, India, Mexico, and Japan are as follows:

Issued Patent #	Patent Certificate Grant Date	Patent Family
US 9,474,725 B1	10/25/2016	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
AU 2016367036	07/30/2019	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	Stable Ready-to-Drink Beverage Compositions Comprising Lipophilic Active Agents
IN 365864	04/30/2021
JP 6917310	07/21/2021
AU 2019256805	06/16/2022	Compositions Infused with Nicotine Compounds and Methods of Use Thereof
US 11,311,559	04/26/2022	Compositions and Methods for Enhanced Delivery of Antiviral Agents

In November of 2021, we were advised that our first patent in Mexico, in the Company’s second patent family, had been allowed.

On March 8, 2022, the Company announced it would be issued a new patent entitled "Compositions Infused with Nicotine Compounds and Methods of Use ~~Thereof”~~Thereof". ~~Lexaria hopes~~The new Australian patent expands upon Lexaria's international intellectual property rights to ~~reduce~~apply DehydraTECH enhancement technology to most oral forms of nicotine, including pills, tablets, lozenges, capsules, pouches, gums and sprays. The patent covers many different forms of nicotine including free base nicotine, nicotine salts, polymer resins of nicotine and other ~~common but less healthy ingestion methods,~~forms of nicotine complexes.

On April 26, 2022 the Company was granted US Patent 11,311,559 for Compositions and Methods for Enhanced Delivery of Antiviral Agents. This is Lexaria’s 25^th patent granted worldwide.

Due to the complexity of pursuing patent protection, the quantity of patent applications will vary continuously as each application advances or stalls. The Company is also filing new patent applications for new discoveries that arise from the Company’s R&D programs and, due to the inherent unpredictability of scientific discovery, it is not possible to predict if or how often such ~~as smoking, as it embraces~~new applications might be filed.

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Reverse Stock Split

On January 11, 2021, the ~~benefits~~Company filed an amendment and restatement of its ~~technology for~~articles of incorporation to effectuate a 1-for-30 reverse stock split of the issued and outstanding shares of common stock of the Company. The purpose of the reverse stock split was to meet Nasdaq’s minimum stock price requirement. The reverse stock split did not change the number of authorized shares of common stock, which remains at 220,000,000 shares. All warrants, options, share and per share information in this Report gives retroactive effect to the 1-for-30 reverse stock split.

Public Offering

On January 14, 2021, the Company closed an underwritten public ~~health.~~offering with the issuance of 2,102,856 shares of the Company’s common stock priced at $5.25 per share with an equivalent number of five-year warrants at an exercise price of $6.58. Additionally, 227,161 Representative Warrants were issued as partial consideration to the underwriters of the offering that have a five-year term at an exercise price of $6.58. Net of fees and disbursements, the Company received net proceeds of $9,471,497.

~~As at November 30, 2017, we have identified two reportable segments: Intellectual Property Licensing and Consumer Products.~~

~~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 (755) 322-0626.~~LEXX Market Listing

The ~~address~~Company’s common stock was uplisted from trading on the OTCQX under “LXRP” to the Nasdaq Capital Market where our common stock and certain of our ~~principal executive office is 156 Valleyview Rd, Kelowna BC Canada V1X3M4. We have administrative functions located in Langley, British Columbia~~warrants began trading under the symbols “LEXX” and ~~Phoenix, Arizona.~~“LEXXW”, respectively, effective as of the opening of market trading on January 12, 2021.

~~Our common stock is quoted on the OTCQB~~

The Company, trading under the symbol ~~"LXRP" and on~~“LXX”, voluntarily delisted from the Canadian Securities Exchange ~~under~~(“CSE”) effective after the ~~symbol “LXX”. Subsequent~~closing of trading on Wednesday, July 7, 2021. The overwhelming majority of trading had moved to ~~period end~~Nasdaq and by delisting from the CSE the Company expected to realize savings in fees and managerial time and effort required to maintain a dual listing.

Asset Sale

On December 9, 2020, Lexaria CanPharm ULC (“CanPharm”) completed a disposition (the “Disposition”) of its use and licensing rights to use its DehydraTECH technology (the “Assets”) specifically in association with non-pharmaceutical products containing cannabis molecules that contain 0.3% or greater THC. The purpose of the Disposition was to remove the Company’s association with cannabis as it remains a Schedule 1 Drug and thereby eliminating any such regulatory restrictions cannabis products may create. The Disposition assisted the Company in obtaining a listing on the Nasdaq Capital Market (“Nasdaq”) on January ~~4, 2018, we announced trading on the OTCQX and our symbol remains unchanged.~~

Due to the implementation of British Columbia Instrument 51-509 on September 30, 2008, by the British Columbia Securities Commission, we have been deemed to be a British Columbia based reporting issuer. As such, we are required to file certain information and documents at~~www.sedar.com.~~

~~Our Current Business~~

Our company’s business plan is currently focused on the development of strategic partnerships with licensees for our patented technology in exchange for up front and/or staged licensing fees over time. Secondarily and more generally, we continue to investigate national and international opportunities for development and distribution of the Company’s enhanced functional food and supplement product offerings; to investigate expansions and additions to our intellectual property portfolio; and, to search for additional opportunities in alternative health sectors. This includes the acquisition or development of intellectual property if and when we believe it advisable to do so. We announced issuance of our first patent by the U.S. Patent and Trademark Office (USPTO) on October 26, 2016 and have received a Notice of Acceptance from the Australian Patent Office with related patent issuance date June 15 2017 No. 2015274698. We announced on November 2, 2017 a new Notice of Allowance from the USPTO that included the delivery of additional molecules such as psychoactive cannabinoids, vitamins, non-steroidal anti-inflammatories, and nicotine all utilizing our DehydraTECH^TM ~~delivery technology and eventual patent issuance date of December~~ 12, 2017 of patent number US 9,839,612 B2. We are seeking additional patent protection for what we believe to be a unique process for the nutritional delivery of certain molecules such as cannabinoids, Nicotine, Non-Steroidal Anti-Inflammatory Drugs (NSAIDs), and Vitamins. To achieve sustainable and profitable growth, our company intends to control the timing and costs of our projects wherever possible.

~~During the three month period ended November 30, 2017, and up to the date of this report, we experienced the following significant corporate developments:~~

On September 22, 2017, the Company issued 625,000 shares of its common stock from the exercise of warrants previously granted for proceeds of $93,750. All warrants were exercised by third parties who are neither officers nor directors of the Company.

On October 27, 2017, the Company announced it extended the expiration date of warrants originally issued on January 9, 2017 with a one-year expiration date. The warrant quantity and exercise price remain unchanged. Those same 500,000 warrants remain exercisable at $0.44 but will now expire on January 9, 2019.

On October 31, 2017, the Company announced it received a Notice of Allowance from the United States Patent and Trademark Office (“USPTO”) for the use of its technology as a delivery platform for all cannabinoids including THC; fat soluble vitamins; non steroidal anti-inflammatory pain medications (“NSAIDs”); and nicotine. The patent application number is 15/225,799, “Food and Beverage Compositions Infused With Lipophilic Active Agents and Methods of Use Thereof” and on December 12, 2017, the USPTO granted patent number US 9,839,612 B2 for the use of DehydraTECH^TM ~~technology as a delivery platform.~~

On November 2, 2017, the Company announced it acquired 100% ownership interest in its majority owned subsidiary Poviva Tea, LLC. The Company previously owned a 51% interest in Poviva Tea, LLC and acquired the remaining 49% interest. Compensation was $70,000, a waiver on certain debts, and a 5%, 20-year royalty on net profits of ViPova Tea^TM tea, coffee, and hot chocolate sales. No Lexaria stock or options were issued. The 20-year royalty was determined to have a $Nil fair value as PoViva operates at a loss and future profitability is uncertain. On November 9, 2017, the Company announced it filed a new patent application with the US Patent and Trademark Office utilizing the Lexaria DehydraTECH^TM ~~technology for delivery of phosphodiesterase type 5 (PDE5) inhibitors - trade names of existing well-known products include Viagra~~^® ~~(sildenafil) and Cialis~~^® ~~(tadalafil).~~

On November 9, 2017, the Company announced it received $69,736 from the exercise of 364,250 warrants at prices of $0.14, $0.42, and $0.60; and 55,000 options were exercised at the price of $0.2273; for a total of 419,250 common shares being issued. The Company also issued 875 new compensation warrants with an exercise price of $0.60 and expiring April 3, 2019. These compensation warrants were valued at $347 and recorded as a share issue cost and within additional paid in capital for a net effect of $Nil.

On November 27, 2017, the Company announced filing its annual Form 10-K including financial statements. The company also announced it received $118,915 from the exercise of warrants and compensation warrants previously granted. The compensation warrants were exercised at the price of $0.42. The warrants were exercised at prices of $0.14, $0.273, and $0.60, for a total of 415,187 common shares being issued. The Company also issued 20,156 compensation warrants with an exercise price of $0.60 expiring April 3, 2019. These compensation warrants were valued at $7,990 and recorded as a share issue cost and within additional paid in capital for a net effect of $Nil.

~~Food Science and Technology~~

Lexaria is a Biotechnology and food science company focused on developing and out-licensing its proprietary technology for improved taste, rapidity, and delivery of bioactive compounds in foods and other ingestible products Lexaria is focusing its capital and management time on its pursuit of intellectual property, technology licensing opportunities, an expanding portfolio of patent pending applications, and functional food and supplement formulations.

On November 11, 2014, our Company acquired 51% of PoViva Tea LLC and executed an operating agreement to develop a business of legally producing, manufacturing, importing/exporting, testing, researching and developing, a line of hemp oil with cannabidiol-infused teas, drinks and foods. Lexaria oversees all aspects of the business including, but not limited to, production, product quality, licensing, testing, product legality, accounting, marketing, capital investment, capital raising, sales, branding, advertising and fulfillment. Pursuant to the agreement, there is a Management Committee, whereby there are two representatives from Lexaria and one of the founding members of PoViva. On November 2, 2017, we announced that we acquired 100% of PoViva Tea LLC.

~~The Company introduced an expanding variety of hemp fortified consumer food products throughout 2015 to demonstrate Lexaria’s DehydraTECH~~^TM technology to both consumers and potential licensees. From January 2015 to December 2015, seven (7) flavors of teas; hot chocolate; coffee, and two (2) flavors of protein energy bars were introduced – all utilizing Lexaria’s patented technology DehydraTECH^TM ~~for the more palatable and efficient delivery of bioactive molecules infused within those food products.~~

In the production of the products, for each raw material to be used in ViPova™ -branded products, the Company assesses if the product inputs and the completed products comply with all applicable food and drug laws, and that the inputs and the finished products meet all applicable legal and quality standards including and as it relates to hemp oil content; THC content; molds and mildews; heavy metals; and may measure additional components.

~~The US Federal government, through the US Department of Health and Human Services, owns US Patent #6630507, which among other things, claims that~~

“Cannabinoids have been found to have antioxidant properties, unrelated to NMDA receptor antagonism. This new found property makes cannabinoids useful in the treatment and prophylaxis of wide variety of oxidation associated diseases, such as ischemic, age-related, inflammatory and autoimmune diseases. The cannabinoids are found to have particular application as neuroprotectants, for example in limiting neurological damage following ischemic insults, such as stroke and trauma, or in the treatment of neurodegenerative diseases, such as Alzheimer's disease, Parkinson's disease and HIV dementia.”

For reference, cannabinoids are compounds that affect cannabinoid receptors located on many human cells. CB1 receptors are widely found within the human brain; and CB2 receptors are found with the human immune system and have been linked to anti-inflammatory and other responses.

~~Despite independent scientific findings in many locations around the world, some regulatory agencies do not officially recognize that a human endocannabinoid system exists.~~

Over one hundred different cannabinoids have been isolated from the cannabis plant, most of which do not have psychoactive properties. One that does have psychoactive properties is tetrahydrocannabinol (THC). Endocannabinoids are produced naturally in the human body while phytocannabinoids are produced in several plant species, most abundantly in the Cannabis plant.

Cannabidiol (“CBD”) is one of the major phytocannabinoid forms of cannabinoids and is not psychoactive, often contributing more than 35% of the extracts from the cannabis plant resin. Cannabidiol occurs naturally in other plant species beyond cannabis. For example, the most widely acknowledged alternative source of phytocannabinoid is in the better understood Echinacea species, in widespread use as a dietary supplement. Most phytocannabinoids are virtually insoluble in water but are soluble in lipids and alcohol. The World Anti Doping Agency (“WADA”) has exempted CBD from its 2018 list of banned substances.

The Alternative Health sector is large and growing. A long term Medical Expenditure Panel Survey was conducted from 2002 until 2008 with at least 29,370 subjects asked repeatedly if they had seen any kind of health care practitioner in the previous six months. The survey recorded whether the health care provider was a “complementary and alternative medicine care professional,” including “homeopathic, naturopathic, or herbalist.”

Between 5.3% and 5.8% of the survey group at any one time reported that they had seen a complementary or alternative medicine provider. Based on the US population of ~323,000,000, this suggests between 17.1 million and 18.7 million Americans are seeking an alternative health care professional at any given time.

