10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

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

For the quarterly period ended November 30, 2020

or

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

For the transition period from [  ] to [  ]

Commission file number

LEXARIA BIOSCIENCE CORP.

(Exact name of registrant as specified in its charter)

Nevada	20-2000871
State or other jurisdiction of incorporation or organization	(I.R.S. Employer Identification No.)
#100 – 740 McCurdy Road, Kelowna BC Canada	V1X 2P7
(Address of principal executive offices)	(Zip Code)

Registrant’s Telephone number, including area code: 250-765-6424

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

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

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

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

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

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

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

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

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

5,104,332 common shares as of January 14, 2021                                        

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	18
Item 4.	Controls and Procedures	27
PART II—OTHER INFORMATION		29
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 6.	Exhibits, Financial Statement Schedules	30

Page 2 of 31

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

LEXARIA BIOSCIENCE CORP.

CONSOLIDATED BALANCE SHEET

(Expressed in U.S. Dollars)

	November 30			August 31
	2020			2020
ASSETS	(Unaudited)			(Audited)
Current
Cash and cash equivalents	$	525,341		$	1,293,749
Marketable securities (Note 20)		43,731			19,321
Accounts receivable (Note 7)		427,330			208,925
Inventory (Note 8)		125,963			116,871
Prepaid expenses and deposit (Note 18)		136,016			182,095
Current assets from discontinued operations (Note 21)		49,333			105,250
Total Current Assets		1,307,714			1,926,211
Non-current assets, net
Lease right of use		118,193			126,920
Intellectual Property (Note 9)		296,058			292,000
Property & equipment (Note 10)		452,355			483,357
Total Non-current Assets		866,606			902,277
TOTAL ASSETS	$	2,174,320		$	2,828,488
LIABILITIES
Current
Accounts payable and accrued liabilities (Note 11)	$	83,095		$	86,920
Deferred revenue		35,500			44,255
Due to a related party (Note 15)		87,185			58,704
Lease current (Note 17)		36,695			36,038
Current liabilities from discontinued operations (Note 21)		-			250
Total Current Liabilities		242,475			226,167
Long Term
Lease long term (Note 17)		79,969			89,393
Loan payable (Note 19)		30,852			30,670
Total Long Term Liabilities		110,821			120,063
TOTAL LIABILITIES		353,296			346,230
STOCKHOLDERS' EQUITY
Share Capital
Authorized:
220,000,000 common voting shares with a par value of $0.001 per share
Issued and outstanding: 3,001,476 common shares at November 30, 2020
and 3,001,476 common shares at August 31, 2020		3,001			3,001
Additional paid-in capital		30,373,285			30,324,398
Deficit		(28,498,226	)		(27,802,198	)
Equity attributable to shareholders of the Company		1,878,060			2,525,201
Non-Controlling Interest		(57,036	)		(42,943	)
Total Stockholders' Equity		1,821,024			2,482,258
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,174,320		$	2,828,488

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

 

Page 3 of 31

LEXARIA BIOSCIENCE CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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

	THREE MONTHS ENDED
	November 30			November 30
	2020			2019
	(Unaudited)			(Unaudited)
Revenue (Note 14)	$	295,656		$	10,332
Cost of goods sold		64,478			7,853
Gross profit		231,178			2,479
Expenses
Accounting and audit		15,628			19,036
Depreciation and amortization (Note 9, 10)		27,929			27,512
Advertising and promotions		27,906			45,861
Bad debt		12,000			-
Consulting (Notes 13, 15, 17)		256,014			483,796
Investor relations		33,964			17,515
Legal and professional		248,695			52,355
Office and miscellaneous		76,517			74,027
Research and development		192,261			107,463
Travel		532			21,853
Wages & salaries		75,498			87,593
Unrealized (gain) loss on marketable securities (Note 19)		(24,410	)		41,574
Inventory writeoff (Note 8)		1,765			-
		944,299			978,585
Net loss from continuing operations		(713,121	)		(976,106	)
Discontinued operations
Income from discontinued operations (Note 21)		3,000			51,344
Net (loss) and comprehensive loss for the year	$	(710,121	)	$	(924,762	)
Net (loss) and comprehensive loss attributable to:
Common shareholders	$	(696,028	)	$	(907,312	)
Non-controlling interest	$	(14,093	)	$	(17,450	)
Basic and diluted (loss) per share
Continuing operations	$	(0.24	)	$	(0.35	)
Discontinued operations		0.00			0.02
	$	(0.24	)	$	(0.33	)
Weighted average number of common shares outstanding
- Basic and diluted		3,001,476			2,636,578

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

 

Page 4 of 31

LEXARIA BIOSCIENCE CORP.

CONSOLIDATED STATEMENT OF CASH FLOWS

(Expressed in U.S. Dollars)

	THREE MONTHS ENDED
	November 30			November 30
	2020			2019
	(Unaudited)			(Unaudited)
Cash flows used in operating activities
Net loss and comprehensive loss	$	(710,121	)	$	(924,763	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation		48,887			162,414
Depreciation and amortization (Note 8, 9, 10)		27,929			27,512
Inventory write-off (Note 8)		1,765			-
Bad debt expense		12,000			-
Noncash right of use lease expense		8,727			-
Unrealized loss on marketable securities		(24,410	)		41,574
Unrealized foreign exchange		182			-
Warrants issued for services		-			70,752
Change in working capital
Accounts receivable		(230,405	)		155,010
Inventory		(6,067	)		(6,160	)
Prepaid expenses and deposits		46,079			(27,140	)
Accounts payable and accrued liabilities		(3,825	)		(43,382	)
Due to related parties		28,481			(10,896	)
Operating lease liability		(8,767	)		-
Deferred revenue		(8,755	)		-
Net cash used in operating activities	$	(818,300	)	$	(555,079	)
Cash flows used in investing activities
Intellectual property		(5,775	)		(5,710	)
Property & equipment		-			-
Net cash used in investing activities	$	(5,775	)	$	(5,710	)
Cash flows from financing activities
Proceeds from issuance of equity		-			706,704
Net cash from financing Activities	$	-		$	706,704
Net cash from discontinued operations	$	55,667		$	(97,742	)
Net Change in cash and cash equivalents for the period		(768,408	)		48,174
Cash and cash equivalents at beginning of period		1,293,749			1,285,147
Cash and cash equivalents at end of period	$	525,341		$	1,333,321
Supplemental information of cash flows:
Income taxes paid in cash	$	3,540		$	957
Subscription Receivable	$	-		$	110,025

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

 

Page 5 of 31

LEXARIA BIOSCIENCE CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Expressed in U.S. Dollars)

					ADDITIONAL
	COMMON STOCK				PAID-IN									TOTAL
	SHARES		AMOUNT		CAPITAL			DEFICIT			NCI			STOCKHOLDERS'
			$		$			$			$			EQUITY
Balance August 31, 2019		2,626,236		2,626		26,248,614			(23,868,202	)		107,674			2,490,712
Stock based compensation		-		-		162,414			-			-			162,414
Warrants issued for services		-		-		70,752			-			-			70,752
Private placement		60,792		61		815,959									816,020
Net loss		-		-		-			(907,313	)		-			(907,313	)
Non-controlling interest		-		-		-			-			(17,450	)		(17,450	)
Balance November 30, 2019		2,687,028		2,687		27,297,739			(24,775,515	)		90,224			2,615,135
Stock based compensation		-		-		294,293			-			-			294,293
Exercise of stock options		3,667		4		10,996			-			-			11,000
Net loss		-		-		-			(950,344	)		-			(950,344	)
Non-controlling interest		-		-		-			-			(47,148	)		(47,148	)
Balance February 29, 2020		2,690,695		2,691		27,603,028			(25,725,859	)		43,076			1,922,936
Stock based compensation		-		-		682,563			-			-			682,563
Warrants issued for services		-		-		98,081			-			-			98,081
Private placement		295,540		296		1,887,310			-			-			1,887,606
Net loss		-		-		-			(1,361,381	)		-			(1,361,381	)
Non-controlling interest		-		-		-			-			(29,272	)		(29,272	)
Balance May 31, 2020		2,986,235		2,986		30,270,983			(27,087,240	)		13,804			3,200,533
Exercise of stock options		3,667		4		19,026			-			-			19,030
Shares issued for service		11,574		12		99,988			-			-			1,00,000
Private placement		-		-		(65,600	)		-			-			(65,600	)
Net loss		-		-		-			(714,958	)		-			(714,958	)
Non-controlling interest		-		-		-			-			(56,747	)		(56,747	)
Balance August 31, 2020		3,001,476		3,001		30,324,398			(27,802,198	)		(42,943	)		2,482,258
Stock based compensation		-		-		48,887			-			-			48,887
Warrants issued for services		-		-		-			-			-			-
Private placement		-		-		-			-			-			-
Net loss		-		-		-			(696,028	)		-			(696,028	)
Non-controlling interest		-		-		-			-			(14,093	)		(14,093	)
Balance November 30, 2020		3,001,476		3,001		30,373,285			(28,498,226	)		(57,036	)		1,821,024

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

 

Page 6 of 31

LEXARIA BIOSCIENCE CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

November 30, 2020

(Expressed in U.S. Dollars)

1. Organization, Business and Going Concern 

Lexaria Bioscience Corp. (“Lexaria”, or the “Company”) was formed on December 9, 2004 under the laws of the State of Nevada. In March of 2014, the Company began work in the fields of enhanced delivery of active ingredients and drugs. In May 2016, the Company commenced out-licensing its patented DehydraTECH™ technology (the “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.

The Company’s unaudited interim consolidated financial statements 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 (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.

These unaudited interim consolidated financial statements should be read in 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, 2020.

The Company’s unaudited interim consolidated financial statements have been prepared in accordance with US GAAP 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 recurring losses from operations and net capital deficiency raise substantial doubt about the Company’s ability to continue as a going concern.

The Company requires additional funds or revenues 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.

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak and any related adverse public health developments may adversely affect workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or results of operations at this time.

During November of 2020, our Board of Directors ("Board") approved a plan to sell the businesses assets underlying our Canpharm THC related segment. As a result, the related financial results were reflected in our consolidated statement of income, retrospectively, as discontinued operations beginning in the first quarter of fiscal 2021. On November 18, 2020, we signed a definitive agreement to sell the assets. As at November 30, 2020, the transaction was pending final approval from the TSX Venture Exchange. As a result, the related assets and liabilities associated with the discontinued operations in the prior year consolidated balance sheet are classified as discontinued operations. See "Note 21 - Discontinued Operations" for additional information.

Page 7 of 31

Subsequent to November 30, 2020, the Company approved a 1:30 reverse stock split with no fractional shares issued.  All share and per share information within these condensed interim consolidated financial statements have been retroactively restated to reflect the effects of the approved reversed stock split.

2. Business Risk and Liquidity

The Company is subject to several categories of risk associated with its operating activities. 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 continue 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. Lexaria does have an ancillary involvement risk via out-licensing of its patented technology to licensees that choose to utilize DehydraTECH 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.

Lexaria and its subsidiaries are not involved directly or indirectly in the production or sale of any products containing nicotine. Products containing nicotine have historically been involved in litigation in the USA. Lexaria’s corporate licensee may introduce products containing nicotine that utilize DehydraTECH to the US consumer market, which could therefore introduce third-party risks to Lexaria.

Lexaria and its subsidiaries are not involved directly or indirectly in the production or sale of any pharmaceutical or antiviral products. Licensees may enhance their product’s delivery using our Technology, which could therefore introduce third-party risks to Lexaria.

3. 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, 2020.

4. Basis of Consolidation

These interim consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries; Lexaria CanPharm ULC, PoViva Corp., Lexaria Hemp Corp., Kelowna Management Services Corp. and Lexaria Pharmaceutical Corp., and our 83.333% 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.

