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Nature of Business | 9 Months Ended
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May 31, 2023
Nature of Business |
Nature of Business | 1. Nature of Business Lexaria Bioscience Corp. (“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 (“API”) using DehydraTECHTM, our patented proprietary drug delivery technology. We are primarily a research and development company relying on our expanding intellectual property portfolio that continues to investigate the benefits of using DehydraTECH with numerous molecules. We have also begun an investigational new drug (“IND”) registration process with the US Food and Drug Administration (“FDA”). Revenues are generated primarily from intellectual property (“IP”) licensing contracts for DehydraTECH based on the terms of use and defined geographic and licensing arrangements. We also derive income from our third party contracted manufacturing of Business-to-Business (“B2B”) DehydraTECH enhanced ingredients which are processed to corporate customer specifications and sold by them online and in stores in the US. We also perform contract services in R&D for customer specific formulations that are used in comparison testing to customers’ existing products. Going Concern Consideration 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 its operational, research and development and capital expenditures for a period of at least 12 months from the date this Report. Since inception, the Company has incurred significant operating and net losses. Annual losses attributable to shareholders were $7.4 million (2022), $4.2 million (2021) and $4.1 million (2020). As of May 31, 2023, we had an accumulated deficit of $44.5 million. 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 corporate expenditures, additional revenues received from the licensing of our technology, if any, and the receipt of payments under any current or future collaborations we may enter into. The recurring losses and negative cash flows from operations raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not contain any adjustments that might result for this uncertainty. The Company entered into a sales agreement with Maxim Group LLC, (“Maxim”) on August 12, 2022, where we may offer and sell shares of our common stock with an aggregate offering price of up to $5,925,000 under an At-The-Market (“ATM”) Offering. This agreement provides that Maxim will be entitled to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the ATM. Based on the current equity value of the Company’s shares, the Company’s revised ability to use the ATM is limited to $1,965,533. Pursuant to the terms of the Company’s May 11, 2023, financing described below, the Company’s ability to use its ATM is currently on hold. We may also offer securities for sale during our fiscal year 2023 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. On May 8, 2023, the Company announced the pricing of its public offering of 2,106,000 units, with each unit consisting of one share of common stock and one unlisted warrant to purchase one share of common stock. Each unit was sold at a public offering price of $0.95. The warrants were immediately exercisable at a price of $0.95 per share on the date of issuance, being May 11, 2023, and will expire five years from the date of issuance. The shares of common stock and accompanying warrants were purchased together in this offering but were immediately separable upon issuance. Gross proceeds, before deducting placement agent fees to Maxim Group LLC, the sole placement agent, and other offering expenses, were approximately $2.0 million. The securities described above are registered pursuant to a registration statement on Form S-1, as amended (File No. 333-271096), which was declared effective by the Securities and Exchange Commission (the “SEC”) on May 8, 2023. Based on our existing working capital, management believes the Company has sufficient working capital to satisfy the Company’s estimated liquidity needs for the next 12 months. In making this assessment, the Company believes that this alleviates the substantial doubt in connection with the Company’s ability to continue as a going concern. However, there is no assurance that management’s plans will be successful. If the Company is unable to obtain funding, the Company would be forced to delay, reduce or eliminate some or all of its research and development programs, preclinical and clinical testing or commercialization efforts, which could adversely affect its business prospects.

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- Definition The entire disclosure for the nature of an entity's business, major products or services, principal markets including location, and the relative importance of its operations in each business and the basis for the determination, including but not limited to, assets, revenues, or earnings. For an entity that has not commenced principal operations, disclosures about the risks and uncertainties related to the activities in which the entity is currently engaged and an understanding of what those activities are being directed toward. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 275 -Publisher FASB -URI https://asc.fasb.org//275/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -SubTopic 10 -Topic 275 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482861/275-10-50-1 + Details
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