Meanwhile the Centers for Disease Control and Prevention, in an April 2011 NCHS Data Brief, reported that more than 50% of the population uses dietary supplements of one kind or another. Detailed findings from that report included:

~~Use of dietary supplements is common among the U.S. adult population. Over 40% used supplements in 1988–1994, and over one-half in 2003–2006.~~
~~Multivitamins/multiminerals are the most commonly used dietary supplements, with approximately 40% of men and women reporting use during 2003–2006.~~
~~Use of supplemental calcium increased from 28% during 1988–1994 to 61% during 2003–2006 among women aged 60 and over.~~

~~Status of Operations; Consumer product development and sales~~

More than 150 million Americans drink tea every day, amounting to some 79 billion servings of tea in America every year. Our launch of ViPova™ Tea brand is meant to tap into this existing demand. Part of our corporate strategy is to build national brands through products that large groups of potential customers are already familiar and comfortable with.

PoViva Tea LLC has filed patents pending, and has received one granted patent and one Notice of Acceptance of the patent, to bind active hemp oil ingredients with a lipid, potentially allowing for more efficient and comforting delivery of the CBD.

Lexaria began producing cash flows from its products in January 2015; focused on the immediate opportunities in the hemp-oil-sectors that are federally legal. Cannabinoids have been found by many researchers to have antioxidant properties and Lexaria plans to use the DehydraTECH^TM ~~patented process to infuse hemp oils into a number of popular food and beverages.~~

~~Lexaria has launched a line of premium products, always relying on our DehydraTECH~~^TM patented infusion process, to bring hemp oil into the mainstream. Because hemp oil does not have psychoactive properties we expect our products to appeal to the widest possible customer base. To date we will focus our sales efforts across the continental USA. Some studies have found that 3% of the Canadian population regularly consumes hemp food products, while 1% of the American population regularly consumes hemp food products. We believe the consumption of hemp based food products offers exceptional growth possibilities.

According to Nutrition Business Journal, the Organic Food sector was a $246 billion industry in the USA during 2014, while Dietary Supplements was a $34.6 billion industry. According to Arcview, Legal Cannabis was a $4.7 billion US industry in 2015 and expected to grow to over a $20 billion sector before 2025 but is clearly a much smaller industry sector than the more established food sectors. Lexaria has not yet determined whether our hemp oil-infused products will be accepted into any or all three of these particular sectors.

Lexaria has a main corporate website as well as smaller e-commerce focused websites devoted to consumer products. The majority of product sales have taken place through the e-commerce websites. A contracted national distribution center ensures rapid and accurate fulfillment of all orders. A 1-800 ordering center has also been placed into operation.

Lexaria had previously launched the “Lexaria Energy” brand that is 100% owned by the Company. Under this brand, the Company plans to develop hemp oil-infused food products for people with active lifestyles, such as protein bars, protein shakes and other similar products. On November 3, 2015, Lexaria Energy10 protein bars became available for retail sales with two flavors. The original contract manufacturer of these protein bars was unable to fulfill additional orders and we have not currently been able to locate and contract an alternative location to manufacture this more complicated food product, with the result that the product is temporarily discontinued while we search for a suitable manufacturing location.

Through the November 2014 acquisition of 51% of Poviva Tea LLC, and the November 2, 2017, announcement of the 100% acquisition, Lexaria acquired control of certain patents pending with the United States Patent Office. Lexaria has worked to broaden the patents and extend their utility to molecules other than those originally named.

On June 11, 2015, Lexaria initiated the simultaneous filing of a U.S. utility patent application and an International patent application under the Patent Cooperation Treaty (PCT) procedure, both at the U.S. Patent and Trademark Office (“USPTO”). These applications follow the Company’s 2014 and 2015 family of provisional patent application filings in the U.S. and serve two additional broad purposes:

	1)	Lexaria is seeking protection of its intellectual property under international treaties. To this end Lexaria has filed for PCT patent application protection. There are 148 countries that are signatories to the Patent Cooperation Treaty, including such major markets as Canada, China, India, much of Europe and the Middle East, the United Kingdom and Japan among others.

	2)	Lexaria believes its lipid infusion technology has applications beyond the delivery of just cannabinoids. Based on further formulation testing, Lexaria has included additional lipophilic molecules that may be delivered via food and beverage formats utilizing its technology, widely encompassing three major new market opportunities for the Company: Nicotine; Nonsteroidal Anti-Inflammatories (NSAIDs); and Vitamins.

In December 2015, the Company filed two further provisional patent applications in the U.S. These new applications served to further broaden the variety and applicability of base compounds that can be used when formulating the Company’s lipid based technology. The first of these applications identify compounds like edible starches (e.g., tapioca starch) that are commonly used in food products today and could, therefore, serve as a base for formulating and incorporating the Company’s Technology into a wide variety of every day food products. The second of these applications identify emulsifier compounds like gum Arabic that are commonly used in beverage products today in order to facilitate similar flexibility for formulating the Company’s Technology in every day, shelf-stable beverages.

On October 26, 2016, the USPTO issued U.S Patent No. 9474725, Cannabinoid Infused Food and Beverage Compositions and Methods of Use Thereof, pertaining to our method of improving bioavailability and taste of certain cannabinoid lipophilic active agents in food products. This is the Company’s first patent granted and has a publish date of October 27, 2016 (June 10 2017 in Australia No. 2015274698) and protects our technology for twenty years. On December 12, 2017, the USPTO granted patent number US 9,839,612 B2 for the use of DehydraTECH^TM ~~technology as a delivery platform.~~

The Company does not know and cannot know whether these strategies will be successful, or if successful, how long it will take to gain consumer acceptance and customer loyalty. It can be a challenge to be successful by introducing new consumer products to a competitive retail marketplace, and we can offer no assurances that our products will be a commercial success.

~~International Patent Protection~~

When Lexaria first began examining the legal medical cannabis market in 2013, and entered the market in 2014, the Company believed it could make an impact in perhaps both the Canadian and U.S. marketplaces. Our pursuit and development of technology has expanded our potential area of impact, both geographically and by sector. Because of the applicability of our technology to markets outside of the legal cannabis sector, we have taken the necessary steps to protect that intellectual property within larger global markets, regardless of whether they lie within the medical cannabis sector or in other unrelated sectors.

~~Additional Molecules~~

~~NICOTINE.~~ More than 99% of all nicotine that is consumed worldwide is delivered through smoking cigarettes. Approximately 6,000,000 deaths per year, worldwide, are attributed primarily to the delivery of nicotine through the act of smoking according to the Centers for Disease Control and Prevention, which also estimates that over $170 billion per year is spent just in the USA on direct medical care costs for adult smokers. 69% of U.S. adult smokers want to quit smoking and 43% of US adult smokers have attempted to quit in any twelve-month period.

~~Worldwide, retail cigarette sales were worth $722 billion in 2013, with over 5.7 trillion cigarettes sold to more than 1 billion smokers.~~

~~RELEVANCE~~: Lexaria postulates that delivery of nicotine to satisfy current demand, utilizing our patented lipid-delivery technology in common food groups, could shift demand from smoking cigarettes to alternative nicotine-based food products. Since most of the adverse health outcomes of nicotine consumption are associated with the delivery method and only to a lesser degree to the actual ingestion of nicotine, there could be a vast positive community health outcome through the reduction in smoking cigarettes. Additional research and regulatory compliant investigations would need to be conducted before otherwise healthy foods such as tea, coffee or energy bar snacks containing nicotine could be introduced. Nicotine is a named molecule in the latest Lexaria patent applications.

~~NSAID~~. Non-steroidal Anti-inflammatories are the second-largest category of pain management treatment options in the world. The global pain management market was estimated at $22 billion in 2011, with $5.4 billion of this market being served by NSAID’s. The U.S. makes up over one-half of the global market. The opiods market (such as morphine) form the largest single pain management sector but are known to be associated with serious dependence and tolerance issues.

Some of the most commonly known NSAIDs are ASA (Aspirin), Ibuprofen (Advil, Motrin), and Acetaminophen (Tylenol). (Acetaminophen is not accepted by all persons to be an NSAID.) Although NSAIDs are generally a safe and effective treatment method for pain, they have been associated with a number of gastrointestinal problems including dyspepsia and gastric bleeding.

~~RELEVANCE~~: Lexaria postulates that delivery of NSAIDs through a lipid-based mechanism could provide the beneficial properties of pain relief with lessened negative gastrointestinal effects, and also potentially deliver lower dosages of active ingredients with similar pain management outcomes as current pill forms at higher dosages. ASA, Piroxicam, Diclofenac, Indomethacin, Ibuprofen, and Acetaminophen are all named molecules in the latest Lexaria patent applications.

~~VITAMINS.~~ The global vitamin and supplement market is worth $68 billion according to Euromonitor. The category is both broad and deep, comprised of many popular and some lesser known substances. Vitamins in general are thought to be an $8.5 billion annual market in the U.S. The U.S. is the largest single national market in the world, and China and Japan are the 2^nd ~~and 3~~^rd ~~largest vitamin markets.~~

Vitamin E is fat soluble and can be incorporated into cell membranes which can protect them from oxidative damage. Global consumption of natural source vitamin E was 10,900 metric tons in 2013 worth $611.9 million.

~~RELEVANCE~~: Lexaria postulates that delivery of fat soluble vitamins through its patented lipid-based delivery mechanism may result in less waste and lower dosages required than most current pill forms. As well, ingestion of pills is an unpleasant experience for many people so it is possible that vitamin delivery through common food groups could vastly expand market demand for this sector. Vitamin E is a named molecule in the latest Lexaria patent applications.

On August 11, 2015, Lexaria signed a license agreement with PoViva Tea LLC for $10,000, granting Lexaria a 35-year non exclusive worldwide license to unencumbered use of PoViva Tea LLC’s IP Rights, including rights of resale. This license agreement ensures Lexaria has full access to the underlying infusion technology.

~~Scientific testing and validation~~

On August 24, 2015, the Company announced potential industry-changing achievements in enhanced gastrointestinal absorption of cannabidiol (CBD) utilizing Lexaria’s technology. The third-party testing was conducted in two phases of~~in vitro~~ ~~tests beginning in June and completed in August, 2015.~~

The independent laboratory results delivered average CBD permeability of 499% of baseline permeability, compared to CBD permeability without Lexaria’s technology. These results exceed Company expectations. This was assessed in a strictly controlled,~~in vitro~~experiment using a human intestinal tissue model. Samples of Lexaria’s commercially available CBD-fortified ViPova™ black tea were administered in the model compared with concentration-matched CBD control preparations that lacked Lexaria’s patented formulation and process enhancements. Lexaria believes that its~~in vitro~~ findings provide compelling evidence of the intestinal absorption enhancing capabilities of its technology, based on which it is exploring opportunities to progress to more advanced, follow-on bioavailability testing in animals.

~~The tests also showed 325% of baseline gastro-intestinal permeability of CBD comparing Lexaria’s CBD-fortified ViPova™ black tea to a second control of CBD and black tea combined,~~~~without~~ Lexaria’s patented formulation enhancements. This confirmed that the specialized processing undertaken by Lexaria during its manufacturing process together with its formulation enhancements, does indeed significantly improve absorption levels.

The bioavailability of CBD (or of THC) varies greatly by delivery method. Smoking typically delivers cannabinoids at an average bioavailability rate of 30% (Huestis (2007) Chem. Biodivers. 4:1770–1804; McGilveray (2005) Pain Res. Manag. 10 Suppl. A:15A – 22A). By comparison, orally consumed cannabis edibles typically deliver cannabinoids at an average bioavailability rate of only 5% (Karschner et al. (2011) Clin. Chem. 57:66–75).

The Company’s present findings suggest that its technology may achieve a 5-fold improvement in cannabinoid absorption in edible form over that which can be achieved without its proprietary process and formulation enhancements. This conceptually supports that Lexaria’s technology represents a significant breakthrough in cannabinoid delivery by approximating the high absorption levels achieved as though through administration by smoking, but without the associated negative effects on human health caused by smoking.

The tests were completed in two phases culminating with testing using simulated intestinal fluid conditions that delivered these findings. These results were stronger than earlier iterations of the tests that did not use a simulated intestinal fluid environment and contributed to Lexaria’s understanding of the mechanisms at work. For these and other reasons, Lexaria believes that bioavailability testing in animals is likely to yield even stronger absorption results in the presence of natural intestinal fluid conditions.

CBD has been repeatedly found to provide beneficial pain relieving, anti-inflammatory, anti-anxiety, neuroprotection, anti-psychotic, and anti-convulsive effects among others. Lexaria’s patented technology could significantly reduce individual serving requirements for CBD to consumers. This could lead to reduced costs of consumption for consumers and increased profitability for Lexaria.

Lexaria believes that the same technology used to enhance the absorption of CBD in the recent laboratory tests, is applicable to THC, nicotine, NSAIDs and other lipophilic compounds that are widely used today.

During January 2015, Lexaria conducted a study of nitric oxide levels in humans, as a biomarker for absorption of cannabidiol, with the expectation that it would provide additional evidence of the efficient absorption of cannabidiol from Lexaria food products enhanced with hemp oil, by demonstrating the elevation of nitric oxide in the human body in response to product ingestion.