Page 8 of 31

5. Estimates and Judgments

The preparation of financial statements in conformity with U.S 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. We believe that these estimates are reasonable; however, actual results could 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 audited consolidated financial statements for the year ended August 31, 2020.

6. Recent Accounting Guidance

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 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. In November 2019 FASB issued ASU No 201910 revised the effective date based on updated criteria with the effective date for fiscal years beginning after December 15, 2022. 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
	2020		2020
	$		$
Trade and deposits receivable		3,792		82,492
Intellectual Property Fees		325,304		38,250
Sales tax receivable		98,234		88,183
		427,330		208,925

Page 9 of 31

8. Inventory 

	November 30		August 31
	2020		2020
	$		$
Raw materials		53,676		51,404
Work in progress		11,557		15,705
Finished goods		60,730		49,762
		125,963		116,871

During the period ended November 30, 2020, the Company wrote down $1,765 (2020 - $8,240 full year) of inventory to reflect its net realisable value.

9. Intellectual Property 

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

Issued Patent #	Patent Issuance 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

The Company also holds non-capitalized patents outside the US. A continuity schedule for capitalized patents is presented below:

	November 30			August 31
	2020			2020
	$			$
Balance – beginning		292,000			265,127
Addition		5,775			33,645
Amortization*		(1,717	)		(6,772	)
Balance – ending		296,058			292,000

*The patents are amortized over their legal life of 20 years.

Page 10 of 31

10. Property & Equipment

	Cost		Period Amortization			Disposal			Accumulated Amortization			Net Balance November 30, 2020
Quarter Ended November 30, 2020	$		$			$			$			$
Leasehold improvements		259,981		(13,509	)		-			(100,120	)		159,861
Computers		63,964		(4,920	)		-			(36,789	)		27,175
Furniture fixtures equipment		34,220		(1,604	)		(3,094	)		(11,608	)		19,518
Lab equipment		291,235		(10,967	)		-			(45,434	)		245,801
		649,400		(31,001	)		(3,094	)		(193,951	)		452,355

	Cost		Period Amortization			Accumulated Amortization			Net Balance August 31, 2020
Year Ended August 31, 2020	$		$			$			$
Leasehold improvements		259,981		(53,268	)		(86,610	)		173,371
Computers		63,964		(19,681	)		(31,869	)		32,095
Furniture fixtures equipment		34,220		(7,036	)		(13,097	)		21,123
Lab equipment		291,235		(27,921	)		(34,467	)		256,768
		649,400		(107,906	)		(166,043	)		483,357

During the three month period ended November 30, 2020, $4,790 of amortization was included in the cost of inventory.

11. Accounts Payable and Accrued Liabilities

	November 30		August 31
	2020		2020
	$		$
Accounts Payable
Trades payable		12,659		45,080
Accrued Liabilities
Corporate tax payable		1,785		3,834
Trades payable		68,651		38,006
Balance – ending		83,095		86,920

12. Common Shares and Warrants

During the quarter ended November 30, 2020 the Company did not issue any shares or warrants.

A continuity schedule for warrants is presented below:

	Number of Warrants			Weighted Average Exercise Price $
Balance August 31, 2019		94,177			41.40
Cancelled/expired		(25,000	)		44.90
Issued		402,431			12.74
Balance August 31, 2020		471,608			16.77
Cancelled/expired		(32,510	)		67.50
Balance November 30, 2020		439,098			14.68

Page 11 of 31

A summary of warrants outstanding as of November 30, 2020 is presented below:

# of Warrants		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price $
	3,333	0.47 years		28.80
	8,333	0.48 years		46.50
	25,000	0.86 years		4.20
	291	0.95 years		36.00
	7,500	1.93 years		24.00
	51,808	3.96 years		36.00
	8,983	4.00 years		36.00
	16,666	4.29 years		9.00
	267,616	4.43 years		10.50
	49,568	4.45 years		10.50
	439,098	4.01 years		14.68

13. Stock Options 

The Company has established the 2014 Stock Option Plan whereby the board of directors may, from time to time, grant up to 62,917 stock options to directors, officers, employees, and consultants; and the 2019 Equity Incentive Plan whereby the board of directors may, from time to time, grant up to 261,290 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.

The Company did not grant options during the quarter ended November 30, 2020.

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, 2019		166,767			21.30
Cancelled/expired		(149,437	)		29.51
Exercised		(7,333	)		4.09
Granted		161,600			11.66
Balance August 31, 2020		171,596			11.17
Cancelled		(1,333	)		12.90
Balance November 30, 2020 (Outstanding)		170,263			11.16		4.05		30,000
Balance November 30, 2020 (Exercisable)		146,231			10.51		4.05		30,000

Page 12 of 31

14. Revenues 

	November 30  2020 $		November 30  2019 $
Product sales		164,990		10,015
Licensing revenue		130,584		-
Freight revenue		82		317
Income from ongoing operations		295,656		10,332
Income from discontinued operations		3,000		51,750
		298,656		62,082

During the three months ended November 30, 2020, the Company recognized $3,138 of Intellectual Property Licensing fees and $127,446 of usage fees from ongoing operations and $3,000 of income from discontinued operations (November 2019 - $33,750 licensing and $18,000 usage fees all relating to discontinued operations). Revenues are significantly concentrated on one customer.

There was an increase in our intermediate product sales and licensing revenues in the current year compared to the prior year, which began in the second quarter of fiscal 2020, with increasing volume to customers. Intermediate products are typically a DehydraTECH enabled powder that companies can purchase to include in their products. Intermediate product sales and licensing revenue constituted the majority of our revenue. The licensing fees consist of intellectual property licensing fees for transfer of the Technology with the signing of definitive agreements for the DehydraTECH technology and usage fees.

15. Related Party Transactions 

					November 30						November 30
					2020						2019
	Contract		Non Cash		Total		Contract		Non Cash		Total
Management, consulting and director services	$		$		$		$		$		$
CAB Financial Services(1)		67,537		-		67,537		65,757		-		65,757
M&E Services Ltd.(1)		31,822		-		31,822		29,382		-		29,382
Docherty Management Limited(1)		52,579		-		52,579		56,730		-		56,730
Directors		17,076		-		17,076		16,717		-		16,717
		169,014		-		169,014		168,586		-		168,586

⁽¹⁾C.A.B. Financial Services is owned by the CEO of the Company, M&E Services Ltd. is owned by the CFO of the Company, and Docherty Management Limited is owned by the President of the Company.

All related party transactions pertain to management and director agreements entered into in the normal course of business (Note 17).

Due to related parties:

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

As at November 30, 2020, $87,185 (August 31, 2020 - $58,704) was payable to related parties and included in due to related parties.

Page 13 of 31

16. 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. Licensing revenues are significantly concentrated on one licensee.

	IP Licensing $			Products $			Corporate $			Consolidated Total $
External revenue		130,584			165,072			-			295,656
CoGS		-			(64,478	)		-			(64,478	)
Operating expenses		(127,868	)		(92,038	)		(724,393	)		(944,299	)
Discontinued operations		3,000			-			-			3,000
Segment income(loss)		5,716			8,556			(724,393	)		(710,121	)
Total assets		817,830			125,963			1,230,527			2,174,320

Capital Asset by Region	Cost US		Disposal US			Net Balance US		Cost Canada		Net Balance Canada		Total Net Balance
Three Months Ended November 30, 2020	$		$			$		$		$		$
Leasehold Improvements		-		-			-		259,981		159,861		159,861
Computers		-		-			-		63,964		27,175		27,175
Furniture Fixtures Equipment		3,094		(3,094	)		-		31,126		19,518		19,518
Lab Equipment		98,050		-			79,128		193,185		166,673		245,801
		101,144		(3,094	)		79,128		548,256		373,227		452,355

Capital Asset by Region	Cost US		Net Balance US		Cost Canada		Net Balance Canada		Total Net Balance
Year Ended August 31, 2020	$		$		$		$		$
Leasehold Improvements		-		-		259,981		173,371		173,371
Computers		-		-		63,964		32,095		32,095
Furniture Fixtures Equipment		3,094		-		31,126		21,123		21,123
Lab Equipment		98,050		85,263		193,185		171,505		256,768
		101,144		85,263		548,256		398,094		483,357

17. Commitments, Significant Contracts and Contingencies Management and Service Agreements: 

As at November 30, 2020, the Company is party to the following contractual commitments:

Party	Monthly Commitment	Expiry Date
C.A.B Financial Services	CAD $29,706	January 1, 2022
Docherty Management Ltd.	CAD $25,609	January 1, 2022
M&E Services Ltd.	CAD $13,997	June 1, 2021
Corporate Development	CAD $1,500	Month to Month
Office Management	CAD $10,800	August 15, 2022
Research & Development	CAD $3,854	Month to Month
Office operating lease(1)	CAD $4,823	November 15, 2023

Page 14 of 31

Right of Use Assets - Operating Lease

(1) Corporate office and R&D lab space leased in Kelowna, British Columbia, Canada until November 15, 2023 with an option to extend an additional five years. In addition to minimum lease payments, the lease requires us to pay property taxes and operating costs which are subject to annual adjustments.

Right of use assets - operating leases:	$
November 30, 2020		126,920
Amortization		(8,727	)
Total right of use assets		118,193
Liabilities:
November 30, 2020		125,431
Lease payments		(10,987	)
Interest accretion		2,220
Total lease liabilities		116,664
Operating lease cost as at November 30, 2020	$	118,193
Operating cash flows for lease		10,948
Remaining lease term	2.8 Years
Discount rate		7.25	%

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 November 30, 2020:

2021	32,746
2022	44,815
2023	44,815
2024	7,469
Thereafter	-
Total lease payments	129,845
Less: imputed interest	(13,181	)
Present value of operating lease liabilities	116,664
Less: current obligations under leases	(36,695	)
Total	79,969

Page 15 of 31

18. Prepaid Expenses 

Prepaid expenses consist of the following at November 30, 2020 and August 31, 2020:

	November 30		August 31
	2020		2020
	$		$
Advertising & conferences		21,539		21,878
Legal fees		130		47,498
Licence, filing fees, dues		30,138		8,541
Office & insurance		58,823		78,792
Research & development		25,386		25,386
		136,016		182,095

19. Loan Payable 

We have applied for, and received, governmental assistance related to the COVID-19 pandemic. As of November 30, 2020 there is one Canadian governmental programs that currently provides:

A Canadian dollar loan of C$40,000 under the Canada Emergency Business Account (CEBA) program. The loan is a 0% interest bearing loan with no principle payments and if repaid before December 31, 2022 will result in a loan forgiveness of 25% (up to C$10,000). The loan can be converted into a 3-year term loan at 5% annual interest paid monthly effective January 1, 2023.

20. Marketable Securities 

The components of Marketable Securities were as follows:

	Cost Basis $		Unrealized Gains $		Unrealized Losses $			Total $
August 31, 2020
Common stock		56,250		9,997		(38,584	)
Total		56,250		9,997		(46,926	)		19,321
November 30, 2020
Common stock		56,250		24,410		-
Total		56,250		34,407		(46,926	)		43,731

Unrealized losses from common stock are due to market price movements. Management does not believe any remaining unrealized losses represent other-than-temporary impairments based on our evaluation of available evidence. The COVID-19 pandemic has caused significant market turbulence and it is possible that our evaluation will change dependant upon new information as it arises.

Page 16 of 31

21. Discontinued Operations 

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

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:

	THREE MONTHS ENDED
	November 30		November 30
	2020		2019
Revenue	$	3,000	$	51,750
Operating Expenses		-		406
Net Income	$	3,000	$	51,344

The following table presents cash flows of discontinued operations:

	THREE MONTHS ENDED
	November 30		November 30
	2020		2019
Cash flows used in discontinued operating activities
Net income	$	3,000	$	51,344
Change in working capital		55,667		(97,742	)
Net cash used in discontinued operating activities	$	58,667	$	(46,398	)
Net cash provided by (used in) discontinued operations		58,667		(46,398	)

The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations of the assets:

	November 30		August 31
	2020		2020
Current Assets
Accounts receivable	$	49,333	$	105,250
Total assets classified as discontinued operations in the consolidated balance sheet		49,333		105,250
Current Liabilities
Accounts payable	$	-	$	250
Total liabilities classified as discontinued operations in the consolidated balance sheet		-		250

22. Subsequent Events 

1.	On December 9, 2020, the Company announced that it closed the sale of its non-pharmaceutical THC-related assets held within Lexaria Canpharm ULC to Hill Street Beverage Company Inc. Lexaria received C$350,000 in cash, 6,031,363 restricted common shares of Hill Street at a deemed price of C$0.0829 per share, a C$2,000,000 promissory note bearing interest at the rate of 10% per annum, and a limited license to use the DehydraTECH technology outside of Canada and the US for use with certain products that contain 0.3% or greater THC and which are not classified by a national regulator as drug, pharmaceutical or biopharmaceutical product. Pursuant to the terms of the transaction, Lexaria will receive another C$1,000,000 worth of common shares of Hill Street over a period sixteen months in C$500,000 issuances eight months and sixteen months after the closing date.
2.	On January 11, 2021, at 4:30 p.m. Eastern time, the Company performed a 1:30 reverse stock split with no fractional shares issued. The issued and outstanding balance of shares at that time changed from 90,044,312 to 3,001,476 as per shareholder approval at the annual general meeting of the company held June 23, 2020. Concurrently, the Company began listing its common shares on the NASDAQ exchange under the symbol LEXX.
3.	On January 14, 2021, the Company closed an underwritten public offering for $11,039,994, issuing 2,102,856 units consisting of one common share and one warrant for $5.25. Total fees of $1,410,506 were estimated at time of closing. The warrants issued will trade under the symbol LEXXW.

Page 17 of 31

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, forward-looking statements are identified by terminology such as "may", “will”, "should", “could”, “targets”, “goal”, "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "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" set forth in Item 1(A) in our annual report on Form 10-K, as filed with the Securities and Exchange Commission on October 14, 2020, that may cause our or our 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. We caution you not to place undue reliance on any forward-looking statements as they speak only as of the date on which such statements were made, and we 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.

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 (“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.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "C$" or "CDN$" refer to Canadian dollars and all references to "common shares" and "shares" refer to the common shares in our capital stock, unless otherwise indicated. The terms "Lexaria" "we", "us", "our" and "Company" mean Company and/or our subsidiaries, unless otherwise indicated.

Company and Business Overview

We are a biotechnology R&D company incorporated in 2004 in Nevada and focused on developing and out licensing our patented DehydraTECH™ Technology. DehydraTECH improves delivery orally and topically of active ingredients and drugs. The Company is focusing its capital and management time on its pursuit of intellectual property, technology licensing opportunities, and an expanding portfolio of patent pending applications.

The Company developed a variety of demonstration products throughout 2015 to demonstrate the potential uses for DehydraTECH to both consumers and potential licensees. The Company subsequently developed additional demonstration products including powder filled capsules and mix and serve powders for beverage incorporation also utilizing DehydraTECH for the more palatable and efficient delivery of bioactive molecules. The Company gained extensive experience and knowledge from the formulation and production of these demonstration products that facilitates assisting our licensees with the integration of DehydraTECH in their products.

In the manufacturing of our intermediate ingredients for Consumer Packaged Goods (“CPG”) companies to use, each raw material, intermediate stage and completed product is assessed for compliance with all applicable regulations. The inputs and the finished ingredients meet all applicable legal and quality standards including and as it relates to content; molds and mildews; heavy metals; and other additional components.

Lexaria hopes to reduce other common but less healthy administration methods, such as smoking, as manufacturers embrace the intended benefits of DehydraTECH for public health. The Company is aggressively pursuing patent protection in national jurisdictions around the world. The Company currently has more than 50 patent applications pending worldwide and, due to the complexity of pursuing patent protection, the quantity of patent applications will vary continuously as each application advances or stalls. Lexaria 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 new applications might be filed.

As at November 30, 2020, we have identified two reportable operating segments: Intellectual Property and Products.

The following discussion should be read in conjunction with our condensed financial statements and accompanying notes in this quarterly report on Form 10-Q, our audited financial statements with notes in our annual report on Form 10-K for the year ended August 31, 2020.

Page 18 of 31

Our Current Business

Our business plan is currently focused on the development of strategic partnerships with licensees for our patented DehydraTECH technology in exchange for up front and/or staged licensing fees and/or royalty payments over time. We continue to investigate national and international opportunities to investigate expansions and additions to our intellectual property portfolio. We plan to perform additional human clinical investigations in early 2021 related to enhanced DehydraTECH formulations of cannabidiol in pre- and mildly-hypertensive middle-aged subjects to gather additional information on blood pressure reduction potential. Lexaria also plans to conduct during calendar 2021 evaluations of DehydraTECH’s ability to improve the oral delivery characteristics and pharmacological performance of certain antiviral drugs. We will continue to seek beneficial acquisitions of intellectual property if and when we believe it is advisable to do so.

Our current patent portfolio includes patent family applications or grants pertaining to Lexaria’s method of improving bioavailability and taste, and the use of DehydraTECH as a delivery platform for a wide variety of Active Pharmaceutical Ingredients (“APIs”) encompassing all cannabinoids including tetrahydrocannabinol (“THC”); fat soluble vitamins; NSAIDs pain medications; and nicotine and its analogs.

Lexaria hopes to reduce common but less healthy administration methods, such as smoking cigarettes as a delivery method for nicotine, by way of enabling development of safe and effective oral nicotine dosage forms through licensing arrangements with major tobacco companies, as it demonstrates the intended benefits of DehydraTECH for public health. The Company is aggressively pursuing patent protection in jurisdictions around the world. The Company currently has more than 50 patent applications pending worldwide, with 18 patents granted to date. Due to the complexity of pursuing patent protection, the quantity of patent applications will vary continuously as each application advances or stalls. Lexaria 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 new applications might be filed.

To date, the following patents have been issued in the United States, Australia and Europe:

Issued Patent #	Patent Issuance 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	03/02/2017
AU 2017203054	05/17/2018
AU 2018202562	05/17/2018
AU 2018202583	05/17/2018
AU 2018202584	09/27/2018
AU 2018220067	04/18/2019
EP 3164141	11/11/2020
AU 2016367036	04/18/2019	Methods for Formulating Orally Ingestible Compositions Comprising Lipophilic Active Agents
AU 2016367037	05/02/2019	Stable Ready-to-Drink Beverage Compositions Comprising Lipophilic Active Agents

Page 19 of 31

We are seeking additional patent protection for what we believe to be a unique process for oral delivery of certain molecules such as Cannabinoids, Nicotine, NSAIDs, and Vitamins. To achieve sustainable and profitable growth, our Company intends to control the timing and costs of our projects wherever possible. We have filed for patent protection of DehydraTECH for use with additional compounds such as phosphodiesterase inhibitors, human hormones such as estrogen and testosterone, antivirals and more. We are investigating other compounds and molecules for potential patent protection.

During the quarter ended November 30, 2020, and up to the date of this report, we experienced the following significant corporate developments:

On September 22, 2020, the Company announced that U.S. Patent No. 10,756,180 was granted; it has claims that protect the use of its DehydraTECH technology together with cannabinoids, nicotine, nonsteroidal anti-inflammatory drugs, or vitamins in mix and serve beverage formats. The patent is entitled “Food and Beverage Compositions Infused With Lipophilic Active Agents and Methods of Use Thereof”.

On November 19, 2020 the Company entered a definitive asset sale agreement through its wholly owned subsidiary Lexaria Canpharm ULC (“CanPharm”), to sell certain non-core, non-pharmaceutical THC-related business assets (the “THC-Related Assets”) for gross proceeds of C$3.85 million.

The buyer of the THC-Related Assets is Lexaria’s long-standing Canadian licensee Hill Street Beverage Company Inc. (“Hill Street”) (TSXV: BEER). Under the terms of the agreement, Hill Street will pay C$350,000 in cash on closing; an additional C$2,000,000 payable over time in the form of a promissory note bearing 10% interest per annum; and C$1,500,000 in common shares of Hill Street equity, issuable in three equal tranches of C$500,000 at closing; C$500,000 eight months after closing; and C$500,000 16 months after closing.

On December 2, 2020, the Company announced that its DehydraTECH technology significantly improved delivery in study animals of representative drugs from two classes of antiviral therapies (a Protease Inhibitor and a Reverse Transcriptase Inhibitor) under investigation against SARS-CoV-2/COVID-19 and already in use against HIV/AIDS. The study animals were not infected with or treated for any diseases.  These are the first two of a series of antiviral drugs to be tested using Lexaria’s DehydraTECH technology. The improved delivery of the antivirals along with the animal’s demonstrated safety and tolerability of the DehydraTECH formulations has led the Company to begin preparations for expanded investigations into antiviral drug delivery enhancement and effectiveness and filing additional patent applications.

Drug	Drug Class	AUClast* Delivery & Improvement  (hr∙ng/mL)	Control  (hr∙ng/mL)	AUC∞** Delivery & Improvement  (hr∙ng/mL)	Control  (hr∙ng/mL)
Darunavir	Protease Inhibitor	721 ± 332 54%  (p=0.036)	469 ± 252	726 ± 211 35%  (p=0.062)	536 ± 223
Efavirenz	Non-nucleoside Reverse Transcriptase Inhibitor	752 ± 203  16%  (p=0.11)	650 ± 148	1072 ±40 42%  (p=0.028)	757 ±103

Page 20 of 31

The emergence of COVID-19 beginning in January of 2020, now in over 220 countries and territories around the world, presents significant and unforecastable new risks to the Company and its business plan. Restrictions on national and international travel, and required business closures, have made it increasingly difficult to carry out normal business activities related to corporate finance efforts, to the pursuit of new customers, and to retail customers throughout North America who might otherwise access the products of our business partners and licensees. As a result, the COVID-19 pandemic will almost certainly increase risks of lower revenues and higher losses. We are monitoring our licensees and are working with them, where possible, to prevent default and contract terminations. In some cases we have had to issue termination of contract notices in accordance to provisions within our contracts.

The Company is encountering significant challenges in executing its business plan and normal business operations as a result of COVID-19 and does not have sufficient resources to withstand a protracted term during which most business activities are curtailed. We have implemented cost containment initiatives to reduce operating expenses and preserve cash that include dismissal of one employee, termination of contracts with two consultants and reduction of compensation payable to certain other consultants as a result of the COVID-19 pandemic. The Company currently has six (6) employees and/or independent contractors who dedicate all or a majority of their time to the business of the Company and eight (8) consultants. We may need to dismiss additional employees or terminate services contracts to preserve resources. We have not had to close operations or locations as our contractors and staff can work remotely and our third-party facilities continue to operate. To the date of this report, we have not directly had to quarantine contractors or staff, however we have implemented additional safety precautions and measures for their protection. Due to our historic and current geographic diversity of our contractors and employees, we have long established and ongoing experience in remote work and collaboration. Our procedures and controls have been built over time to address remote working requirements.

We have not experienced any significant impacts on our material supply chains but have noted increased timelines from some third-party research facilities regarding their ability to conduct research and testing. To date, this has not significantly impacted our R&D programs, but we cannot predict whether our R&D programs will be impacted in the future.

The Company is simultaneously investigating emerging opportunities related to the COVID-19 crisis in relation to its patented DehydraTECH technology that has been tested for its superior delivery of other compounds and drugs, and whether any of these characteristics might be applicable to compounds or drugs used to treat symptoms caused by the Coronavirus. It is unknown at this time whether there is any such applicability.