The study data from human subjects demonstrated significant elevation of systemic nitric oxide levels as a surrogate biomarker for cannabidiol (CBD) bioabsorption in response to ingestion of Lexaria's products. This provided clinical support for the CBD bioavailability enhancing properties of Lexaria's patented technology, on the premise that bioavailable CBD is known to elevate levels of the endocannabinoid anandamide in the human body which, in turn, stimulates release of nitric oxide in the vascular system.

In summary, consuming Lexaria and ViPova™ food products resulted in elevated levels of nitric oxide within the body. The results of the study indicated that all Lexaria and ViPova™ food products elicited significant increases in salivary nitric oxide, achieving levels from 110 µM to as high as 220 µM in the test subjects. The beverage products generally had faster initial responses in as little as 15 minutes after product ingestion, whereas the initial responses from the protein-energy bars required 30 minutes. The faster response time with the beverage products was to be expected, given the relative ease of digesting liquids versus solids. All products sustained their maximum levels of nitric oxide detection through to the 60-minute end-points used in the study, indicating a need for additional study to determine the length of time that nitric oxide levels remain elevated following production consumption.

The study assessed six flavors of ViPova™ tea (Yunan Black, Herbal Cherry Black, Earl Grey, Herbal Bengal Chai, Herbal Masala Chai and Decaf English Breakfast), ViPova™ Columbian Supremo Coffee, ViPova™ Hot Chocolate and Lexaria Energy Foods’ Chocolate Berry Date and Cashew Berry Date protein-energy bars.

Six healthy human subjects (3 male and 3 female) between the ages of 22 and 65 years of age were recruited for the study. Subjects were screened for cardiovascular and allergic response to hemp products, were non-smokers and did not have any history of substance or alcohol abuse. One product was studied per day across all six subjects, with each subject consuming a full product serving size. Subjects were required to refrain from eating food or using vape products for at least 12 hours before test article administration on each day of the study. Nitric oxide levels in the test subjects were assessed using a commercially available, colorimetric test kit designed to quantify systemic nitric oxide via a detectable salivary marker. Immediately before test article administration each day, all subjects were required to demonstrate a negative baseline nitric oxide saliva test. Subjects were considered to have a negative test strip reading at a level of 20 µM according to the test strip scale, and positive readings anywhere above this. Subjects performed salivary nitric oxide testing at 15, 30, 45 and 60 minutes’ post-consumption of each product. All subjects remained sedentary from baseline through to the completion of testing for each product.

In addition to the above described scientific testing and validation studies, Lexaria has also conducted various cannabinoid formulation experiments, together with potential DehydraTECH ™ licensee partners, on chocolates, candies, gummies, mouth-melts, chocolate bars, protein bars, beverages such as beer, spices, tea, coffee, supplements and more over the past several years. Beverage formulations have produced cannabinoid water-based products including de-alcoholized beer that mask unwanted cannabis flavor and are fast acting. Chocolate formulations were reported as being the fastest acting, most consistent, and best-tasting products relative to comparator control formulations in approximately 70% of cases in a recent 2017 consumer study. As well, on March 22, 2016, Lexaria announced results from another chocolate formulation consumer study in which test subjects ranked those chocolates that had been created with Lexaria’s technology as the best tasting, most palatable and providing the best overall experience of the chocolates sampled. Furthermore, the test subjects in that study indicated a time of onset of the cannabis oil effects in as little as 15-20 minutes on average. The study included 12 volunteers who were all regular cannabis consumers with experience ingesting conventional edibles. All chocolates used in the study were blinded (unmarked) in order that the subjects could not discern the product formulations applied.

~~Technology out-licensing~~

On May 14, 2016, the Company entered into a Licensing Agreement allowing the Licensee, for a two-year period, to utilize the Company’s technology to create, test, manufacture, and sell marijuana-infused consumable and/or topical products, in the state of Colorado, with an option of extending the terms of the Licensing Agreement to Washington, Oregon, and California. In addition to the granting of the license, the Company will provide support services to the Licensee in connection with the use of the Company’s technology during the term of the Licensing Agreement. The Licensing Agreement is the first contracted, predictable, and significant revenue stream to be achieved as a direct result of Lexaria’s technological advantage in the marketplace. Under the terms of the Licensing Agreement, the Licensee will pay a minimum of $122,000 in pre-defined staged payments to Lexaria over the initial two-year term. As per the Licensing Agreement, if the Licensee were to introduce certain product lines utilizing Lexaria’s technology in each of the four states contemplated, Lexaria could expect to receive a maximum of $1,064,000 over approximately 3.5 years, and the Licensee would enjoy semi-exclusivity to introduce its products in each of those states. As of November 30 2017 the company has recorded $55,167 over the life of the contract to date, with $10,000 as a current receivable corresponding to the areas under the license agreement where the licensee has been active to-date.

The continuation of our business interests in these sectors is dependent upon obtaining further financing, a successful programs of development, and, ultimately, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

We are not yet profitable and have not yet demonstrated our ability to generate significant revenues from our business plan. We will require additional corporate funds if our existing capital is not sufficient to support the Company until potential future profitability is reached. There are no assurances that we will be able to obtain further funds required for our long-term operations. We do not expect to require additional operating capital during our fiscal 2018 year. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other longer-term obligations as they become due. In such event, we could be forced to scale down or perhaps even cease our operations. There is uncertainty as to whether we can obtain additional long-term financing if we do in fact require it.

Our business plan does not anticipate that we will hire a large number of employees or that we will require extensive office space. We expect to be able to utilize contracted third parties for most of our production and distribution needs, instead focusing on our capital on higher value added aspects of the business such as research and development, and scientific testing. We have no current plans to build our own production facility.

Our company relies on the business 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 evaluate business opportunities.

~~Competition~~

The legal marijuana industry is comprised of several sub-sectors, and is legal under different guidelines in many states though it remains illegal under most federal laws. Notwithstanding, the overall sector is generally recognized to be one of the fastest growing in the USA, with state-legal revenue of over $8 billion in 2016. Independent projections and publicized reports expect revenue of $20 billion or more in 2020, both as the sector gains in credibility and acceptance, and as more and more states legalize either medical use or adult recreational use; or both. In any fast growing industry, competition is expected to be both strong and also difficult to evaluate as to the most effective competitive threats. While we are an early adopter within the cannabinoid delivery sector, there are already reports of more than 300 public companies that have claimed to be involved in the sector in some fashion; and an unknown number of private companies. Our current strategies may prove to be ineffective as the sector grows and matures, and if so, we will have to adapt quickly to changing sectoral circumstances. Accordingly, the Company intends to aggressively pursue technology out-licensing opportunities not only within the cannabinoids sector where it is already active, but also across other sectors where its DehydraTECH^TM ~~technology is patent allowed and/or pending, including the opportunities in the vitamin and supplements sector, the pain relief sector and the nicotine products sector.~~

Competition in alternative health sectors and in consumer products in the USA is fierce. We expect to encounter competitive threats from existing participants in the sector and new entrants. Although PoViva Tea LLC has filed patent applications to protect intellectual property, there is no assurance that patents beyond those already issued will be granted nor that other firms may not file superior patents pending. Food supplements, organic foods, and health food markets are all well established and our Company will face many challenges trying to enter these markets. Lexaria is also aware of various competing technologies that exist in the marketplace that claim to also enhance the bioabsorption of cannabinoids as Lexaria has demonstrated through repeated~~in vitro~~ ~~and~~~~in vivo~~ ~~scientific testing with its patented DehydraTECH~~^TM technology. By and large, these technologies are all forms of nanotechnology that generally claim to enable the formation of microencapsulated microemulsions of cannabinoid active ingredients. These technologies can enable exceptional water solubility of cannabinoid ingredients and can impart improved intestinal bioabsorption as a result. However, it is Lexaria’s belief that its patented DehydraTECH^TM technology 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 a food and beverage formulation perspective and superior scalability and cost effectiveness from a manufacturing perspective. Lexaria believes that its DehydraTECH^TM technology is, therefore, significantly distinguished from competing technologies in these respects, with a view to growing the breadth and number of licensees that will adopt its technology for their product offerings going forward. Lexaria believes that these competitive advantages together with its wealth of scientific data showing noteworthy bioabsorption enhancements with its DehydraTECH^TM technology constitute a compelling value proposition for its prospective licensees, and it intends to continue to pursue license arrangements not only within the cannabinoids edibles sector where it is already active, but also in the various other bioactive ingredient sectors identified in its issued and pending patent applications.

~~Compliance with Government Regulation~~

At least 24 States in the USA have passed some form of legislation related to that state’s permission to grow, cultivate, sell or use marijuana either for medical purposes or for recreational or “adult use” purposes; or both. The various state legislation is not necessarily harmonious with one another, leading to potential conflicts between state laws. It is most often not legal to transport cannabis-related products across state lines.

Lexaria does not “touch the plant” in any location within or outside of the USA. We comply with federal law that provides for certain exemptions for agricultural (industrial) hemp and certain byproducts to be manufactured and sold in the US. The DehydraTECH^TM technology may have applications within the legal marijuana sector and we may seek to license that technology to companies that have met and comply with state regulations for the sale or distribution of cannabis related products in any particular jurisdiction.

Lexaria’s position is that, just as a telephone company provides communications services, and an electric company provides electrical power, our provision of technological services to a state-legal cannabis company is in compliance with laws and required regulations.

~~Lexaria’s patented DehydraTECH~~^TM technology may also have application in completely separate sectors such as vitamins, non-steroidal anti-inflammatories, and nicotine. We have no products nor operations in any of these sectors today. If we enter any of these sectors at any time, we will be exposed to and of necessity will have to comply with, all local, state and federal regulations in each of those sectors.2021. As a result of the ~~possibility~~Disposition, CanPharm assigned to the purchaser, Hill Street, license agreements with three existing non-related party licensees.

In consideration for the Assets, Hill Street provided CanPharm with C$350,000 cash, a promissory note bearing a principal amount of ~~Lexaria being involved~~C$2,000,000 and bearing an interest rate of 10% (the “Note”) and C$1,500,000 in shares of Hill Street, issued in three tranches over a ~~number~~period of ~~disparate~~16 months from the closing date. The repayment of the Note does not have a fixed maturity date and is based on quarterly installments equal to 5% of the gross sales realized by Hill Street of DehydraTECH enabled products. Due to the uncertainty pertaining to the settlement of the Note, management concluded that the note had $Nil value at the time of the sale and was recorded as such. Some of the factors considered in the $Nil valuation of the Note were that the legal sales of THC products in the US and Canada have little or no history which made the expectant quarterly payments very difficult to forecast. Further, Hill Street had no experience selling THC products and at the time of the sale was not licensed to produce and sell such products. Therefore, the Company considered risk of default high and the collectability of the Note as highly doubtful. Since the date of sale Hill Street has repaid $5k in the year-ended August 31, 2021. We have received a further $16k in the nine months ended May 31, 2022, included in other revenues, as payment toward the accumulated interest on the Note.

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Impact of COVID-19

The COVID-19 pandemic continues to present uncertainty and unforecastable new risks to the Company and its business ~~sectors, compliance~~plan. Restrictions on national and international travel and required business closures present challenges in carrying out normal business activities related to corporate finance efforts and the pursuit of new customers throughout North America who might otherwise access the retail products of our licensees. As a result, the pandemic has increased risk of lower revenues and higher losses. To date, we have not experienced a material impact on our financial statements, impairments of any of our assets or any major business disruptions, including with ~~government regulations could require significant resources~~our vendors.

The extent to which the COVID-19 pandemic will impact the progress of our research and ~~expertise~~development programs is subject to future developments which are highly uncertain and cannot be predicted with confidence. We continue our efforts to be proactive in managing the impact from the pandemic, including various actions to communicate with suppliers, customers, and project participants as we may deem appropriate.

We have made modifications to our ~~company.~~normal operations including requiring team members to work remotely on a staggered basis. To the extent possible, we are conducting business as usual, with necessary or advisable modifications to employee travel. At this time, these measures will continue in force for the near term.

~~Significant Acquisitions~~

We will continue to actively monitor the rapidly evolving situation related to COVID-19 and ~~Dispositions~~

may take further actions that alter our operations, including those that may be required by federal, state, provincial, or local authorities, or that we determine are in the best interests of our employees and other third parties with whom we do business. We do not ~~intend~~know when, or if, it will become practical to purchase any significant equipment over the twelve months other than office computers, furnishings, and communication equipment as required, although that strategy could change if food manufacturing considerations demand it.

~~Contractors~~relax or eliminate some or all these measures entirely.

We primarily use sub-contractors and consultants in the intellectual property development and licensing, and alternative health product sectors. We primarily engage with consultants to serve our executive needs.

The Company has an agreement with CAB for a consulting fee of $12,000 per month. The term of the agreement is two years but can be terminated by either party by providing two months notice. The Company may pay Mr. Bunka a bonus from time to time, at its sole discretion. Mr. Bunka will be entitled to receive common stock-based and stock option based bonuses upon achieving certain milestones during the time of his consultancy with the Company. These milestones are during the first 12 months after the date of the agreement with CAB,:

	*~~Revenue Incentive Milestones (Revenue Incentives “A”)~~*
	•	Upon the Company achieving non-refundable revenues of $200,000 to any single customer in any consecutive 60-day period, CAB would be entitled to an award of 100,000 restricted common shares of the Company and after the first 12-month period, expiring after 24 months of the amended agreement, upon the Company achieving non-refundable revenues of $200,000 to any single customer in any consecutive 60- day period, CAB would be entitled to an award of 50,000 restricted common shares of the Company. These awards are limited to one payment per customer during the 24-month period but payable for each customer that meets the revenue thresholds.
	•	Upon the Company achieving non-refundable revenues of $500,000 in any fiscal quarter would result in an award to CAB of 200,000 common shares of the Company and after the first 12 months, expiring 24 months after the amended agreement, the Company achieving non-refundable revenues of $500,000 in any fiscal quarter would result in an award to CAB of 100,000 common shares of the Company. These awards are limited to one payment per fiscal quarter.

	*~~Intellectual Property Milestones (IP Incentives “B”)~~*
	•	During the term of the agreement, for each provisional patent application substantively devised by CAB and successfully created, written and filed with the US Patent Office for the Company’s Technology, CAB will be entitled to an award of 250,000 restricted common shares of the Company.

On June 1, 2017, the Company appointed Mr. Allan Spissinger as acting CFO, Corporate Secretary and Treasurer. The Company executed a twelve month consulting contract with M&E Services Ltd., a wholly owned company by Mr. Allan Spissinger, with monthly compensation of CAD$8,000 superseding the previously CAD$3,400 plus hourly billing for additional work and applicable taxes. The Company may pay Mr. Spissinger a bonus from time to time, at its sole discretion. Mr. Spissinger was awarded 200,000 incentive stock options exercisable at $0.37 vesting immediately. Mr. Spissinger will be entitled to receive additional common stock-based and stock option based bonuses upon achieving certain milestones during the time of his consultancy with the Company. These milestones are during the first 12 months after the date of the agreement with M&E Services Ltd.:

~~Revenue Incentives “A” as defined above.~~

The Company appointed Mr. John Docherty as President of Lexaria effective April 15, 2015. On March 1, 2017, the Company executed a twenty four month consulting contract with Docherty Management Limited, solely owned by Mr. John Docherty with monthly compensation of CAD$15,000 plus applicable taxes, superseding the previous agreement with monthly compensation of CAD$12,500 plus applicable taxes. The Company may pay Mr. Docherty a bonus from time to time, at its sole discretion. Pursuant to the previous agreement, Mr. Docherty received 800,000 stock options and 924,000 restricted common shares of the Company. Mr. Docherty will be entitled to receive additional common stock-based and stock option based bonuses upon achieving certain milestones during the time of his consultancy with the Company. These milestones are during the first 12 months after the date of the agreement with Docherty Management Ltd.:

	•	~~Revenue Incentives “A” as defined above.~~
	•	~~IP Incentives “B” as defined above.~~

On June 19, 2017, the Company executed a contract with Alex Blanchard Capital as manager for investor relations and communications. The agreement is for six months continuing month to month and may be terminated thereafter with one month’s notice for CAD$7,500 per month. Mr. Blanchard was granted 200,000 warrants exercisable at $0.29 and 300,000 stock options exercisable at $0.295 vesting 100,000 options at 1st – 3rd anniversaries of the contract provided that the contract is not terminated. Mr. Blanchard will be entitled to receive additional common stock-based and stock option based bonuses upon achieving certain milestones during the time of his consultancy with the Company. These milestones are during the first 12 months after the date of the agreement with Alex Blanchard Capital:

~~Revenue Incentives “A” as defined above.~~

We do not expect any material changes in the number of contractors over the next 12 month period although individual personnel changes and fluctuations should always be expected. We do and will continue to outsource contract employment as needed. However, with product advancement or retail acceptance of our new products, we may need to retain additional contractors particularly in the fields of product manufacturing, development, sales and distribution. It is not possible to accurately project potential needs into the future based on circumstances that may or may not occur.

Off-Balance Sheet Arrangements

We have no ~~significant~~ off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Critical Accounting Estimates

Our consolidated financial statements and accompanying notes are prepared in accordance with ~~generally accepted~~US GAAP. These accounting principles ~~used in the United States. Preparing financial statements requires~~require management to make certain estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue, and ~~expenses.~~expenses during the periods reported. These estimates, judgments and assumptions are ~~affected by management's application of accounting policies.~~reasonable, based on information available to management at the time that such estimates, judgments and assumptions are made. We believe that understanding the basis and nature of the estimates, judgments and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financials. For a discussion of our critical accounting estimates, please read Note 2 to our financial statements in our Annual Report on Form 10-K for the year ended August 31, 2021. There have been no material changes to the critical accounting estimates previously disclosed in our Annual Report on Form 10-K for the year ended August 31, 2021.

~~Equipment~~

~~Equipment is~~Capital Assets

Capital assets are stated at cost less accumulated depreciation and depreciated using the straight-line method over ~~its~~their useful ~~life~~lives or otherwise by units of ~~five years.~~production.

~~Patents~~

~~Capitalized~~

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Intellectual Property

US patent costs, included in intellectual property, represent legal costs incurred to establish US-granted patents. ~~When patents reach a mature stage, any associated legal costs are comprised mostly of maintenance fees and are expensed as incurred. Capitalized~~These capitalized patent costs are amortized on a straight-line basis over the remaining life of the patent. When US patents reach a mature stage, any associated legal costs, including typical maintenance fees, are expensed as incurred. In the nine months ended May 31, 2022, the Company recognized $81k (May 31, 2021 - $79k) attributable to capitalized patents. All other patent costs are expensed when incurred.

Revenue Recognition

Product ~~revenue~~Revenue

Revenue from the sale of ~~health~~ products is ~~generally~~ recognized when ~~persuasive evidence of~~ an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably ~~assured. In most cases, these conditions are met when the product is shipped to the customer.~~assured, which typically occurs upon shipment. The Company reports its sales net of ~~the amount of~~ actual sales ~~returns and~~returns.

Licensing Revenue from Intellectual Property

We recognize revenue for license fees at a point in time following the ~~amount~~transfer of ~~reserves established~~our intellectual property, our patented lipid nutrient infusion technology DehydraTECH for ~~anticipated sales returns based upon historical return rates. Sales tax collected from customers is excluded from net sales.~~

~~Licensing revenue~~

Lexaria also enters into agreements to license out its patented technology that can include various combinations of services. Where elements are delivered over different periods of time, and when allowed under U.S. GAAP, revenue is allocatedinfusing APIs, to the ~~respective elements based~~licensee, which typically occurs on delivery of documentation.

Usage Fees from Intellectual Property

We recognize revenue for usage fees when usage of our DehydraTECH intellectual property occurs by licensees infusing an API into one or more of their ~~relative selling prices at~~product lines for sale.

Funding Requirements

We anticipate that our expenditures will increase in connection with our ongoing R&D program, specifically with respect to our animal and human clinical trials of our DehydraTECH formulations for the ~~inception~~purposes of treating hypertension and infectious diseases. As we move forward with our Investigational New Drug application with the ~~arrangement,~~FDA, we anticipate that our expenditures will further increase and ~~revenue is recognized as each element is delivered.~~accordingly, we expect to incur increased operating losses and negative cash flows for the foreseeable future.

Through May 31, 2022, we have funded our operations primarily with proceeds from the sale of our common stock. The Company uses a hierarchy to determine the fair value to be used for allocating revenue to elements: (i) vendor-specific objective evidence of fair value (“VSOE”), (ii) third-party evidence and (iii) best estimate of selling price (“ESP”). Generally VSOE is the price charged when the deliverable is sold separately or the price established by management for a product that is not yet sold if it is probable that the price will not change before introduction into the marketplace. ESPs are established as best estimates of what the selling prices would be if the deliverables were sold regularly on a stand-alone basis. Given Lexaria’s early stage of such line of revenue, the Company’s process for determining the VSOE and ESP requires judgment and considers multiple factors that may vary overtime depending upon the unique facts and circumstances related to each deliverable.

~~Going Concern~~

~~We have suffered~~has consistently incurred recurring losses and negative cash flows from ~~operations.~~ operations, including net losses of $5,870,492 and $2,883,483 for the nine months ended May 31, 2022, and 2021, respectively.

The continuation of our Company as a going concern is dependent upon our Company raising additional capital and/or attaining and maintaining profitable ~~operations and/or raising additional capital.~~operations. The accompanying financial statements do not include any adjustment relating to the recovery and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should our Company discontinue operations.

As The recurring losses from operations and net capital deficiency do raise doubt about the Company’s ability to continue as a ~~result~~going concern within one year following the date that these consolidated financial statements are issued. As of the ~~financings completed during fiscal 2017 and ongoing exercises this quarter, management believes it has sufficient funds to meet its obligations as they become due for the next twelve months.~~

~~Accounting Pronouncements~~

~~In May 2014, the Financial Accounting Standards Board (the “FASB”) issued a new standard related to the revenue recognition. Under the new standard, recognition~~issuance date of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenuethese consolidated interim financial statements, we expect our cash and cash ~~flows arising~~equivalents of approximately $7.0m as at May 31, 2022, will be sufficient to fund our operating expenses and capital expenditure requirements through the forthcoming 12 months from ~~contracts with customers. The FASB has recently issued several amendments to~~ the ~~standards, including clarification on the accounting for licenses of intellectual property and identifying performance obligations.~~

The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at theissuance date of ~~initial application (the cumulative catch-up transition method). The Company will apply the full retrospective approach to adopt the standard but does not anticipate that~~ this ~~standard will have a material impact on its consolidated financial statements.~~report.

In January 2016, FASB issued a new standard to amend certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Most prominent among the amendments is the requirement for changes in fair value of equity investments, with certain exceptions, to be recognized through profit or loss rather than other comprehensive income. The new standard will be effective for the Company beginning September 1, 2018. The standard is not expected to have any impact on the Company’s financial statements.

In February 2016 FASB issued ASU No. 2016-02, Leases (Topic 842) which supersedes FASB ASC Topic 840, Leases (Topic 840) and provides principles for the recognition, measurement, presentation, and disclosure of leases for both lessees and the lessors. The new standard requires the lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. The classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The standard is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted upon issuance. When adopted, the Company does not expect this guidance to have a material impact on its consolidated financial statements.

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In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting. Under ASU 2016-09, companies will no longer record excess tax benefits and certain tax deficiencies in additional paid in capital (“APIC”). Instead, they will record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement and the APIC pools will be eliminated. In addition, ASU 2016-09 eliminates the requirement that excess tax benefits be realized before companies can recognize them. ASU 2016-09 also requires companies to present excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity. Furthermore, ASU 2016-09 will increase the amount an employer can withhold to cover income taxes on awards and still qualify for the exception to liability classification for shares used to satisfy the employer’s statutory income tax withholding obligation. An employer with a statutory income tax withholding obligation will now be allowed to withhold shares with the fair value up to the amount of taxes owed using the maximum statutory rate in the employee’s applicable jurisdiction(s). ASU 2016-09 requires a company to classify the cash paid to a tax authority when shares are withheld to satisfy its statutory income tax withholding obligation as a financing activity on the statement of cash flows. Under current U.S. GAAP, it is not specified how these cash flows should be classified. In addition, companies will now have to elect whether to account for forfeitures on share-based payments by (1) recognizing forfeiture awards as they occur or (2) estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change, as in currently required. The amendments of this ASU are effective for annual reporting periods beginning after December 15, 2016, with early adoption permitted but all of the guidance must be adopted in the same period. The Company does not grant non-statutory stock options and, as such, does not expect this guidance to have a material impact on its consolidated financial statements.

In June 2016, the FASB issued a new standard to replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss credit loss estimates. For trade and other receivables, loans and other financial instruments, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. Credit losses relating to available for sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. The new standard will be effective for Lexaria beginning September 1, 2020, with early adoption permitted. Application of the amendments is through a cumulative-effect adjustment to deficit as of the effective date. The Company is currently assessing the impact of the standard on its consolidated financial statements.

Results of Operations ~~– Three Months~~for our Period Ended ~~November 30, 2017~~May 31, 2022, and ~~2016~~2021

~~The following summary of our results of operations should be read in conjunction with our financial statements~~

Our net loss and comprehensive loss for the ~~period ended November 30, 2017, which are included herein.~~

~~Our operating results for the three~~nine months ended ~~November 30, 2017 and 2016~~ and the changes between those periods for the respective items are summarized as follows:

Three Months Three Months Change
Ended Ended Between the
November 30 November 30 Periods
2017 2016
$ $ $
Sales 24,635 9,225 15,410
Cost of Goods Sold 6,099 888 5,211
General and Administrative 593,703 405,466 188,237
Impairment of Inventory 3,546 3,424 122
Net loss (578,713 ) (400,553 ) (178,160 )

~~Our financial statements report a net loss~~

	Nine Months Ended
Results of Operations	May 31,
	2022			2021			Change
	$			$			$
Revenue		144,247			691,717			(547,470	)
Research and development		1,486,489			823,102			663,387
Consulting fees & salaries		1,672,825			2,304,280			(631,455	)
Legal and professional		439,942			594,158			(154,216	)
Other general and administrative		2,384,893			1,199,327			1,185,566
Discontinued operations		-			(22,000	)		22,000
Net Loss		(5,870,492	)		(2,861,483	)		(3,009,009	)

Revenue

Product revenues of ~~$578,711~~$112k and licensing usage fees of $16k for the ~~three month~~ period ended ~~November 30, 2017~~May 31, 2022, constitute a significant decline in intermediate product sales and related licensing usage fees. Our primary licensee experienced significant delays in the rollout of their products with a large national chain, creating a surplus of inventory from 2021 product manufactured by Lexaria. The impacts of COVID-19 including supply chain issues and the delays in legislative amendments effecting the CBD industry in the US, have left the market flat throughout 2021 and 2022.