On March 19, 2020 the Company announced that it intended to commence a program to conduct tests to research the intended benefits of DehydraTECH in connection with enhancing the delivery of certain antiviral drugs. The tests are intended to include a pilot human pharmacokinetic exploratory study in healthy volunteers of two antiviral drugs that had previously been studied against other coronavirus strains, comparing DehydraTECH formulations to controls without DehydraTECH. The Company intends to conduct the study at a leading Canadian university where a study design and plan was submitted and ethics board approval was received. The study is subject to further government regulatory approval. The Company is currently in the process of pursuing the necessary steps to file for study approval from Canadian federal regulators.

In parallel, the Company launched a separate rodent antiviral study to evaluate pharmacokinetic benefits from the use of DehydraTECH in the delivery of representative drugs from two classes of antiviral drugs under investigation for treatment of COVID-19. The results of that animal study were released on December 1, 2020 whereby the DehydraTECH enhanced antiviral drug formulations demonstrated increased delivery effectiveness of the antiviral drugs into the bloodstream of the animals. The results of this animal study have encouraged the Company to conduct expanded investigations into antiviral drug delivery enhancement, with such investigations including remdesivir (a nucleotide reverse transcriptase inhibitor); as well as three additional drugs known to target the main protease associated with SARS-CoV-2 infection. The Company intends to make its research results available to researchers throughout the world looking to maximize the effectiveness of their own drug investigations. The Company’s business model relies on performing early stage studies like these to help support its efforts to form commercial relationships with more established companies.

The Company continues to monitor governmental programs being released to assist with the COVID-19 pandemic.

Page 21 of 31

Subsequent to November 30, 2020

On December 10, 2020 the Company announced that it closed the sale of its non-pharmaceutical THC-related assets (“the Assets”) held within Lexaria Canpharm ULC to Hill Street Beverage Company Inc. Lexaria received C$350,000 in cash, 6,031,363 restricted common shares of Hill Street at a deemed price of C$0.0829 per share as the first required equity-based payment, a promissory note having a principal amount of C$2,000,000 and bearing interest at the rate of 10% per annum, and a limited license to use the DehydraTECH technology outside of Canada and the US for certain non-pharmaceutical, therapeutic and medicinal products that contain 0.3% or greater THC and which are not classified by a national regulator as drug, pharmaceutical or biopharmaceutical product. Pursuant to the terms of the transaction, Lexaria will receive another C$1,000,000 worth of common shares of Hill Street over a period sixteen months in C$500,000 issuances eight months and sixteen months after the closing date.

On January 11, 2021, the Company performed a 1:30 reverse stock split with no fractional shares issued. The issued and outstanding balance of shares at that time changed from 90,044,312 to 3,001,476 as per shareholder approval at the annual general meeting of the company held June 23, 2020. On January 12, 2021, the Company began its listing its common shares on the NASDAQ exchange under the symbol LEXX.

On January 14, 2021, the Company closed an underwritten public offering for $11,039,994, issuing 2,102,856 units consisting of one common share and one warrant for $5.25. Total fees of $1,410,506 were estimated at time of closing.  The warrants issued will trade under the symbol LEXXW.

Research and Development

During the quarter ended November 30, 2020, Lexaria incurred $192,261 (2019 $107,463) in research and development expenditures during the period ending November 30, 2020. Specific R&D programs are in ongoing development and will be tightly related to our financial ability to undertake each research phase for each API. Due to our expanding portfolio coverage, we are continuing to examine accelerated timetable options for testing, research and development of each API.

The Company’s plans to include in vitro absorption tests of our patented technology of molecules such as: Vitamin E, Ibuprofen, and Nicotine allowed us to perform testing on Nicotine with positive results. Our plan to conduct our first ever in vivo absorption tests on CBD also yielded positive results, and in our first preclinical tests of representative drugs from two classes of antiviral therapies we had positive results. Ongoing testing plans are proceeding to further define molecular compatibility, absorption rates, timing and viable formats of delivery.

The Company continually focuses on new R&D programs to investigate the potential of additional commercial applications for its Technology. These include, but are not limited to, ongoing programs to explore methods to integrate nanoemulsification chemistry techniques together with its technology and to further enhance intestinal bioabsorption rates with its technology, as well as ongoing programs to expand the types and breadth of product form factors into which its technology can be applied. Depending on how many of these tests are undertaken, R&D budgets are expected to vary significantly. It is in our best interests to remain flexible at this early stage of our R&D efforts in order to capitalize on potential novel findings from early-stage tests and thus re-direct research into specific avenues that offer the most reward.

Page 22 of 31

Off-Balance Sheet Arrangements

We have no 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 US GAAP. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financials.

Capital Assets

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

Patents

Capitalized patent costs represent legal costs incurred to establish patents. When patents reach a mature stage, any associated legal costs are comprised mostly of maintenance fees and are expensed as incurred. Capitalized patent costs are amortized on a straight-line basis over the remaining life of the patent.

Revenue Recognition

Product Revenue

Revenue from the sale of products is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured, which typically occurs upon shipment. The Company reports its sales net of the amount of actual sales returns. Sales tax collected from customers is excluded from net sales.

Licensing Revenue from Intellectual Property

We recognize revenue for license fees at a point in time following the transfer of our intellectual property, our patented lipid nutrient infusion technology DehydraTECH for infusing APIs, to the 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 product lines for sale.

Page 23 of 31

Going Concern

We have suffered recurring losses from operations. The continuation of our Company as a going concern is dependent upon our Company attaining and maintaining profitable operations and/or raising additional capital. The 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. The recurring losses from operations and net capital deficiency raise substantial doubt about the Company’s ability to continue as a going concern.

Results of Operations for our Period Ended November 30, 2020 and November 30, 2019

Our net loss and comprehensive loss and the changes between those periods for the respective items are summarized as follows:

	THREE MONTHS ENDED
	November 30			November 30
	2020			2019			Change
	$			$			$
Revenue		295,656			10,332			285,324
Consulting fees & employees		331,512			571,389			(239,877	)
Legal and professional		248,695			52,355			196,340
Other general and administrative		364,092			354,841			9,251
Discontinued operations		3,000			51,344			(48,344	)
Net Loss		(710,121	)		(924,763	)		214,642

Revenue

Product revenues of $164,990 represent more than half of revenues during the period ended November 30, 2020, the majority of which are intermediate product sales to business customers. Intermediate products we produce are typically a DehydraTECH enabled powder that third party companies include in their product’s manufacturing process. Our licensing revenue of $130,584 was primarily related to intermediate product sales.

A significant number of our licensees are experiencing suspended business activities in Canada in part from waiting on product approval by Health Canada and the impact of the COVID-19 on markets and consumer spending, however this phenomenon has been mitigated following the sale of our THC-related business division that closed on December 9, 2020. The abilities of other licensees to generate ongoing sales, thereby increasing usage fees are expected to continue to be impacted by the pandemic. We are working with our licensees to assist them and prevent further license terminations. However, we are not able to determine how severe the long-term impact of the pandemic will be and when recovery of the general economy will translate into increasing 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 (Note 7).

Our intermediate products, which easily allows consumer product manufacturers to add DehydraTECH enabled powder to their existing products, are expected to simplify and enhance the adoption of our Technology for manufacturers. We have continued interest in our intermediate products but cannot predict how long the pandemic will affect purchasing decisions of retail customers that will affect the consumer product manufacturers that utilize our intermediate products.

Page 24 of 31

The majority of our revenue was primarily based on one licensee of our intermediate products ramping up their production and product distribution. From the initial introduction of our intermediate products in the second quarter of our fiscal 2020 year, we have experienced substantial growth in intermediate product sales.

During the period ended November 30, 2020, our revenues were derived within the following categories: $130,584 (2020: $51,344 in discontinued operations) of intellectual property licensing revenue and $164,990 (2020: $10,015) in product revenues (Note 14, 16).

General and Administrative

Our total general and administrative expenses (consisting of consulting & wages, legal & professions, and all other) decreased by $34,286 during the period ended November 30, 2020. The decrease is comprised of reductions in consulting expense, travel and wages due to staffing decreases, offset by increases legal filing for patents and research programs being initiated. We are continuing to focus on cost constraints to preserve cash where possible while executing portions of our business plan.

Interest Expense

Interest expense for the period ended November 30, 2020 was $Nil (2019: $Nil). The Company has a C$40,000 noninterest-bearing loan until January 2023 (Note 19).

Consulting Fees

Our consulting fees decreased by $227,782, which is primarily due to non-cash stock-based compensation included in 2020 of $233,166 that was not incurred in the current period.

Legal and Professional Fees

Our professional fees increased by $196,340 during the period primarily due to increased patent and trademark filings and additional advisory services utilized during the period. We recognize certain legal fees, tax advice fees, and accounting services all as “Professional Fees.”

Liquidity and Financial Condition

Working Capital	November 30			August 31
	2020			2020
	$			$
Current assets		1,307,714			1,925,961
Current liabilities		(242,475	)		(225,917	)
Net Working Capital		1,065,239			1,700,044

Page 25 of 31

The Company’s working capital balance decreased during the period due to normal execution of our business plan. The Company maintained a positive and relatively strong working capital position throughout the period.

	November 30			November 30
	2020			2019
Cash Flows	$			$
Cash flows (used in) provided by operating activities		(818,300	)		(555,078	)
Cash flows (used in) provided by investing activities		(5,775	)		(5,710	)
Cash flows (used in) provided by financing activities		-			706,704
Net cash flows (used in) discontinued operations		55,667			(97,742	)
Increase (decrease) in cash		(768,408	)		48,174

Operating Activities

Net cash used in operating activities was $818,300 for the period compared with cash used in operating activities of $555,078 during the same period in 2020. This difference was largely due to the increased costs pertaining to professional fees and research and development.

Investing Activities

Net cash used in investing activities was $5,775 (2020 $5,710) for the period to support capitalized patent filings.

Financing Activities

Net cash provided from financing activities was $NIL during the period ended November 30, 2020.

Liquidity and Capital Resources

We have accumulated a large deficit since inception that has primarily resulted from executing our business plan including research and development expenditures we have made 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 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 concerns over a global recession may have a significant impact on the availability of funding sources and the terms at which any funding may be available.

Short Term Liquidity

At November 30, 2020 we had $525,341 in cash and cash equivalents. On January 14, 2021 we closed an underwritten public offering for $11,039,994, issuing 2,102,856 units consisting of one common share and one warrant for $5.25. Total fees of $1,410,506 were estimated at time of closing. We believe our cash resources are sufficient to allow us to continue operations for at least the next twelve months from the date of this Quarterly Report.

Page 26 of 31

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. We will need to obtain significant funding from existing or new relationships, increasing revenue streams or from other sources of liquidity such as the sale of equity, issuance of debt or other transactions.

The exact requirements will vary depending on the results of research programs and the requirements of each industry segment that we pursue. Pursuit of each segment will be prosecuted or 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, to market and license it. These changes to requirements and transactions may impact our liquidity as well as affect our expenses.

Item 4. 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 the Securities 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 and Chief Executive Officer (Principal Executive Officer) and our Chief Financial Officer (Principal Financial and Accounting Officer) to allow for timely decisions regarding required disclosure.

As of November 30, 2020, the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our CEO, President and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our President, CEO and the CFO concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of November 30, 2020.

Management’s Report on Internal Control over Financial Reporting

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 US GAAP. Our management assessed the effectiveness of our internal control over financial reporting as of November 30, 2020. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. Our management has concluded that, as of November 30, 2020, 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 GAAP. Our management reviewed the results of their assessment with our Board of Directors.

Page 27 of 31

Inherent limitations on Effectiveness of 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. 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 November 30, 2020 our controls and controls processes remained consistent with August 31, 2020. There have been no changes in our internal controls over financial reporting that occurred during the quarter ended November 30, 2020 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.

Page 28 of 31

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, existing or pending legal proceedings against our 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.

The risks associated with our business, common stock and other factors were with those described in the consolidated financial statements for the year ended August 31, 2020.

Page 29 of 31

Item 6. Exhibits, Financial Statement Schedules

31.1	Section 302 Certifications under Sarbanes-Oxley Act of 2002 of Principal Executive Officer
31.2	Section 302 Certifications under Sarbanes-Oxley Act of 2002 of Principal Financial Officer and Principal Accounting Officer
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

*Incorporated by reference to same exhibit filed with the Company's Registration Statement on Form SB-2 dated January 10, 2006.

** 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.

Page 30 of 31

SIGNATURES

Pursuant to the requirements 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: January 14, 2021
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: January 14, 2021
By:	/s/ John Docherty
John Docherty
President and Director
Date: January 14, 2021
By:	/s/ Allan Spissinger
Allan Spissinger CPA, CA
Chief Financial Officer
(Principal Financial and Accounting Officer)
Date: January 14, 2021

Page 31 of 31

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

18 U.S.C. ss 1350, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Chris Bunka, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Lexaria Bioscience Corp.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s first fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 14, 2021

/s/ “ Chris Bunka “

Chris Bunka

CEO and Director

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

18 U.S.C. ss 1350, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Allan Spissinger, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Lexaria Bioscience Corp.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's first fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: January 14, 2021

/s/ "Allan Spissinger"

Allan Spissinger CPA, CA

Chief Financial Officer and Treasurer

(Principal Financial Officer and Principal Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Chris Bunka, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	the Quarterly Report on Form 10-Q of Lexaria Bioscience Corp. for the quarter ended November 30, 2020 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Lexaria Bioscience Corp.

Dated:  January 14, 2021	/s/ " Chris Bunka "
	Chris Bunka
	CEO and Director
	(Principal Executive Officer)
	Lexaria Bioscience Corp.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Lexaria Bioscience Corp. and will be retained by Lexaria Bioscience Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Allan Spissinger, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	the Quarterly Report on Form 10-Q of Lexaria Bioscience Corp. for the quarter ended November 30, 2020 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Lexaria Bioscience Corp.

Dated:  January 14, 2021	/s/ " Allan Spissinger "
	Allan Spissinger CPA, CA
	Chief Financial Officer and Treasurer
	(Principal Financial Officer and Principal Accounting Officer)
	Lexaria Bioscience Corp.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Lexaria Bioscience Corp. and will be retained by Lexaria Bioscience Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Nov. 30, 2020	Jan. 14, 2021
Document and Entity Information [Abstract]
Entity Registrant Name	Lexaria Bioscience Corp.
Entity Central Index Key	0001348362
Current Fiscal Year End Date	--08-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		5,104,332
Document Type	10-Q
Document Period End Date	Nov. 30, 2020
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity Interactive Data Current	Yes

XML

CONSOLIDATED BALANCE SHEET - USD ($)	Nov. 30, 2020	Aug. 31, 2020
Current
Cash and cash equivalents	$ 525,341	$ 1,293,749
Marketable securities (Note 20)	43,731	19,321
Accounts receivable (Note 7)	427,330	208,925
Inventory (Note 8)	125,963	116,871
Prepaid expenses and deposit (Note 18)	136,016	182,095
Current assets from discontinued operations (Note 21)	49,333	105,250
Total Current Assets	1,307,714	1,926,211
Non-current assets, net
Lease right of use	118,193	126,920
Intellectual Property (Note 9)	296,058	292,000
Property & equipment (Note 10)	452,355	483,357
Total Non-current Assets	866,606	902,277
TOTAL ASSETS	2,174,320	2,828,488
Current
Accounts payable and accrued liabilities (Note 11)	83,095	86,920
Deferred revenue	35,500	44,255
Due to a related party (Note 15)	87,185	58,704
Lease current (Note 17)	36,695	36,038
Current liabilities from discontinued operations (Note 21)	0	250
Total Current Liabilities	242,475	226,167
Long Term
Lease long term (Note 17)	79,969	89,393
Loan payable (Note 19)	30,852	30,670
Total Long Term Liabilities	110,821	120,063
TOTAL LIABILITIES	353,296	346,230
STOCKHOLDERS' EQUITY
Share Capital Authorized: 220,000,000 common voting shares with a par value of $0.001 per share Issued and outstanding: 3,001,476 common shares at November 30, 2020 and 3,001,476 common shares at August 31, 2020	3,001	3,001
Additional paid-in capital	30,373,285	30,324,398
Deficit	(28,498,226)	(27,802,198)
Equity attributable to shareholders of the Company	1,878,060	2,525,201
Non-Controlling Interest	(57,036)	(42,943)
Total Stockholders' Equity	1,821,024	2,482,258
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 2,174,320	$ 2,828,488

XML

CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares	Nov. 30, 2020	Aug. 31, 2020
Statement of Financial Position [Abstract]
Common stock, shares authorized	220,000,000	220,000,000
Common stock, par value per share (in dollars per share)	$ 0.001	$ 0.001
Common Stock, Shares, Issued	3,001,476	3,001,476
Common Stock, Shares, Outstanding	3,001,476	3,001,476

XML

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)	3 Months Ended
	Nov. 30, 2020	Nov. 30, 2019
Income Statement [Abstract]
Revenue (Note 14)	$ 295,656	$ 10,332
Cost of goods sold	64,478	7,853
Gross profit	231,178	2,479
Expenses
Accounting and audit	15,628	19,036
Depreciation and amortization (Note 9, 10)	27,929	27,512
Advertising and promotions	27,906	45,861
Bad debt	12,000
Consulting (Notes 13, 15, 17)	256,014	483,796
Investor relations	33,964	17,515
Legal and professional	248,695	52,355
Office and miscellaneous	76,517	74,027
Research and development	192,261	107,463
Travel	532	21,853
Wages & salaries	75,498	87,593
Unrealized (gain) loss on marketable securities (Note 19)	(24,410)	41,574
Inventory writeoff (Note 8)	1,765
Total Operating Expenses	944,299	978,585
Net loss from continuing operations	(713,121)	(976,106)
Discontinued operations
Income from discontinued operations (Note 21)	3,000	51,344
Net (loss) and comprehensive loss for the year	(710,121)	(924,762)
Net (loss) and comprehensive loss attributable to:
Common shareholders	(696,028)	(907,312)
Non-controlling interest	$ (14,093)	$ (17,450)
Basic and diluted (loss) per share
Continuing operations	$ (0.24)	$ (0.35)
Discontinued operations	0.00	0.02
Basic and diluted (loss) per share (in dollars per share)	$ (0.24)	$ (0.33)
Weighted average number of common shares outstanding
Basic and diluted (in shares)	3,001,476	2,636,578

XML

CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($)	3 Months Ended
	Nov. 30, 2020	Nov. 30, 2019
Cash flows used in operating activities
Net loss and comprehensive loss	$ (710,121)	$ (924,762)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation	48,887	162,414
Depreciation and amortization (Note 8, 9, 10)	27,929	27,512
Inventory write-off (Note 8)	1,765
Bad debt expense	12,000
Noncash right of use lease expense	8,727
Unrealized loss on marketable securities	(24,410)	41,574
Unrealized foreign exchange	182
Warrants issued for services		70,752
Change in working capital
Accounts receivable	(230,405)	155,010
Inventory	(6,067)	(6,160)
Prepaid expenses and deposits	46,079	(27,140)
Accounts payable and accrued liabilities	(3,825)	(43,382)
Due to related parties	28,481	(10,896)
Operating lease liability	(8,767)
Deferred revenue	(8,755)
Net cash used in operating activities	(818,300)	(555,079)
Cash flows used in investing activities
Intellectual property	(5,775)	(5,710)
Property & equipment	0	0
Net cash used in investing activities	(5,775)	(5,710)
Cash flows from financing activities
Proceeds from issuance of equity		706,704
Net cash from financing activities		706,704
Net cash from discontinued operations	55,667	(97,742)
Net Change in cash and cash equivalents for the period	(768,408)	48,174
Cash and cash equivalents, beginning of period	1,293,749	1,285,147
Cash and cash equivalents, end of period	525,341	1,333,321
Supplemental information of cash flows:
Income taxes paid in cash	$ 3,540	957
Subscription Receivable		$ 110,025

XML

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)	COMMON STOCK	ADDITIONAL PAID-IN CAPITAL	DEFICIT	NCI	Total
Balance at Aug. 31, 2019	$ 2,626	$ 26,248,614	$ (23,868,202)	$ 107,674	$ 2,490,712
Balance (Shares) at Aug. 31, 2019	2,626,236
Stock based compensation		162,414			162,414
Warrants issued for services		70,752			$ 70,752
Exercise of stock options (in shares)					7,333
Private Placement	$ 61	815,959			$ 816,020
Private Placement (Shares)	60,792
Net loss			(907,313)		(907,312)
Non-controlling Interest				(17,450)	(17,450)
Balance at Nov. 30, 2019	$ 2,687	27,297,739	(24,775,515)	90,224	2,615,135
Balance (Shares) at Nov. 30, 2019	2,687,028
Stock based compensation		294,293			294,293
Exercise of stock options	$ 4	10,996			11,000
Exercise of stock options (in shares)	3,667
Net loss			(950,344)		(950,344)
Non-controlling Interest				(47,148)	(47,148)
Balance at Feb. 29, 2020	$ 2,691	27,603,028	(25,725,859)	43,076	1,922,936
Balance (Shares) at Feb. 29, 2020	2,690,695
Stock based compensation		682,563			682,563
Warrants issued for services		98,081			98,081
Private Placement	$ 296	1,887,310			1,887,606
Private Placement (Shares)	295,540
Net loss			(1,361,381)		(1,361,381)
Non-controlling Interest				(29,272)	(29,272)
Balance at May. 31, 2020	$ 2,986	30,270,983	(27,087,240)	13,804	3,200,533
Balance (Shares) at May. 31, 2020	2,986,235
Exercise of stock options	$ 4	19,026			19,030
Exercise of stock options (in shares)	3,667
Shares issued for services	$ 12	99,988			100,000
Shares issued for services (Shares)	11,574
Private Placement		(65,600)			(65,600)
Net loss			(714,958)		(714,958)
Non-controlling Interest				(56,747)	(56,747)
Balance at Aug. 31, 2020	$ 3,001	30,324,398	(27,802,198)	(42,943)	2,482,258
Balance (Shares) at Aug. 31, 2020	3,001,476
Stock based compensation		48,887			48,887
Net loss			(696,028)		(696,028)
Non-controlling Interest				(14,093)	(14,093)
Balance at Nov. 30, 2020	$ 3,001	$ 30,373,285	$ (28,498,226)	$ (57,036)	$ 1,821,024
Balance (Shares) at Nov. 30, 2020	3,001,476

XML

Organization, Business and Going Concern

3 Months Ended

Nov. 30, 2020

Organization, Business And Going Concern [Abstract]

Organization, Business and Going Concern

1.

Organization, Business and Going Concern

Lexaria Bioscience Corp. (“Lexaria”, or the “Company”) was formed on December 9, 2004 under the laws of the State of Nevada. In March of 2014, the Company began work in the fields of enhanced delivery of active ingredients and drugs. In May 2016, the Company commenced out-licensing its patented DehydraTECH™ technology (the “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. The Company’s unaudited interim consolidated financial statements 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 (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. These unaudited interim consolidated financial statements should be read in 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, 2020. The Company’s unaudited interim consolidated financial statements have been prepared in accordance with US GAAP 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 recurring losses from operations and net capital deficiency raise substantial doubt about the Company’s ability to continue as a going concern. The Company requires additional funds or revenues 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. In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak and any related adverse public health developments may adversely affect workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or results of operations at this time. During November of 2020, our Board of Directors ("Board") approved a plan to sell the businesses assets underlying our Canpharm THC related segment. As a result, the related financial results were reflected in our consolidated statement of income, retrospectively, as discontinued operations beginning in the first quarter of fiscal 2021. On November 18, 2020, we signed a definitive agreement to sell the assets. As at November 30, 2020, the transaction was pending final approval from the TSX Venture Exchange. As a result, the related assets and liabilities associated with the discontinued operations in the prior year consolidated balance sheet are classified as discontinued operations. See "Note 21 - Discontinued Operations" for additional information. Subsequent to November 30, 2020, the Company approved a 1:30 reverse stock split with no fractional shares issued.  All share and per share information within these condensed interim consolidated financial statements have been retroactively restated to reflect the effects of the approved reversed stock split.