The abilities of other licensees to generate ongoing sales, thereby increasing product and usage fees, are expected to increase in the near term as new products are developed and gain market acceptance. We have continued strong interest in our intermediate products in the US, Japan and Europe but cannot predict how long the current market conditions will affect purchasing decisions of retail customers that ultimately affect the consumer product manufacturers that utilize our intermediate products. Nor can we predict when consumer spending might show sustainable growth in the effected market sectors that could translate into substantially increased licensing or usage revenues.

Our licensing revenues consist of IP licensing fees for the transfer of the Technology and usage fees that occur over time. IP licensing fees are due at the signing of definitive agreements for the Technology and can include payments due upon transfer of the Technology and installment payments that are receivable within 12 months. Licencing revenues are expected to increase in late 2022 and early 2023 as our newly signed licensees introduce their products using our DehydraTECH technology to market.

Subsequent to the quarter ended May 31, 2022, the Company announced the granting of an exclusive licence (subject to two previously issued licenses in Japan) to Premier Wellness Science Co., Ltd. for the Japanese non-pharmaceutical market for use with CBD and hemp ingredients in oral liquid and non-liquid products, as well as for topical, haircare, lip-care and cosmetics products. In order to retain ongoing exclusivity, the negotiated minimum quarterly payments to Lexaria begin September 1, 2022, and, during the first five years of the Agreement, amount to US$4,527,500. In addition to the minimum payments, Lexaria will also receive royalty revenue from DehydraTECH licensed product sales.

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Research and Development

Expenditures on R&D increased by $633k for the period ended May 31, 2022, as the Company undertook several studies within its 2022 applied research and development program. Our primary focus in R&D has been on DehydraTECH-CBD to treat hypertension and our current study combined with our preparations for the filing of an IND (Investigative New Drug) application has contributed to a majority of the current expenditures.

Consulting Fees and Salaries

Our consulting fees decreased by $631k primarily due to non-cash stock-based compensation on options granted and vested ($728k) in the nine months ended May 31, 2021 and offset by a $99k increase in salaries in 2022 due to hiring within our R&D, investor relations and accounting departments.

Legal and Professional Fees

Our professional fees decreased by $154k during the period compared to ~~2016 where we incurred a net loss of $400,553. During~~ the ~~three month period ended November 30, 2017, our general~~prior year period. The previous year’s expenditures were higher due to increased patent and trademark filings, the up-list to the Nasdaq Capital Markets, and additional advisory services utilized. We recognize certain legal fees, tax advice fees, and accounting services all as “Professional Fees.”

General and Administrative

General and administrative expenses ~~were significantly higher compared to~~during the ~~three~~nine months ended November 30, 2016, which is a result of the increases in advertising and promotion to potential licensees and partners, patent and trademark filing costs and increasing R&D expenditures. These increasesMay 31, 2022, are ~~in line with expectations for executing our business plan.~~

~~Revenue increases were primarily based on Licensing fees in line with contract requirements, while consumer product sales remain low~~up significantly year over year due to ~~challenges~~increased advertising ($563k) and unrealized losses increased by $737k. Otherwise expenses were generally lower. A gain on the sale of assets ($1.5m) was recognized in ~~securing expansive distribution opportunities, production challenges and payment processing changes. The Company continues to pursue more widespread distribution possibilities which have~~ the ~~potential to unlock more significant consumer revenues.~~nine months ended May 31, 2021.

The trend of hemp oil fortified foods, and hemp seed products, gaining consumer acceptance continued through the period ended November 30, 2017, and provides a reason to believe that sales could increase. Those trends should support higher potential consumer product sales. Release of the TurboCBD product in fiscal 2017 was successful but ongoing sales were limited by changes to payment processing services outside of the Company’s control. At the time of this report the Company had extinguished its supplies of certain products like protein bars and the lack of inventory was also a negative impact on consumer product sales potential.

For fiscal 2018 the Company expects to derive ever larger proportions of its revenues from technology licensing to third parties. At the time of this report the Company has entered more than 10 formal letters of intent or definitive agreements and is negotiating more. The Company also has formed a joint venture to develop, produce, and sell a line of healthy edible cannabinoid products using our patented technology. It is the Company’s view that the November 2017 grant of patent 9839612 and its expanding patent portfolio is a positive step in enabling the generation of more significant revenues during fiscal 2018.

We do not expect that all of the Letters of Intent into which we enter will result in definitive agreements with paying customers and cannot predict how many will. We believe that strengthening and expanding our intellectual property portfolio and conducting supportive R&D will jointly contribute to strengthening revenue prospects.

Liquidity and Financial Condition

November 30 August 31
Working Capital 2017 2017
$ $
Current assets 2,417,202 2,795,495
Current liabilities 95,705 92,347
Working capital balance (deficiency) 2,321,497 2,703,148

The Company’s working capital balance decreased during the three months ended November 30, 2017, as a result of its executing its operating plan via increased activities in potential licensee outreach, research and development and other aspects of our business plan utilizing funding from financing activities during fiscal 2017 and the ongoing exercises of options and warrants.

Three Months Ended
November 30 November 30
Cash flows 2017 2016
$ $
Cash flows used in operating activities (570,321 ) (100,987 )
Cash flows used in investing activities (85,715 ) (13,684 )
Cash flows provided by financing activities 282,401 145,508
Increase (decrease) in cash (323,635 ) 30,837

	May 31,			August 31,
Working Capital	2022			2021
	$			$
Current assets		8,291,474			12,442,940
Current liabilities		(206,826	)		(153,276	)
Net Working Capital		8,084,648			12,289,664

Nine Months Ended

May 31,

Cash Flows

2022

2021

$

$

Cash flows (used in) provided by operating activities

(3,702,724 )

(2,877,489 )
Cash flows (used in) provided by investing activities

(130,595 )

193,882

Cash flows (used in) provided by financing activities

(33,395 )

9,415,370

Net cash flows (used in) discontinued operations

-

83,000

Increase (decrease) in cash

(3,866,714 )

6,814,763

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Operating Activities

~~The increase in the net~~

Net cash used in operating activities for the nine months ended May 31, 2022, increased by $792k for the period compared with cash used in operating during the ~~three months ended November 30, 2017, is primarily the result of the Company’s execution of its operating plan with available funding compared to cost containment during the~~same period ~~ended November 30, 2016.~~in 2021. This difference was largely due to the increased ~~costs~~expenditures pertaining to ~~consulting, advertising~~R&D and ~~promotion,~~our stakeholders outreach programs.

Investing Activities

Net cash used in investing activities increased by $324k due to increased spending on capitalized US patents filings and the purchase of equipment in the nine months ended May 31, 2022, compared to 2021 which saw an inflow of cash from the sale of assets to Hill Street.

Financing Activities

Net cash provided from financing activities during the period ended May 31, 2022, is attributed to the amortized right-of-use lease payments. Cash provided by financing activities in the nine months ended May 31, 2021, of $9.4m primarily related to the underwritten public offering that closed January 21, 2021.

Liquidity and Capital Resources

We have accumulated a large deficit since inception that has primarily resulted from executing our business plan, including R&D expenditures, in seeking to identify and develop our intellectual property patents for licensing and product creation. We expect to continue to incur losses for at least the short term.

To date, we have obtained cash and funded our operations primarily through equity financings and limited amounts from revenue generation while our licensees ramp up production and market expansions. We expect to continue to evaluate various funding alternatives on an ongoing basis as needed to maintain operations, to continue our research programs and to expand our patent portfolio. If we determine it is advisable to raise additional funds, there is no assurance that adequate funding will be available to us or, if available, that such funding will be available on terms that we or our stockholders view as favorable. Market volatility and ~~trademark related filings,~~global economics may have a significant impact on the availability of funding sources and the terms at which any funding may be available.

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Short Term Liquidity

On May 31, 2022, we had $7.0m cash and $8.11m in working capital. Based on our current and upcoming research and development programs and ~~travel.~~our projected general and administration expenditures, we have determined that our cash resources are sufficient to allow us to continue operations through at least the next twelve months from the issuance date of this quarterly report.

~~Investing Activities~~

~~During~~Long Term Liquidity

It will require substantial cash to achieve our objectives for developing and patenting our intellectual property across all applicable market and industry segments. This process typically takes many years and potentially millions of dollars for each segment. If we pursue full commercial exploitation of all applicable market and industry segment opportunities, we will need to obtain significant funding from existing or new relationships, increasing revenue streams or from other sources of liquidity such as the ~~three months ended November 30, 2017,~~sale of equity, issuance of debt or other transactions.

Cash requirements will vary depending on the ~~Company continued its investment in expanding its patent applications and acquired 100% ownership~~results of our ~~subsidiary PoViva Tea LLC.~~research programs and the requirements of each industry segment pursued. Pursuit of each segment will progress or be curtailed based on available sources of cash with which to execute individual segment business plans. The requirements will also be affected by transactions with existing or new relationships and the depth of regulatory requirements in each segment for compliance required to approve our IP and to market and license it. These changes to requirements and transactions may impact our liquidity as well as affect our expenditures.

~~Financing Activities~~

~~During the period ended November 30, 2017, the Company raised a total of $282,401 from equity issuances, relating to the exercise of its outstanding stock options and warrants.~~

Item 3. Controls and Procedures

Management’s Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under theSecurities Exchange Act of 1934,, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our ~~president (also our principal executive officer)~~President and Chief Executive Officer (Principal Executive Officer) and our ~~chief operating~~Chief Financial Officer (Principal Financial and ~~financial officer (also our principal financial and accounting officer)~~Accounting Officer) to allow for timely decisions regarding required disclosure.

As of ~~November 30, 2017,~~May 31, 2022, the ~~end of our~~ quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our ~~president~~CEO, President and ~~our chief executive and chief financial officer (also our principal executive and accounting officers),~~CFO, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our ~~president~~CEO, President, and ~~chief executive and financial officer (also our principal executive and accounting officers)~~CFO concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of ~~November 30, 2017.~~May 31, 2022.

Management’s Report on Internal Control over Financial Reporting

~~Our management~~

Management is responsible for establishing and maintaining adequate internal control over financial reporting. Responsibility estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control include providing management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management’s authorization and recorded properly to permit the preparation of consolidated financial statements in conformity with ~~accounting principles generally accepted in the United States.~~US GAAP. Our management assessed the effectiveness of our internal control over financial reporting as of ~~November 30, 2017.~~May 31, 2022. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) inInternal Control-Integrated ~~Framework~~.Framework. Our management has concluded that, as of ~~November 30, 2017,~~May 31, 2022, our internal control over financial reporting is effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with US ~~generally accepted accounting principles.~~GAAP. Our management reviewed the results of their assessment with our ~~Board of Directors.~~Board.

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Inherent limitations on ~~effectiveness~~Effectiveness of ~~controls~~Controls

Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, regulations, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human ~~failures.~~error. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control over Financial Reporting

During the quarter ended May 31, 2022, our controls and controls processes remained consistent with our fiscal year ended August 31, 2021. There have been no changes in our internal controls over financial reporting that occurred during the ~~period~~quarter ended ~~November 30, 2017,~~May 31, 2022, that have materially or are reasonably likely to materially affect our internal controls over financial reporting.

Our control processes are designed to include remote workers, which we have utilized for many years. The advent of the COVID-19 pandemic has not materially impacted our internal controls over financial reporting other than increasing requirements for social distancing and some additional remote working requirements for staff.

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PART II

II—OTHER INFORMATION

Item 1. Legal Proceedings

We know of no ~~other~~ material, existing or pending legal proceedings against our ~~company,~~Company, nor are we involved as a plaintiff in any other material proceeding or pending litigation. There are no ~~other~~ proceedings in which any of our directors, executive officers, or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.

Item 1A. Risk Factors

Much of the information included in this quarterly report includes or is based upon estimates, projections or other "forward looking statements". Such forward looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.

~~Risks Associated~~

The risks associated with ~~Our Business~~

~~Because cannabis is a controlled substance in some regulatory jurisdictions~~ our ~~Licensee’s operations may be subject to regulatory actions.~~

Lexaria and its subsidiaries are not involved directly or indirectly in the cultivation, processing, distribution, or utilization of Cannabis or Cannabis derived components. All of Lexaria’s consumer products utilize legally sourced Hemp and Hemp components in their production. Lexaria has an ancillary involvement exposure via out-licensing of its patented technology to licensees that may utilize the technology in the production of products that contain contents which are locally or state approved but federally controlled. Where licensee’s products contain controlled contents any revenue streams from such licensee’s may be interrupted by regulatory involvement in their business. It is possible some jurisdictions may even interpret Lexaria’s ancillary involvement as in contravention with regulations.