XML

Business Risk and Liquidity

3 Months Ended

Nov. 30, 2020

Business Risk And Liquidity [Abstract]

Business Risk and Liquidity

2.

Business Risk and Liquidity

The Company is subject to several categories of risk associated with its operating activities. 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 continue 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. Lexaria does have an ancillary involvement risk via out-licensing of its patented technology to licensees that choose to utilize DehydraTECH 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.

Lexaria and its subsidiaries are not involved directly or indirectly in the production or sale of any products containing nicotine. Products containing nicotine have historically been involved in litigation in the USA. Lexaria’s corporate licensee may introduce products containing nicotine that utilize DehydraTECH to the US consumer market, which could therefore introduce third-party risks to Lexaria.

Lexaria and its subsidiaries are not involved directly or indirectly in the production or sale of any pharmaceutical or antiviral products. Licensees may enhance their product’s delivery using our Technology, which could therefore introduce third-party risks to Lexaria.

XML

Significant Accounting Policies

3 Months Ended

Nov. 30, 2020

Accounting Policies [Abstract]

Significant Accounting Policies

3. 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, 2020.

XML

Basis of Consolidation

3 Months Ended

Nov. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Consolidation

4.

Basis of Consolidation

These interim consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries; Lexaria CanPharm ULC, PoViva Corp., Lexaria Hemp Corp., Kelowna Management Services Corp. and Lexaria Pharmaceutical Corp., and our 83.333% 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.

XML

Estimates and Judgments

3 Months Ended

Nov. 30, 2020

Estimates And Judgments [Abstract]

Estimates and Judgments

5.

Estimates and Judgments

The preparation of financial statements in conformity with U.S 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. We believe that these estimates are reasonable; however, actual results could 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 audited consolidated financial statements for the year ended August 31, 2020.

XML

Recent Accounting Guidance

3 Months Ended

Nov. 30, 2020

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Guidance

6. Recent Accounting Guidance

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 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. In November 2019 FASB issued ASU No 201910 revised the effective date based on updated criteria with the effective date for fiscal years beginning after December 15, 2022. 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.

XML

Accounts and Other Receivables

3 Months Ended

Nov. 30, 2020

Accounts and Financing Receivable, after Allowance for Credit Loss [Abstract]

Accounts and Other Receivables

7. Accounts and Other Receivables

	November 30		August 31
	2020		2020
	$		$
Trade and deposits receivable		3,792		82,492
Intellectual Property Fees		325,304		38,250
Sales tax receivable		98,234		88,183
		427,330		208,925

XML

Inventory

3 Months Ended

Nov. 30, 2020

Inventory Disclosure [Abstract]

Inventory

8.       Inventory

	November 30		August 31
	2020		2020
	$		$
Raw materials		53,676		51,404
Work in progress		11,557		15,705
Finished goods		60,730		49,762
		125,963		116,871

During the period ended November 30, 2020, the Company wrote down $1,765 (2020 - $8,240 full year) of inventory to reflect its net realisable value.

XML

Intellectual Property

3 Months Ended

Nov. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Intellectual Property

9.	Intellectual Property
	The following is a list of US capitalized patents held by the Company

Issued Patent #	Patent Issuance 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

The Company also holds non-capitalized patents outside the US. A continuity schedule for capitalized patents is presented below:

	November 30			August 31
	2020			2020
	$			$
Balance - beginning		292,000			265,127
Addition		5,775			33,645
Amortization*		(1,717	)		(6,772	)
Balance - ending		296,058			292,000
*The patents are amortized over their legal life of 20 years.

XML

Property & Equipment

3 Months Ended

Nov. 30, 2020

Proceeds from Sale of Property, Plant, and Equipment [Abstract]

Property & Equipment

10.      Property & Equipment
 

	Cost		Period Amortization			Disposal			Accumulated Amortization			Net Balance November 30, 2020
Quarter Ended November 30, 2020	$		$			$			$			$
Leasehold improvements		259,981		(13,509	)		—			(100,120	)		159,861
Computers		63,964		(4,920	)		—			(36,789	)		27,175
Furniture fixtures equipment		34,220		(1,604	)		(3,094	)		(11,608	)		19,518
Lab equipment		291,235		(10,967	)		—			(45,434	)		245,801
		649,400		(31,001	)		(3,094	)		(193,951	)		452,355

	Cost		Period Amortization			Accumulated Amortization			Net Balance August 31, 2020
Year Ended August 31, 2020	$		$			$			$
Leasehold improvements		259,981		(53,268	)		(86,610	)		173,371
Computers		63,964		(19,681	)		(31,869	)		32,095
Furniture fixtures equipment		34,220		(7,036	)		(13,097	)		21,123
Lab equipment		291,235		(27,921	)		(34,467	)		256,768
		649,400		(107,906	)		(166,043	)		483,357

During the three month period ended November 30, 2020, $4,790 of amortization was included in the cost of inventory.

XML

Accounts Payable and Accrued Liabilities

3 Months Ended

Nov. 30, 2020

Payables and Accruals [Abstract]

Accounts Payable and Accrued Liabilities

11. Accounts Payable and Accrued Liabilities

	November 30		August 31
	2020		2020
	$		$
Accounts Payable
Trades payable		12,659		45,080
Accrued Liabilities
Corporate tax payable		1,785		3,834
Trades payable		68,651		38,006
Balance - ending		83,095		86,920

XML

Common Shares and Warrants

3 Months Ended

Nov. 30, 2020

Equity [Abstract]

Common Shares and Warrants

12.        Common Shares and Warrants

 During the quarter ended November 30, 2020 the Company did not issue any shares or warrants.

A continuity schedule for warrants is presented below:

	Number of Warrants			Weighted Average Exercise Price $
Balance August 31, 2019		94,177			41.40
Cancelled/expired		(25,000	)		44.90
Issued		402,431			12.74
Balance August 31, 2020		471,608			16.77
Cancelled/expired		(32,510	)		67.50
Balance November 30, 2020		439,098			14.68

A summary of warrants outstanding as of November 30, 2020 is presented below:

# of Warrants		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price $
	3,333	0.47 years		28.80
	8,333	0.48 years		46.50
	25,000	0.86 years		4.20
	291	0.95 years		36.00
	7,500	1.93 years		24.00
	51,808	3.96 years		36.00
	8,983	4.00 years		36.00
	16,666	4.29 years		9.00
	267,616	4.43 years		10.50
	49,568	4.45 years		10.50
	439,098	4.01 years		14.68

XML

Stock Options

3 Months Ended

Nov. 30, 2020

Share-based Payment Arrangement [Abstract]

Stock Options

13.

Stock Options

The Company has established the 2014 Stock Option Plan whereby the board of directors may, from time to time, grant up to 62,917 stock options to directors, officers, employees, and consultants; and the 2019 Equity Incentive Plan whereby the board of directors may, from time to time, grant up to 261,290 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. The Company did not grant options during the quarter ended November 30, 2020. 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, 2019		166,767			21.30
Cancelled/expired		(149,437	)		29.51
Exercised		(7,333	)		4.09
Granted		161,600			11.66
Balance August 31, 2020		171,596			11.17
Cancelled		(1,333	)		12.90
Balance November 30, 2020 (Outstanding)		170,263			11.16		4.05		30,000
Balance November 30, 2020 (Exercisable)		146,231			10.51		4.05		30,000

XML

Revenues

3 Months Ended

Nov. 30, 2020

Revenues [Abstract]

Revenues

14. Revenues

	November 30  2020 $		November 30  2019 $
Product sales		164,990		10,015
Licensing revenue		130,584		—
Freight revenue		82		317
Income from ongoing operations		295,656		10,332
Income from discontinued operations		3,000		51,750
		298,656		62,082

During the three months ended November 30, 2020, the Company recognized $3,138 of Intellectual Property Licensing fees and $127,446 of usage fees from ongoing operations and $3,000 of income from discontinued operations (November 2019 - $33,750 licensing and $18,000 usage fees all relating to discontinued operations). Revenues are significantly concentrated on one customer.

There was an increase in our intermediate product sales and licensing revenues in the current year compared to the prior year, which began in the second quarter of fiscal 2020, with increasing volume to customers. Intermediate products are typically a DehydraTECH enabled powder that companies can purchase to include in their products. Intermediate product sales and licensing revenue constituted the majority of our revenue. The licensing fees consist of intellectual property licensing fees for transfer of the Technology with the signing of definitive agreements for the DehydraTECH technology and usage fees.

XML

Related Party Transactions

3 Months Ended

Nov. 30, 2020

Related Party Transactions [Abstract]

Related Party Transactions

15. Related Party Transactions

					November 30						November 30
					2020						2019
	Contract		Non Cash		Total		Contract		Non Cash		Total
Management, consulting and director services	$		$		$		$		$		$
CAB Financial Services(1)		67,537		—		67,537		65,757		—		65,757
M&E Services Ltd.(1)		31,822		—		31,822		29,382		—		29,382
Docherty Management Limited(1)		52,579		—		52,579		56,730		—		56,730
Directors		17,076		—		17,076		16,717		—		16,717
		169,014		—		169,014		168,586		—		168,586

⁽¹⁾C.A.B. Financial Services is owned by the CEO of the Company, M&E Services Ltd. is owned by the CFO of the Company, and Docherty Management Limited is owned by the President of the Company.

All related party transactions pertain to management and director agreements entered into in the normal course of business (Note 17).

Due to related parties:

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

As at November 30, 2020, $87,185 (August 31, 2020 - $58,704) was payable to related parties and included in due to related parties.

XML

Segment Information

3 Months Ended

Nov. 30, 2020

Segment Reporting [Abstract]

Segment Information

16. 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. Licensing revenues are significantly concentrated on one licensee.

	IP Licensing $			Products $			Corporate $			Consolidated Total $
External revenue		130,584			165,072			—			295,656
CoGS		—			(64,478	)		—			(64,478	)
Operating expenses		(127,868	)		(92,038	)		(724,393	)		(944,299	)
Discontinued operations		3,000			—			—			3,000
Segment income(loss)		5,716			8,556			(724,393	)		(710,121	)
Total assets		817,830			125,963			1,230,527			2,174,320

Capital Asset by Region	Cost US		Disposal US			Net Balance US		Cost Canada		Net Balance Canada		Total Net Balance
Three Months Ended November 30, 2020	$		$			$		$		$		$
Leasehold Improvements		—		—			—		259,981		159,861		159,861
Computers		—		—			—		63,964		27,175		27,175
Furniture Fixtures Equipment		3,094		(3,094	)		—		31,126		19,518		19,518
Lab Equipment		98,050		—			79,128		193,185		166,673		245,801
		101,144		(3,094	)		79,128		548,256		373,227		452,355

Capital Asset by Region	Cost US		Net Balance US		Cost Canada		Net Balance Canada		Total Net Balance
Year Ended August 31, 2020	$		$		$		$		$
Leasehold Improvements		—		—		259,981		173,371		173,371
Computers		—		—		63,964		32,095		32,095
Furniture Fixtures Equipment		3,094		—		31,126		21,123		21,123
Lab Equipment		98,050		85,263		193,185		171,505		256,768
		101,144		85,263		548,256		398,094		483,357

XML

Commitments, Significant Contracts and Contingencies Management and Service Agreements

3 Months Ended

Nov. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments, Significant Contracts and Contingencies Management and Service Agreements

17. Commitments, Significant Contracts and Contingencies Management and Service Agreements:

As at November 30, 2020, the Company is party to the following contractual commitments:

Party	Monthly Commitment	Expiry Date
C.A.B Financial Services	CAD $29,706	January 1, 2022
Docherty Management Ltd.	CAD $25,609	January 1, 2022
M&E Services Ltd.	CAD $13,997	June 1, 2021
Corporate Development	CAD $1,500	Month to Month
Office Management	CAD $10,800	August 15, 2022
Research & Development	CAD $3,854	Month to Month
Office operating lease(1)	CAD $4,823	November 15, 2023

Right of Use Assets - Operating Lease

(1) Corporate office and R&D lab space leased in Kelowna, British Columbia, Canada until November 15, 2023 with an option to extend an additional five years. In addition to minimum lease payments, the lease requires us to pay property taxes and operating costs which are subject to annual adjustments.

Right of use assets - operating leases:	$
November 30, 2020		126,920
Amortization		(8,727	)
Total right of use assets		118,193
Liabilities:
November 30, 2020		125,431
Lease payments		(10,987	)
Interest accretion		2,220
Total lease liabilities		116,664
Operating lease cost as at November 30, 2020	$	118,193
Operating cash flows for lease		10,948
Remaining lease term	2.8 Years
Discount rate		7.25	%

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 November 30, 2020:

2021	32,746
2022	44,815
2023	44,815
2024	7,469
Thereafter	—
Total lease payments	129,845
Less: imputed interest	(13,181	)
Present value of operating lease liabilities	116,664
Less: current obligations under leases	(36,695	)
Total	79,969

XML

Prepaid Expenses

3 Months Ended

Nov. 30, 2020

Prepaid Expense, Current [Abstract]

Prepaid Expenses

18.         Prepaid Expenses

              Prepaid expenses consist of the following at November 30, 2020 and August 31, 2020:

	November 30		August 31
	2020		2020
	$		$
Advertising & conferences		21,539		21,878
Legal fees		130		47,498
Licence, filing fees, dues		30,138		8,541
Office & insurance		58,823		78,792
Research & development		25,386		25,386
		136,016		182,095

XML

Loan Payable

3 Months Ended

Nov. 30, 2020

Debt Disclosure Abstract

Loan Payable

19. Loan Payable

We have applied for, and received, governmental assistance related to the COVID-19 pandemic. As of November 30, 2020 there is one Canadian governmental programs that currently provides:

A Canadian dollar loan of C$40,000 under the Canada Emergency Business Account (CEBA) program. The loan is a 0% interest bearing loan with no principle payments and if repaid before December 31, 2022 will result in a loan forgiveness of 25% (up to C$10,000). The loan can be converted into a 3-year term loan at 5% annual interest paid monthly effective January 1, 2023.

XML

Marketable Securities

3 Months Ended

Nov. 30, 2020

Marketable Securities [Abstract]

Marketable Securities

20.        Marketable Securities

The components of Marketable Securities were as follows:

	Cost Basis  $		Unrealized  Gains $		Unrealized Losses $			Total $
August 31, 2020
Common stock		56,250		9,997		(38,584	)
Total		56,250		9,997		(46,926	)		19,321
November 30, 2020
Common stock		56,250		24,410		—
Total		56,250		34,407		(46,926	)		43,731

Unrealized losses from common stock are due to market price movements. Management does not believe any remaining unrealized losses represent other-than-temporary impairments based on our evaluation of available evidence. The COVID-19 pandemic has caused significant market turbulence and it is possible that our evaluation will change dependant upon new information as it arises.

XML

Discontinued Operations

3 Months Ended

Nov. 30, 2020

Discontinued Operations And Disposal Groups Abstract

Discontinued Operations

21. Discontinued Operations

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

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:

	THREE MONTHS ENDED
	November 30		November 30
	2020		2019
Revenue	$	3,000	$	51,750
Operating Expenses		—		406
Net Income	$	3,000	$	51,344

The following table presents cash flows of discontinued operations:

	THREE MONTHS ENDED
	November 30		November 30
	2020		2019
Cash flows used in discontinued operating activities
Net income	$	3,000	$	51,344
Change in working capital		55,667		(97,742	)
Net cash used in discontinued operating activities	$	58,667	$	(46,398	)
Net cash provided by (used in) discontinued operations		58,667		(46,398	)

The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations of the assets:

	November 30		August 31
	2020		2020
Current Assets
Accounts receivable	$	49,333	$	105,250
Total assets classified as discontinued operations in the consolidated balance sheet		49,333		105,250
Current Liabilities
Accounts payable	$	—	$	250
Total liabilities classified as discontinued operations in the consolidated balance sheet		—		250

XML

Subsequent Events

3 Months Ended

Nov. 30, 2020

Subsequent Events [Abstract]

Subsequent Events

22. Subsequent Events

1.	On December 9, 2020, the Company announced that it closed the sale of its non-pharmaceutical THC-related assets held within Lexaria Canpharm ULC to Hill Street Beverage Company Inc. Lexaria received C$350,000 in cash, 6,031,363 restricted common shares of Hill Street at a deemed price of C$0.0829 per share, a C$2,000,000 promissory note bearing interest at the rate of 10% per annum, and a limited license to use the DehydraTECH technology outside of Canada and the US for use with certain products that contain 0.3% or greater THC and which are not classified by a national regulator as drug, pharmaceutical or biopharmaceutical product. Pursuant to the terms of the transaction, Lexaria will receive another C$1,000,000 worth of common shares of Hill Street over a period sixteen months in C$500,000 issuances eight months and sixteen months after the closing date.
2.	On January 11, 2021, at 4:30 p.m. Eastern time, the Company performed a 1:30 reverse stock split with no fractional shares issued. The issued and outstanding balance of shares at that time changed from 90,044,312 to 3,001,476 as per shareholder approval at the annual general meeting of the company held June 23, 2020. Concurrently, the Company began listing its common shares on the NASDAQ exchange under the symbol LEXX.
3.	On January 14, 2021, the Company closed an underwritten public offering for $11,039,994, issuing 2,102,856 units consisting of one common share and one warrant for $5.25. Total fees of $1,410,506 were estimated at time of closing. The warrants issued will trade under the symbol LEXXW.

XML

Accounts and Other Receivables (Tables)

3 Months Ended

Nov. 30, 2020

Accounts and Financing Receivable, after Allowance for Credit Loss [Abstract]

Schedule of accounts and other receivables

	November 30		August 31
	2020		2020
	$		$
Trade and deposits receivable		3,792		82,492
Intellectual Property Fees		325,304		38,250
Sales tax receivable		98,234		88,183
		427,330		208,925

XML

Inventory (Tables)

3 Months Ended

Nov. 30, 2020

Inventory Disclosure [Abstract]

Schedule of Inventory

	November 30		August 31
	2020		2020
	$		$
Raw materials		53,676		51,404
Work in progress		11,557		15,705
Finished goods		60,730		49,762
		125,963		116,871

XML

Intellectual Property (Tables)

3 Months Ended

Nov. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of patents

	November 30			August 31
	2020			2020
	$			$
Balance - beginning		292,000			265,127
Addition		5,775			33,645
Amortization*		(1,717	)		(6,772	)
Balance - ending		296,058			292,000
*The patents are amortized over their legal life of 20 years.

XML

Property & Equipment (Tables)

3 Months Ended

Nov. 30, 2020

Proceeds from Sale of Property, Plant, and Equipment [Abstract]

Schedule of property & equipment

	Cost		Period Amortization			Disposal			Accumulated Amortization			Net Balance November 30, 2020
Quarter Ended November 30, 2020	$		$			$			$			$
Leasehold improvements		259,981		(13,509	)		—			(100,120	)		159,861
Computers		63,964		(4,920	)		—			(36,789	)		27,175
Furniture fixtures equipment		34,220		(1,604	)		(3,094	)		(11,608	)		19,518
Lab equipment		291,235		(10,967	)		—			(45,434	)		245,801
		649,400		(31,001	)		(3,094	)		(193,951	)		452,355

	Cost		Period Amortization			Accumulated Amortization			Net Balance August 31, 2020
Year Ended August 31, 2020	$		$			$			$
Leasehold improvements		259,981		(53,268	)		(86,610	)		173,371
Computers		63,964		(19,681	)		(31,869	)		32,095
Furniture fixtures equipment		34,220		(7,036	)		(13,097	)		21,123
Lab equipment		291,235		(27,921	)		(34,467	)		256,768
		649,400		(107,906	)		(166,043	)		483,357

XML

Accounts Payable and Accrued Liabilities (Tables)

3 Months Ended

Nov. 30, 2020

Payables and Accruals [Abstract]

Schedule of accounts payable and accrued liabilities

	November 30		August 31
	2020		2020
	$		$
Accounts Payable
Trades payable		12,659		45,080
Accrued Liabilities
Corporate tax payable		1,785		3,834
Trades payable		68,651		38,006
Balance - ending		83,095		86,920

XML

Common Shares and Warrants (Tables)

3 Months Ended

Nov. 30, 2020

Equity [Abstract]

Schedule of warrant

	Number of Warrants			Weighted Average Exercise Price $
Balance August 31, 2019		94,177			41.40
Cancelled/expired		(25,000	)		44.90
Issued		402,431			12.74
Balance August 31, 2020		471,608			16.77
Cancelled/expired		(32,510	)		67.50
Balance November 30, 2020		439,098			14.68

Schedule of warrants outstanding

# of Warrants		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price $
	3,333	0.47 years		28.80
	8,333	0.48 years		46.50
	25,000	0.86 years		4.20
	291	0.95 years		36.00
	7,500	1.93 years		24.00
	51,808	3.96 years		36.00
	8,983	4.00 years		36.00
	16,666	4.29 years		9.00
	267,616	4.43 years		10.50
	49,568	4.45 years		10.50
	439,098	4.01 years		14.68

XML

Stock Options (Tables)

3 Months Ended

Nov. 30, 2020

Share-based Payment Arrangement [Abstract]

Schedule of stock options

	Options			Weighted Average Exercise Price $		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value $
Balance August 31, 2019		166,767			21.30
Cancelled/expired		(149,437	)		29.51
Exercised		(7,333	)		4.09
Granted		161,600			11.66
Balance August 31, 2020		171,596			11.17
Cancelled		(1,333	)		12.90
Balance November 30, 2020 (Outstanding)		170,263			11.16		4.05		30,000
Balance November 30, 2020 (Exercisable)		146,231			10.51		4.05		30,000

XML

Revenues (Tables)

3 Months Ended

Nov. 30, 2020

Revenues [Abstract]

Schedule of revenue

	November 30  2020 $		November 30  2019 $
Product sales		164,990		10,015
Licensing revenue		130,584		—
Freight revenue		82		317
Income from ongoing operations		295,656		10,332
Income from discontinued operations		3,000		51,750
		298,656		62,082

XML

Related Party Transactions (Tables)

3 Months Ended

Nov. 30, 2020

Related Party Transactions [Abstract]

Schedule of related party transactions

					November 30						November 30
					2020						2019
	Contract		Non Cash		Total		Contract		Non Cash		Total
Management, consulting and director services	$		$		$		$		$		$
CAB Financial Services(1)		67,537		—		67,537		65,757		—		65,757
M&E Services Ltd.(1)		31,822		—		31,822		29,382		—		29,382
Docherty Management Limited(1)		52,579		—		52,579		56,730		—		56,730
Directors		17,076		—		17,076		16,717		—		16,717
		169,014		—		169,014		168,586		—		168,586

⁽¹⁾C.A.B. Financial Services is owned by the CEO of the Company, M&E Services Ltd. is owned by the CFO of the Company, and Docherty Management Limited is owned by the President of the Company.