~~Lexaria has no knowledge of any non-compliance by its licensees with the regulatory framework(s) in which its licensee(s) operate.~~

~~Because there is no assurance that we will generate material revenues, we face a high risk of~~ business, ~~failure.~~

There can be no assurance that our current or future products will be successful, and we cannot be sure that our overall business model within any particular sector will ever come to fruition, and if they do, will not decline over time. We may not recover all or any portion of our capital investment in product development, marketing, or other aspects of the business. Although we will exercise due consideration in our development of new products, and the marketing of them, ultimate consumer acceptance of these products is not reliably forecastable.

~~In addition, our product development plans may be curtailed, delayed or cancelled as a result of lack of adequate capital~~common stock and other factors ~~such as weather, compliance~~were with ~~governmental regulations, current and forecasted prices for input costs of food products and changes~~those described in the estimates of costs to complete the projects. We will continue to gather information about our planned products, and it is possible that additional information may cause our company to alter our schedule or determine that a product should not be pursued at all. You should understand that our plans regarding our products are subject to change.

~~Our revenues now are generated from being a food sciences and products company. We should be considered to be a start-up: the revenue recognized~~consolidated financial statements for the ~~period~~year ended ~~November 30, 2017 was $24,635.~~

~~The food industry is highly competitive and there is no assurance that we will be successful in developing or successfully selling products.~~August 31, 2021.

The food industry is intensely competitive. We compete with numerous individuals and companies, including many food manufacturing and production companies, which have substantially greater technical, financial and operational resources and staff. Accordingly, there is a high degree of competition

Item 2. Exhibits, Financial Statement Schedules

a) Financial Statements

1) Financial statements for desirable distribution channels, “shelf space” and salespeople in both the food industries as well as the legal cannabis industries. We cannot predict if the necessary funds can be raised to assist in our ~~development of any distribution channels that may be helpful to our ability to generate sales and potential profits.~~

~~There can be no assurance that we will develop any product that will meet with widespread consumer acceptance.~~

Both new and established food and cannabis products fail to generate consumer interest on a regular basis. There is no assurance that a food or cannabis product that is successfully adopted by consumers at one time; will still be in demand at a future time. If we cannot develop and sell products in commercial quantities, our business will fail.

~~Even if we develop food or intellectual property-based products or revenue streams, the potential profitability of each depends upon factors beyond the control of our company.~~

~~The potential profitability of food products and of intellectual property revenue streams is dependent upon many factors beyond our control. For instance, prices and markets for food products~~Company are unpredictable, highly volatile, potentially subject to controls or any combination or other factors, and respond to changes in domestic, international, political, social and economic environments. These changes and events may materially affect our future financial performance. These factors cannot be accurately predicted and the combination of these factors may result in our company not receiving an adequate return on invested capital.

In addition, a product or technology that is initially successful and possibly even profitable may not remain so due to changes in consumer demand, regulatory environments, or other causes. There is no assurance that an initially successful product or technology will remain so.

~~Our failure to protect our intellectual property may have a material adverse effect on our ability to develop and commercialize our products~~

~~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. Even if patents are issued, they may not be issued with claims of sufficient breadth to protect our nutrient infusion technology or may not provide us with competitive advantage against competitors with similar products or technologies. Issued patents may be challenged, invalidated, or circumvented. If patents issued to us are invalidated or found to be unenforceable, we could lose the ability to exclude others from making, using or selling the inventions claimed. Moreover, an issued patent does not give us the right to use the patented technology or commercialize a product using the technology. Third parties may have blocking patents that could be used to prevent us from developing our products, selling our products, or commercializing our nutrient infusion technology. Others may also independently develop products or technologies similar to those that we have developed or may reverse engineer or discover our trade secrets through proper means.

Enforcing a claim that a third party infringes on, has illegally obtained or is using an intellectual property right, is expensive and time-consuming and the outcome is unpredictable. In addition, enforcing such a claim could divert management’s attention from our business. If any intellectual property rights were to be infringed, disclosed to, or independently developed by a competitor, our competitive position could be harmed. Any adverse outcome of such litigation or settlement of such dispute could subject us to significant liabilities and could put one or more of our patent pending applications at risk of being invalidated.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is risk that some of our confidential information could be compromised. This disclosure could provide our competitors with access to our proprietary information and may harm our competitive position.

~~The marketability of food products will be affected by numerous factors beyond our control which may result in us not receiving an adequate return on invested capital to be profitable or viable.~~

The marketability of food products will be affected by numerous factors beyond our control. These factors include market fluctuations in consumer preferences for various food items based on factors such as pricing, macro trends for certain ingredients or flavors, ruling by regulators on health issues associated with certain foods, and more. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable.

Both food products and cannabis products are subject to comprehensive regulation which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on our company.

Food production and safety operations, and cannabis products and sales operations, are subject to federal, state, and local laws relating to the protection of human health and safety. Food production and cannabis operations are each also subject to federal, state, and local laws and regulations which seek to maintain health and safety standards through a wide variety of regulations. Various permits from government bodies may be required by us in order to conduct our business. Regulations and standards imposed by federal, provincial, or local authorities may be changed at any moment in time and any such changes may have material adverse effects on our activities. Changes in regulations are impossible to foresee and could be disruptive or destructive to our business plans and execution. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us. Additionally, we may be subject to liability for contaminants or other damages. To date, we have not been required to spend any material amount on compliance with environmental regulations. However, we may be required to do solisted in the ~~future and~~index under Item 1 of this ~~may affect our ability to expand or maintain our operations.~~document

~~If we~~

2) All financial statement schedules are ~~unable to hire and retain key personnel, we may not be able to implement our business plan.~~

Our success is largely dependent on our ability to hire highly qualified personnel. This is particularly true in those parts of our business that are related to intellectual property generation or exploitation. These individuals are in high demand and we may not be able to attract the personnel we need. In addition, we may not be able to afford the high salaries and fees demanded by qualified personnel, or may lose such employees afteromitted because they are ~~hired. Failure to hire key personnel when needed,~~not applicable, not material or ~~on acceptable terms, would have a significant negative effect on our business.~~

~~We are not~~ the ~~"operator" of vertically integrated food production facilities, and so we are exposed to the risks of our third-party operators.~~

We rely on the expertise of contracted third-parties for their judgment, experience and advice related to the manufacturing and/or packaging of our food products. We can give no assurance that these third party operators or consultants will always act in our best interests, and we are exposed as a third party to their operations and actions and advice in those operations and activities in which we are contractually bound.

~~Our management has limited experience and training~~required information is shown in the ~~food processing and manufacturing industries, and in the cannabis products industries, and could make uninformed decisions that negatively impact our operations and our company.~~financial statements or notes thereto.

Because our management has limited experience and training in the food processing and manufacturing industry, and in the cannabis products industry, we may not have sufficient expertise to make informed best practices decisions regarding our operations. It is possible that, due to our limited knowledge, we might elect to undergo manufacturing processes and incur financial burdens that a more experienced food manufacturing team might elect not to complete. Our ability to internally evaluate food and cannabis operations and opportunities could be less thorough than that of a more highly trained management team.

~~The possession, cultivation and distribution of marijuana may under certain circumstances lead to prosecution under United States federal law, which may cause our business to fail.~~

All applicable Regulations, in the United Sates, over 20 states, including our state of incorporation, Nevada, have approved and regulate medical marijuana use. Similarly, four states have approved and regulate non-medical marijuana use by adults. However, it remains illegal under United States federal law to grow, cultivate or sell marijuana for any purpose. In that regard, the United States Justice Department has released the COLE Memorandum of 8-29-13 which states that the Justice Department will not prioritize the prosecution of marijuana related activities authorized under state laws provided that state authorities implement and enforce strict guidelines to ensure the health, safety and security of the public. Where the individual state framework fails to protect the public, the Justice Department has instructed federal prosecutors to enforce the Controlled Substances Act of 1970. The Department of Justice has not, to our knowledge, published any policy or guidance specifically regarding the participation of a United States corporation in lawful medical marijuana related activities outside of the United States.

We do not currently, nor at any time in our corporate history have we ever cultivated, grown, processed, manufactured or sold marijuana in any location. Although we believe this fact to provide protection against prosecution related to marijuana legislation, we cannot provide any assurance to that effect. We do not hold a license in any jurisdiction enabling us to grow or sell marijuana or cannabis related edibles, but because of our business model we do not feel that is a barrier to entry for us. Instead, we plan to license our technology related to bio-absorption of THC, to those entities that do have valid licenses in various North American jurisdictions to sell cannabis related edibles. If we are unable to license our technology to any valid license holders, then we may be shut out of this market.

~~Our company has no operating history and an evolving business model, which raises doubt about our ability to achieve profitability or obtain financing.~~

Our company has no significant history of operations in the legal medical marijuana sector, the legal hemp oil infused products sector, or in the food products sector. Moreover, our business model is still evolving and subject to change. Our company's ability to continue as a going concern is dependent upon our ability to obtain adequate financing and to reach profitable levels of operations. In that regard we have no proven history of performance, earnings or success. There can be no assurance that we will achieve profitability or obtain future financing.

~~Uncertain demand for our products may cause our business plan to be unprofitable.~~

Demand for medical marijuana and for cannabis or hemp related products is dependent on a number of social, political and economic factors that are beyond the control of our company. While we believe that demand for marijuana and hemp products will continue to grow across North America, there is no assurance that such increase in demand will happen or that our endeavors will be profitable.

~~We may not acquire market share or achieve profits due to competition in our industries.~~

Our company operates in highly competitive marketplaces with various competitors. Increased competition may result in reduced gross margins and/or loss of market share, either of which would seriously harm its business and results of operations. 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 its business. Some of our company's competitors are much larger and have greater access to capital, sales, marketing and other resources. These competitors may be able to respond more rapidly to new regulations or devote greater resources to the development and promotion of their business model than the company can. Furthermore, some of these competitors may make acquisitions or establish co-operative relationships among themselves or with third parties in the industry to increase their ability to rapidly gain market share.

~~Conflicts of interest between our company and our directors and officers may result in a loss of business opportunity.~~

Our directors and officers are not obligated to commit their full time and attention to our business and, accordingly, they may encounter a conflict of interest in allocating their time between our future operations and those of other businesses. In the course of their other business activities, they may become aware of investment and business opportunities which may be appropriate for presentation to us as well as other entities to which they owe a fiduciary duty. As a result, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. They may also in the future become affiliated with entities, engaged in business activities similar to those we intend to conduct.

~~In general, officers and directors of a corporation are required to present business opportunities to a corporation if:~~

~~The corporation could financially undertake the opportunity;~~
~~The opportunity is within the corporation’s line of business; and~~
~~It would be unfair to the corporation and its stockholders not to bring the opportunity to the attention of the corporation.~~

We have adopted a code of ethics that obligates our directors, officers and employees to disclose potential conflicts of interest and prohibits those persons from engaging in such transactions without our consent. Despite our intentions, conflicts of interest may nevertheless arise which may deprive our company of a business opportunity, which may impede the successful development of our business and negatively impact the value of an investment in our company.

~~The speculative nature of our business plan may result in the loss of your investment.~~

Our operations are in the start-up stage only, and are unproven. We may not be successful in implementing our business plan to become profitable. There may be less demand for our services than we anticipate. There is no assurance that our business will succeed and you may lose your entire investment.

~~Changing consumer preferences may cause our planned products to be unsuccessful in the marketplace.~~

The decision of a potential client to purchase our products may be motivated by cultural phenomena or by perceived health or nutritional benefits. The cultural desirability or popularity of hemp related products is subject to change due to factors beyond our immediate control. Similarly, the perceived nutritional or health related benefits of our products are subject to change in light of continuing research or the introduction of competitive products. Changes in consumer and commercial preferences, or trends, toward or away from cannabis or hemp related products would have a corresponding impact on the development of the market for our current and planned products. There can be no assurance that the products supplied by our company and or its partners will be successful in establishing or maintaining a significant share of the consumer market.

~~General economic factors may negatively impact the market for our planned products.~~

The willingness of businesses to spend time and money on non-essential food and health products may be dependent upon general economic conditions; and any material downturn may reduce the likelihood of consumers incurring costs toward what some may consider a discretionary expense item. Willingness by customers to buy our products may be dependent upon general economic conditions and any material downturn may reduce the potential profitability of the food sciences or medical marijuana business sectors.

~~A wide range of economic and logistical factors may negatively impact our operating results.~~

Our operating results will be affected by a wide variety of factors that could materially affect revenues and profitability, including the timing and cancellation of customer orders and projects, competitive pressures on pricing, availability of personnel, and market acceptance of our services. 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.

~~Loss of consumer confidence in our company or in our industry may harm our business.~~

Demand for our services may be adversely affected if consumers lose confidence in the quality of our services or the industry’s practices. Adverse publicity may discourage businesses from buying our services and could have a material adverse effect on our financial condition and results of operations.

~~Unethical business practices may compromise the growth and development of our business.~~

The production and sale of medical marijuana is an emerging industry in which business practices are not yet standardized and are subject to frequent scrutiny and evaluation by federal, state, provincial, and municipal authorities, academics, and media outlets, among others, Although we intend to develop our business in accordance with best ethical practices, we may suffer negative publicity if we, our partners, contractors, or customers are found to have engaged in any environmentally, insensitive practices or other business practices that are viewed as unethical.

~~The failure to secure customers may cause our operations to fail.~~

We currently do not have many long-term agreements with any customers. Many of our products and services may be provided on a “onetime” basis. Accordingly, we will require new customers on a continuous basis to sustain our operations.

~~We could be required to enter into fixed price contracts which will expose us to significant market risk.~~

Fixed price contracts require the service provider to perform all agreed services for a specified lump-sum amount. We anticipate a material percentage of our services will be performed on a fixed price basis. Fixed price contracts expose us to some significant risks, including under-estimation of costs, ambiguities in specifications, unforeseen costs or difficulties, and delays beyond our control. These risks could lead to losses on contracts which may be substantial and which could adversely affect the results of our operations.

~~If we fail to effectively and efficiently advertise, the growth of our business may be compromised.~~

The future growth and profitability of our food products business will be dependent in part on the effectiveness and efficiency of our advertising and promotional expenditures, including our ability to (i) create greater awareness of our services, (ii) determine the appropriate creative message and media mix for future advertising expenditures, and (iii) effectively manage advertising and promotional costs in order to maintain acceptable operating margins. There can be no assurance that we will experience benefits from advertising and promotional expenditures in the future. In addition, no assurance can be given that our planned advertising and promotional expenditures will result in increased revenues, will generate levels of service and name awareness or that we will be able to manage such advertising and promotional expenditures on a cost-effective basis.

~~Our success is dependent on our unproven ability to attract qualified personnel.~~

We will depend on our ability to attract, retain and motivate our management team, consultants and other employees. There is strong competition for qualified technical and management personnel in the food science sector, and it is expected that such competition will increase. Our planned growth will place increased demands on our existing resources and will likely require the addition of technical personnel and the development of additional expertise by existing personnel. There can be no assurance that our compensation packages will be sufficient to ensure the continued availability of qualified personnel who are necessary for the development of our business.

~~Without additional financing to develop our business plan, our business may fail.~~

Because we have generated only minimal revenue from our business and cannot anticipate when we will be able to generate meaningful revenue from our business, we will need to raise additional funds to conduct and grow our business. We do not currently have sufficient financial resources to completely fund the development of our business plan. We anticipate that we will need to raise further financing. We do not currently have any arrangements for financing and we can provide no assurance to investors that we will be able to find such financing if required. The most likely source of future funds presently available to us is through the sale of equity capital. Any sale of share capital will result in dilution to existing security-holders.

~~We may not be able to obtain all of the licenses necessary to operate our business, which would cause our business to fail.~~

Our operations may require licenses and permits from various governmental authorities to conduct our business activities. We believe that we will be able to obtain all necessary licenses and permits under applicable laws and regulations for our operations and believe we will be able to comply in all material respects with the terms of such licenses and permits. However, such licenses and permits are subject to change in various circumstances. There can be no guarantee that we will be able to obtain or maintain all necessary licenses and permits.

~~If we fail to effectively manage our growth our future business results could be harmed and our managerial and operational resources may be strained.~~

As we proceed with our business plan, we expect to experience significant and rapid growth in the scope and complexity of our business. We will need to add staff to market our services, manage operations, handle sales and marketing efforts and perform finance and accounting functions. We will be required to hire a broad range of additional personnel in order to successfully advance our operations. This growth is likely to place a strain on our management and operational resources. The failure to develop and implement effective systems, or to hire and retain sufficient personnel for the performance of all of the functions necessary to effectively service and manage our potential business, or the failure to manage growth effectively, could have a materially adverse effect on our business and financial condition.

~~Risks Associated with Our Common Stock~~

~~Trading on the OCTQB and CSE may be volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their shares.~~

Our common stock is quoted on the OTCQB electronic quotation service operated by OTC Markets Group Inc. Trading in stock quoted on the OTCQB is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, the OTCQB is not a stock exchange, and trading of securities on the OTCQB is often more sporadic than the trading of securities listed on a quotation system like NASDAQ or a stock exchange like Amex. Accordingly, shareholders may have difficulty reselling any of the shares. Subsequent to period end on January 4^th ~~2018, we announced trading on the OTCQX and our symbol remains unchanged.~~

Our stock is a penny stock. Trading of our stock may be restricted by the Securities and Exchange Commission’s penny stock regulations which may limit a stockholder’s ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

~~The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a stockholder’s ability to buy and sell our stock.~~

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

~~Because we do not intend to pay any dividends on our shares, investors seeking dividend income or liquidity should not purchase our shares.~~

We have not declared or paid any dividends on our shares since inception, and do not anticipate paying any such dividends for the foreseeable future. We presently do not anticipate that we will pay dividends on any of our common stock in the foreseeable future. If payment of dividends does occur at some point in the future, it would be contingent upon our revenues and earnings, if any, capital requirements, and general financial condition. The payment of any common stock dividends will be within the discretion of our Board of Directors. We presently intend to retain all earnings to implement our business plan; accordingly, we do not anticipate the declaration of any dividends for common stock in the foreseeable future.

~~Investors seeking dividend income or liquidity should not invest in our shares.~~

~~Because we can issue additional shares, purchasers of our shares may incur immediate dilution and may experience further dilution.~~

We are authorized to issue up to 220,000,000 shares. The board of directors of our company has the authority to cause us to issue additional shares, and to determine the rights, preferences and privileges of such shares, without consent of any of our stockholders. Consequently, our stockholders may experience more dilution in their ownership of our company in the future.

~~Other Risks~~

~~Protection against environmental risks.~~

~~We believe that our operations comply, in all material respects, with all applicable environmental regulations.~~

~~Our operating partners maintain insurance coverage customary to the industry; however, we are not fully insured against all possible environmental risks.~~

~~Any change to government regulation/administrative practices may have a negative impact on our ability to operate and our profitability.~~

The laws, regulations, policies or current administrative practices of any government body, organization or regulatory agency in the United States, Canada, or any other jurisdiction, may be changed, applied or interpreted in a manner which will fundamentally alter the ability of our company to carry on our business.

The actions, policies or regulations, or changes thereto, of any government body or regulatory agency, or other special interest groups, may have a detrimental effect on us. Any or all of these situations may have a negative impact on our ability to operate and/or our profitably.

~~Our by-laws contain provisions indemnifying our officers and directors against all costs, charges and expenses incurred by them.~~

Our by-laws contain provisions with respect to the indemnification of our officers and directors against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, actually and reasonably incurred by him, including an amount paid to settle an action or satisfy a judgment in a civil, criminal or administrative action or proceeding to which he is made a party by reason of his being or having been one of our directors or officers.

Investors’ interests in our company will be diluted and investors may suffer dilution in their net book value per share if we issue additional shares or raise funds through the sale of equity securities.

Our constating documents authorize the issuance of 220,000,000 shares of common stock with a par value of $0.001. In the event that we are required to issue any additional shares or enter into private placements to raise financing through the sale of equity securities, investors’ interests in our company will be diluted and investors may suffer dilution in their net book value per share depending on the price at which such securities are sold. If we issue any such additional shares, such issuances also will cause a reduction in the proportionate ownership and voting power of all other shareholders. Further, any such issuance may result in a change in our control.

~~Our by-laws do not contain anti-takeover provisions, which could result in a change of our management and directors if there is a take-over of our company.~~

We do not currently have a shareholder rights plan or any anti-takeover provisions in our By-laws. Without any anti-takeover provisions, there is no deterrent for a take-over of our company, which may result in a change in our management and directors.

As a result of a majority of our directors and officers are residents of other countries other than the United States, investors may find it difficult to enforce, within the United States, any judgments obtained against our company or our directors and officers.

Other than our operations offices in Kelowna, British Columbia, we do not currently maintain a permanent place of business within the United States. In addition, a majority of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons’ assets are located outside the United States. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against our company or our officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof.

~~Trends, risks and uncertainties.~~

We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our common shares.

~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~

~~None.~~

~~Item 3. Defaults Upon Senior Securities~~

~~None.~~

~~Item 4. Submission of Matters to a Vote of Securities Holders~~

~~None.~~

~~Item 5. Other Information~~

Due to the implementation of British Columbia Instrument 51-509 on September 30, 2008 by the British Columbia Securities Commission, we have been deemed to be a British Columbia based reporting issuer. As such, we are required to file certain information and documents at~~www.sedar.com.~~

~~Item 6. Exhibits~~

~~Exhibit~~	~~Description~~
~~Number~~	Page 31 of 33

~~(2)~~Table of Contents

b) Exhibits

Exhibit Number	~~Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession~~	Description

~~2.1~~ (3)	~~Plan of Conversion (included as Schedule “A” to the proxy statement/prospectus)~~

(3)*	Articles of Incorporation and Bylaws
3.1
3.1*	Articles of Incorporation

3.2*	~~Bylaws~~

~~(4)~~	~~Instruments Defining the Rights of Security Holders, including Indentures~~

~~4.1~~	~~2014 Stock Option Plan~~

4.2*	~~Specimen ordinary share certificate~~

~~(5)~~	~~Opinion regarding Legality~~

~~5.1~~	~~Opinion of Macdonald Tuskey regarding the legality of the securities being registered~~

~~(8)~~	~~Opinions regarding Tax Matters~~

~~8.1~~	~~Opinion of Dale Matheson Carr-Hilton Labonte LLP regarding U.S. tax matters~~

~~8.2~~	~~Opinion of Dale Matheson Carr-Hilton Labonte LLP regarding Canadian tax matters~~

~~(10)~~	~~Material Contracts~~

~~10.1~~	~~Membership Purchase Agreement dated October 23, 2017 with Marian Washington and Michele Reillo~~ (incorporated by reference as ~~exhibit 10.1~~Exhibit 3.1 to our Registration Statement on Form S-1 filed June 3, 2020)
3.2		Bylaws (incorporated by reference as Exhibit 3.2 to our Registration Statement on Form S-1 filed June 3, 2020)
3.3		Amended and Restated Articles of Incorporation (Filed on Form 8-K January 14, 2021 Exh. 3.1)
3.4		Second Amended and Restated Bylaws (incorporated by reference as Exhibit 3.2 to our Current Report on Form 8-K filed ~~November 2, 2017)~~January 14, 2021)
3.5		Amended and Restated Bylaws (Filed on Form S-1 June 3, 2020 Exh 3.4)
3.6		Amendment to Articles of Incorporation – Share Consolidation (Filed on Form 8-K June 23, 2009 Exh 3.1)
3.7		Amendment to Articles of Incorporation – Share Expansion (incorporated by reference as Exhibit 3.5 to our Registration Statement on Form S-1 filed June 3, 2020)
3.8		Amendment to Articles of Incorporation –Share Forward Split (Filed on Form 8-K December 16th, 2015 Exh 3.1)
3.9		Amendment to Articles of Incorporation – Name Change (Filed on Form 8-K May 11th, 2016 Exh 99.1)

(10)		Material Contracts
10.1		Executive Employment Agreement dated Dec. 31, 2021 with John Docherty (Filed on Form 10-Q January 14, 2022 Exh 10.1)
10.2	~~Services Agreement dated August 15, 2017 with Adam Mogil~~

~~10.3~~	Management Services Agreement dated ~~June 19, 2017~~Dec. 31, 2021 with ~~Dr. Phil Ainslie~~C.A.B. Financial Services Ltd. (Chris Bunka) (Filed on Form 10-Q January 14, 2022 Exh. 10.2)

~~10.4~~	~~Management Services Agreement dated June 1, 2017 with M&E Services Ltd. (Spissinger)~~

~~10.5~~10.3	~~Marketing Agreement dated March 24, 2017 with Dig Media Inc~~.

~~10.6~~	~~Management Services Agreement dated March 1, 2017 with Docherty Management Ltd.~~

~~10.7~~	~~Collaborative Research Agreement dated February 6, 2017 with National Research Counsel~~

~~10.8~~	~~Services Agreement dated January 1, 2017 with Correlation Capital Inc.~~

~~10.9~~	~~Joint Venture Agreement dated April 6, 2017 with NeutriSci International Inc.~~

~~10.10~~	~~Management Services Agreement dated December 1, 2016 with CAB Financial Services ltd.~~

~~10.11~~	~~Private Label Agreement dated September 5, 2016 with Timeless Herbal Care Limited~~

~~10.12~~	Redacted Intellectual Property License Agreement dated ~~September 3, 2016 with Timeless Herbal Care Limited~~May 20, 2022 between Lexaria Hemp Corp. and Premier Wellness Science Co., Ltd.

(21)		Subsidiaries
~~10.13~~21.1		~~Private Placement Subscription Agreement dated July 5, 2016 (incorporated by reference as exhibit 10.1~~List of ~~our Current Report~~Subsidiaries of the Registrant (Filed on Form ~~8-K filed August 16, 2016)~~10-K November 29, 2021 Exh 21.1)

(31)		Rule 13(a) - 14 (a)/15(d) - 14(a)
~~10.14~~31.1	~~Loan agreement dated July 25, 2016 with CAB Financial Services Ltd. (incorporated by reference as exhibit 10.1 of our Current Report on Form 8-K filed July 26, 2016)~~

~~10.15~~	~~Form of subscription agreement for Private Placement closed on June 6, 2016 (incorporated by reference as exhibit 10.1 of our Current Report on Form 8-K filed June 8, 2016)~~

~~10.16~~	~~Form of warrant agreement dated June 6, 2016(incorporated by reference as exhibit 10.2 of our Current Report on Form 8-K filed June 8, 2016)~~

~~10.17~~	~~Form of Stock Option Agreement (incorporated by reference as exhibit 10.3 of our Current Report on Form 8-K filed June 8, 2016)~~

~~10.18~~	~~Consulting Agreement dated June 3, 2016 with Frontier Merchant Capital Group (incorporated by reference as exhibit 10.4 of our Current Report on Form 8-K filed June 8, 2016)~~

~~10.19~~	~~Licensing Agreement dated May 14, 2016 of Lexaria Bioscience Corp. (incorporated by reference as exhibit 10.1 of our Current Report on Form 8-K filed May 20, 2016)~~

~~10.20~~	~~License Agreement dated August 11, 2015 with PoViva Tea LLC (incorporated by reference to exhibit 10.1 of Current Report on Form 8-K filed August 12, 2015)~~

~~10.21~~	~~Share Purchase Agreement dated June 24, 2015 with Shaxon Enterprises Ltd. (incorporated by reference to exhibit 10.1 of Current Report on Form 8-K filed June 26, 2015)~~

~~10.22~~	~~Letter of Intent dated June 10, 2014 with Shaxon Enterprises (incorporated by reference to exhibit 10.1 of Current Report on Form 8-K filed June 12, 2015)~~

~~10.23~~	~~Operating Agreement dated November 11, 2014 with Poppy’s Teas LLC (incorporated by reference to exhibit 10.1 of our Current Report on Form 8-K filed November 12, 2014)~~

~~10.24~~	~~Joint Venture Agreement dated May 27, 2014 with Lexaria (incorporated by reference to exhibit 10.1 of our Current Report on Form 8-K filed May 29, 2014)~~

~~10.25~~	~~Joint Venture Agreement dated March 5, 2014 with Enertopia Corp. et al. (incorporated by reference to exhibit 10.1 of our Current Report on Form 8-K filed March 5, 2014)~~

~~(21)~~	~~Subsidiaries~~

~~21.1~~	~~Lexaria Canpharm Corp., a Canadian federal company~~

~~21.2~~	~~Poviva Tea LLC, a Nevada corporation~~

~~(23)~~	~~Consents of Experts and Counsel~~

~~23.1~~	~~Consent of Macdonald Tuskey (Included in Exhibit 5.1)~~

~~23.2~~	~~Consent of Dale Matheson Carr-Hilton Labonte LLP (Included in Exhibit 8.1 and Exhibit 8.2)~~

~~23.3~~	~~Consent of Davidson & Company LLP, Chartered Professional Accountants~~

~~23.4~~	~~Consent of MNP LLP, Chartered Accountants~~

~~31.1~~	~~Certification Pursuant to 18 U.S.C. ss 1350, as Adopted Pursuant to~~ Section 302 ~~of the~~Certifications under Sarbanes-Oxley Act of 2002 ~~(Chief~~of Principal Executive Officer)
31.2
~~31.1~~	~~Certification Pursuant to 18 U.S.C. ss 1350, as Adopted Pursuant to~~ Section 302 ~~of the~~Certifications under Sarbanes-Oxley Act of 2002 ~~(Chief~~of Principal Financial ~~Officer)~~Officer and Principal Accounting Officer
(32)		Section 1350 Certifications
32.1		Section 906 Certification under Sarbanes Oxley Act of 2002 of Principal Executive Officer
32.2		Section 906 Certification under Sarbanes Oxley Act of 2002 of Principal Financial Officer and Principal Accounting Officer

(101)*		Interactive Data Files
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

* Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.


~~32.1~~	~~Certification Pursuant to 18 U.S.C. ss 1350, as Adopted Pursuant to Section 906~~Page 32 of ~~the Sarbanes-Oxley Act of 2002 (Chief Executive Officer)~~33

~~32.1~~	~~Certification Pursuant to 18 U.S.C. ss 1350, as Adopted Pursuant to Section 906~~Table of ~~the Sarbanes-Oxley Act of 2002 (Chief Financial Officer)~~Contents

* Incorporated by reference to same exhibit filed

SIGNATURES

In accordance with ~~the Company's Registration Statement on Form SB-2 dated January 10, 2006.~~

~~SIGNATURES~~

~~Pursuant to the requirements of~~ Section 13 or 15(d) of the ~~Securities~~ Exchange Act, ~~of 1934,~~ the registrant ~~has duly~~ caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

LEXARIA BIOSCIENCE CORP.

By: /s/ Christopher Bunka

Christopher Bunka

Chief Executive Officer, Chairman and Director

(Principal Executive Officer)

Date: July 14, 2022

In accordance with the Exchange Act, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By: /s/ Christopher Bunka

Christopher Bunka

Chief Executive Officer, Chairman and Director

(Principal Executive Officer)

Date: July 14, 2022

By: /s/ John Docherty

John Docherty

President and Director

Date: July 14, 2022

By: /s/ Greg Downey

Greg Downey CPA, CMA

Chief Financial Officer

(Principal Financial and Accounting Officer)

Date: July 14, 2022

~~By:~~	~~/s/ " John Docherty "~~
	~~John Docherty,~~
	~~President and Director~~
	~~(Principal Executive Officer)~~
	~~January 12, 2018~~

	Page 33 of 33
~~By:~~	~~/s/ " Chris Bunka "~~
	~~Chris Bunka,~~
	~~Chief Executive Officer, Chairman and Director~~
	~~(Principal Executive Officer)~~
	~~January 12, 2018~~


~~By:~~	~~/s/ " Allan Spissinger "~~
	~~Allan Spissinger CPA, CA~~
	~~Chief Financial Officer~~
	~~(Principle Financial Officer)~~
	~~January 12, 2018~~

		November 30			August 31
		2017			2017
		(Unaudited)
ASSETS
Current
Cash	$	2,209,703		$	2,533,337
Accounts and other receivables (Note 7)		71,923			45,293
Inventory (Note 8)		77,436			67,174
Prepaid expenses and deposit		58,140			149,691
Total Current Assets		2,417,202			2,795,495
Patents (Note 9)		78,321			62,827
Equipment		1,702			1,856
		80,023			64,683
TOTAL ASSETS	$	2,497,225		$	2,860,178

LIABILITIES
Current
Accounts payable and accrued liabilities	$	59,854		$	32,574
Unearned revenue (Note 10)		10,833			17,083
Due to related parties (Note 14)		25,018			42,690
Total Current Liabilities		95,705			92,347
TOTAL LIABILITIES		95,705			92,347

STOCKHOLDERS' EQUITY
Share Capital
Authorized: 220,000,000 common voting shares with a par value of $0.001 per share Issued and outstanding: 69,435,198 common shares at November 30, 2017 �� and 67,975,761 common shares at August 31, 2017		69,435			67,976
Additional paid-in capital		16,080,737			16,108,270
Deficit		(13,748,652	)		(13,169,939	)
Equity attributable to shareholders of the Company		2,401,520			3,006,307
Non-Controlling Interest		-			(238,476	)
Total Stockholders' Equity		2,401,520			2,767,831
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,497,225		$	2,860,178

	THREE MONTHS ENDED
	November 30		November 30
	2017		2016
Revenue (Note 13)	24,635		9,225
Cost of Goods Sold	(6,099	)	(888	)
Gross profit	18,536		8,337

Expenses
Accounting and audit	17,691		6,099
Depreciation and Amortization (Note 9)	375		372
Insurance	4,645		5,180
Advertising and promotions	188,999		11,928
Bank charges and exchange loss	5,691		75
Consulting (Note 16)	142,166		296,267
Interest expense	-		1,355
Investor relations	188		23,717
Legal and professional	59,903		9,996
Office and miscellaneous	35,820		23,376
Research and development	110,392		7,261
Travel	27,833		19,840
Inventory write-off (Note 8)	3,546		3,424
	597,249		408,890
Net loss and comprehensive loss for the period	(578,713	)	(400,553	)
Net loss and comprehensive loss attributable to:
Common shareholders	(578,713	)	(395,445	)
Non-controlling interest(Note 9)	-		(5,108	)
Basic and diluted loss per share	(0.01	)	(0.01	)
Weighted average number of common sharesoutstanding
- Basic and diluted	68,635,596		51,690,855

	COMMON STOCK

			ADDITIONAL						TOTAL
			PAID-IN						STOCKHOLDERS’
	SHARES	AMOUNT	CAPITAL		DEFICIT		NCI		EQUITY
		$	$		$		$		$
Balance, August 31, 2016	51,288,477	51,288	11,515,419		(11,300,662	)	(178,288	)	87,757
Shares issued for services	939,354	938	223,722		-		-		224,660
Non-controlling Interest	-	-	-		-		(60,188	)	(60,188	)
Stock based compensation (Note 12)	-	-	93,968		-		-		93,968
Private placement of shares, net of issuance cost	4,104,280	4,105	1,537,637		-		-		1,541,742
Warrants issued for services	-	-	292,750		-		-		292,750
Exercise of stock options	1,014,125	1,015	176,247		-		-		177,262
Exercise of warrants	10,322,025	10,322	2,222,710		-		-		2,233,032
Conversion of debt	307,500	308	45,817		-		-		46,125
Net loss and comprehensive loss	-	-	-		(1,869,277	)	-		(1,869,277	)
Balance August 31, 2017	67,975,761	67,976	16,108,270		(13,169,939	)	(238,476	)	2,767,831
Non-controlling Interest (Note 9)	-	-	(308,476	)	-		238,476		(70,000	)
Exercise of stock options	55,000	55	12,446		-		-		12,501
Exercise of warrants	1,404,437	1,404	268,497		-		-		269,901
Net loss and comprehensive loss	-	-	-		(578,713	)	-		(578,713	)

Balance, November 30, 2017 (Unaudited)	69,435,198	69,435	16,080,737		(13,748,652	)	-		2,401,520

			Weighted Average
	Number of		Exercise Price
	Warrants		$
Balance, August 31, 2016	12,136,241		0.18
Cancelled/Expired	(1,004,150	)	0.22
Exercised	(10,322,025	)	0.23
Issued	8,034,440		0.36
Balance, August 31, 2017	8,844,506		0.29
Exercised	(1,404,437	)	0.19
Issued	21,031		0.60
Balance, November 30, 2017	7,461,100		0.30

# of Warrants	Weighted	Weighted
	Average	Average
	Remaining	Exercise Price
	Contractual Life	$
180,400	0.03 years	0.27
450,000	0.70 years	0.14
500,000	0.70 years	0.44
2,650,666	0.75 years	0.14
500,000	1.11 years	0.23
1,984,796	1.34 years	0.60
245,238	1.34 years	0.42
200,000	1.55 years	0.29
750,000	3.86 years	0.14
7,461,100	1.26 years	0.30

			Weighted
	Options		Average Exercise
	Outstanding		Price
			$
Balance, August 31, 2016	3,485,000		0.15
Exercised	(1,014,125	)	0.17
Granted	850,000		0.14
Balance, August 31, 2017	3,320,875		0.15
Exercised	(55,000	)	0.23
Balance, November 30, 2017	3,265,875		0.15

Number of Stock	Number of Stock	Weighted	Weighted	Aggregate
Options	Options	Average	Average	Intrinsic Value
	Exercisable	Remaining	Exercise Price
		Contractual Life	$	$
247,500	247,500	0.55 years	0.09	231,188
193,375	193,375	1.65 years	0.23	154,261
990,000	990,000	2.06 years	0.10	915,750
275,000	275,000	2.18 years	0.09	256,875
550,000	550,000	2.32 years	0.09	513,750
110,000	110,000	2.80 years	0.17	93,750
300,000	300,000	3.38 years	0.11	274,500
200,000	200,000	4.51 years	0.37	131,000
400,000	100,000	4.56 years	0.29	292,000
3,265,875	2,965,875	2.58 years	0.15	2,863,073

	IP Licensing	Consumer Products	Corporate	Consolidated Total
External Revenue	16,250	8,385	-	24,635
CoGS	-	(6,099)	-	(6,099)
Operating Expenses	(59,581)	(45,556)	(492,112)	(597,249)
Segment Loss	(43,331)	(43,270)	(492,112)	(578,713)
Total Assets	78,321	79,138	2,339,766	2,497,225

	Three Months		Three Months		Change
	Ended		Ended		Between the
	November 30		November 30		Periods
	2017		2016
	$		$		$
Sales	24,635		9,225		15,410
Cost of Goods Sold	6,099		888		5,211
General and Administrative	593,703		405,466		188,237
Impairment of Inventory	3,546		3,424		122
Net loss	(578,713	)	(400,553	)	(178,160	)

	November 30	August 31
*Working Capital*	2017	2017
	$	$
Current assets	2,417,202	2,795,495
Current liabilities	95,705	92,347
Working capital balance (deficiency)	2,321,497	2,703,148

	Nine Months Ended
	May 31,
Cash Flows	2022			2021
	$			$
Cash flows (used in) provided by operating activities		(3,702,724	)		(2,877,489	)
Cash flows (used in) provided by investing activities		(130,595	)		193,882
Cash flows (used in) provided by financing activities		(33,395	)		9,415,370
Net cash flows (used in) discontinued operations		-			83,000
Increase (decrease) in cash		(3,866,714	)		6,814,763