XML

Segment Information (Tables)

3 Months Ended

Nov. 30, 2020

Segment Reporting [Abstract]

Schedule of the profit or loss and total assets for each reportable segment

	IP Licensing $			Products $			Corporate $			Consolidated Total $
External revenue		130,584			165,072			—			295,656
CoGS		—			(64,478	)		—			(64,478	)
Operating expenses		(127,868	)		(92,038	)		(724,393	)		(944,299	)
Discontinued operations		3,000			—			—			3,000
Segment income(loss)		5,716			8,556			(724,393	)		(710,121	)
Total assets		817,830			125,963			1,230,527			2,174,320

Schedule of capital asset by region

Capital Asset by Region	Cost US		Disposal US			Net Balance US		Cost Canada		Net Balance Canada		Total Net Balance
Three Months Ended November 30, 2020	$		$			$		$		$		$
Leasehold Improvements		—		—			—		259,981		159,861		159,861
Computers		—		—			—		63,964		27,175		27,175
Furniture Fixtures Equipment		3,094		(3,094	)		—		31,126		19,518		19,518
Lab Equipment		98,050		—			79,128		193,185		166,673		245,801
		101,144		(3,094	)		79,128		548,256		373,227		452,355

Capital Asset by Region	Cost US		Net Balance US		Cost Canada		Net Balance Canada		Total Net Balance
Year Ended August 31, 2020	$		$		$		$		$
Leasehold Improvements		—		—		259,981		173,371		173,371
Computers		—		—		63,964		32,095		32,095
Furniture Fixtures Equipment		3,094		—		31,126		21,123		21,123
Lab Equipment		98,050		85,263		193,185		171,505		256,768
		101,144		85,263		548,256		398,094		483,357

XML

Commitments, Significant Contracts and Contingencies Management and Service Agreements (Tables)

3 Months Ended

Nov. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of management and service agreements

Party	Monthly Commitment	Expiry Date
C.A.B Financial Services	CAD $29,706	January 1, 2022
Docherty Management Ltd.	CAD $25,609	January 1, 2022
M&E Services Ltd.	CAD $13,997	June 1, 2021
Corporate Development	CAD $1,500	Month to Month
Office Management	CAD $10,800	August 15, 2022
Research & Development	CAD $3,854	Month to Month
Office operating lease (1)	CAD $4,823	November 15, 2023

 

Right of Use Assets - Operating Lease
(1)	Corporate office and R&D lab space leased in Kelowna, British Columbia, Canada until November 15, 2023 with an option to extend an additional five years. In addition to minimum lease payments, the lease requires us to pay property taxes and operating costs which are subject to annual adjustments.

Schedule of information about operating lease

Right of use assets - operating leases:	$
November 30, 2020		126,920
Amortization		(8,727	)
Total right of use assets		118,193
Liabilities:
November 30, 2020		125,431
Lease payments		(10,987	)
Interest accretion		2,220
Total lease liabilities		116,664
Operating lease cost as at November 30, 2020	$	118,193
Operating cash flows for lease		10,948
Remaining lease term	2.8 Years
Discount rate		7.25	%

Schedule of maturities of operating lease liabilities

2021	32,746
2022	44,815
2023	44,815
2024	7,469
Thereafter	—
Total lease payments	129,845
Less: imputed interest	(13,181	)
Present value of operating lease liabilities	116,664
Less: current obligations under leases	(36,695	)
Total	79,969

XML

Prepaid Expenses (Tables)

3 Months Ended

Nov. 30, 2020

Prepaid Expense, Current [Abstract]

Schedule of prepaid expenses

	November 30		August 31
	2020		2020
	$		$
Advertising & conferences		21,539		21,878
Legal fees		130		47,498
Licence, filing fees, dues		30,138		8,541
Office & insurance		58,823		78,792
Research & development		25,386		25,386
		136,016		182,095

XML

Marketable Securities (Tables)

3 Months Ended

Nov. 30, 2020

Marketable Securities [Abstract]

Schedule of marketable securities

	Cost Basis  $		Unrealized  Gains $		Unrealized Losses $			Total $
August 31, 2020
Common stock		56,250		9,997		(38,584	)
Total		56,250		9,997		(46,926	)		19,321
November 30, 2020
Common stock		56,250		24,410		—
Total		56,250		34,407		(46,926	)		43,731

XML

Discontinued Operations (Tables)

3 Months Ended

Nov. 30, 2020

Discontinued Operations And Disposal Groups Abstract

Schedule of discontinued operations

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:

	THREE MONTHS ENDED
	November 30		November 30
	2020		2019
Revenue	$	3,000	$	51,750
Operating Expenses		—		406
Net Income	$	3,000	$	51,344

The following table presents cash flows of discontinued operations:

	THREE MONTHS ENDED
	November 30		November 30
	2020		2019
Cash flows used in discontinued operating activities
Net income	$	3,000	$	51,344
Change in working capital		55,667		(97,742	)
Net cash used in discontinued operating activities	$	58,667	$	(46,398	)
Net cash provided by (used in) discontinued operations		58,667		(46,398	)

The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations of the assets:

	November 30		August 31
	2020		2020
Current Assets
Accounts receivable	$	49,333	$	105,250
Total assets classified as discontinued operations in the consolidated balance sheet		49,333		105,250
Current Liabilities
Accounts payable	$	—	$	250
Total liabilities classified as discontinued operations in the consolidated balance sheet		—		250

XML

Organization, Business and Going Concern (Detail Textuals)	1 Months Ended	3 Months Ended
	Jan. 12, 2021	Nov. 30, 2020
Organization, Business And Going Concern [Abstract]
Description, Reverse stock split	1:30	1:30

XML

Basis of Consolidation (Detail Textuals)	Nov. 30, 2020
Lexaria Nicotine LLC
Equity interest percentage	83.333%
Altria Ventures Inc.
Equity interest percentage	16.667%

XML

Accounts and Other Receivables (Details) - USD ($)	Nov. 30, 2020	Aug. 31, 2020
Accounts and Financing Receivable, after Allowance for Credit Loss [Abstract]
Trade and deposits receivable	$ 3,792	$ 82,492
Intellectual Property Fees	325,304	38,250
Sales tax receivable	98,234	88,183
Accounts and other receivable	$ 427,330	$ 208,925

XML

Inventory (Details) - USD ($)	Nov. 30, 2020	Aug. 31, 2020
Inventory Disclosure [Abstract]
Raw materials	$ 53,676	$ 51,404
Work in progress	11,557	15,705
Finished goods	60,730	49,762
Inventory	$ 125,963	$ 116,871

XML

Inventory (Detail Textuals) - USD ($)	3 Months Ended	12 Months Ended
	Nov. 30, 2020	Aug. 31, 2020
Inventory Disclosure [Abstract]
Inventory write-off (Note 8)	$ 1,765	$ 8,240

XML

Intellectual Property (Details) - USD ($)		3 Months Ended	12 Months Ended
		Nov. 30, 2020	Aug. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Balance - beginning		$ 292,000	$ 265,127
Addition		5,775	33,645
Amortization	[1]	(1,717)	(6,772)
Balance - ending		$ 296,058	$ 292,000

[1] The patents are amortized over their legal life of 20 years.

XML

Intellectual Property (Detail Textuals)	3 Months Ended
	Nov. 30, 2020
Alternative Health Products [Line Items]
Useful life	20 years

XML

Property & Equipment (Details) - USD ($)	3 Months Ended
	Nov. 30, 2020	Aug. 31, 2020
Equipment	$ 649,400	$ 649,400
Less accumulated amortization	(193,951)	(166,043)
Disposal	3,094
Balance - Ending	452,355	483,357
Period Amortization
Less accumulated amortization	(31,001)	(107,906)
Leasehold improvements
Equipment	259,981	259,981
Less accumulated amortization	(100,120)	(86,610)
Disposal	0
Balance - Ending	159,861	173,371
Leasehold improvements | Period Amortization
Less accumulated amortization	(13,509)	(53,268)
Computers
Equipment	63,964	63,964
Less accumulated amortization	(36,789)	(31,869)
Disposal	0
Balance - Ending	27,175	32,095
Computers | Period Amortization
Less accumulated amortization	(4,920)	(19,681)
Furniture fixtures equipment
Equipment	34,220	34,220
Less accumulated amortization	(11,608)	(13,097)
Disposal	3,094
Balance - Ending	19,518	21,123
Furniture fixtures equipment | Period Amortization
Less accumulated amortization	(1,604)	(7,036)
Lab equipment
Equipment	291,235	291,235
Less accumulated amortization	(45,434)	(34,467)
Disposal	0
Balance - Ending	245,801	256,768
Lab equipment | Period Amortization
Less accumulated amortization	$ (10,967)	$ (27,921)

XML

Property & Equipment (Detail Textuals)	3 Months Ended
	Nov. 30, 2020 USD ($)
Proceeds from Sale of Property, Plant, and Equipment [Abstract]
Amortization cost	$ 4,790

XML

Accounts Payable and Accrued Liabilities (Details) - USD ($)	Nov. 30, 2020	Aug. 31, 2020
Accounts Payable And Accrued Liabilities[Line Items]
Balance - ending	$ 83,095	$ 86,920
Accounts Payable
Accounts Payable And Accrued Liabilities[Line Items]
Trades payable	12,659	45,080
Accrued Liabilities
Accounts Payable And Accrued Liabilities[Line Items]
Corporate tax payable	1,785	3,834
Trades payable	$ 68,651	$ 38,006

XML

Common Shares and Warrants (Details) - $ / shares	3 Months Ended
	Nov. 30, 2020	Nov. 30, 2019
Common Shares And Warrants [Roll Forward]
Number of Warrants, Balance	471,608	94,177
Weighted Average Exercise Price, Balance	$ 16.77	$ 41.40
Number of Warrants, Cancelled/Expired	(32,510)	(25,000)
Weighted Average Exercise Price, Cancelled Expired	$ 67.50	$ 44.90
Number of Warrants, Issued		402,431
Weighted Average Exercise Price, Issued		$ 12.74
Number of Warrants, Balance	439,098
Weighted Average Exercise Price, Balance	$ 14.68

XML

Common Shares and Warrants (Details 1) - $ / shares	3 Months Ended
	Nov. 30, 2020	Aug. 31, 2020	Aug. 31, 2019
Number of Warrants	439,098	471,608	94,177
Weighted Average Remaining Contractual Life	4 years 3 days
Weighted Average Exercise Price	$ 14.68
# of Warrants 3,333
Number of Warrants	3,333
Weighted Average Remaining Contractual Life	5 months 19 days
Weighted Average Exercise Price	$ 28.80
# of Warrants 8,333
Number of Warrants	8,333
Weighted Average Remaining Contractual Life	5 months 23 days
Weighted Average Exercise Price	$ 46.50
# of Warrants 25,000
Number of Warrants	25,000
Weighted Average Remaining Contractual Life	10 months 9 days
Weighted Average Exercise Price	$ 4.20
# of Warrants 291
Number of Warrants	291
Weighted Average Remaining Contractual Life	11 months 12 days
Weighted Average Exercise Price	$ 36.00
# of Warrants 7,500
Number of Warrants	7,500
Weighted Average Remaining Contractual Life	1 year 11 months 4 days
Weighted Average Exercise Price	$ 24.00
# of Warrants 51,808
Number of Warrants	51,808
Weighted Average Remaining Contractual Life	3 years 11 months 15 days
Weighted Average Exercise Price	$ 36.00
# of Warrants 8,983
Number of Warrants	8,983
Weighted Average Remaining Contractual Life	4 years
Weighted Average Exercise Price	$ 36.00
# of Warrants 16,666
Number of Warrants	16,666
Weighted Average Remaining Contractual Life	4 years 3 months 14 days
Weighted Average Exercise Price	$ 9.00
# of Warrants 267,616
Number of Warrants	267,616
Weighted Average Remaining Contractual Life	4 years 5 months 4 days
Weighted Average Exercise Price	$ 10.50
# of Warrants 49,568
Number of Warrants	49,568
Weighted Average Remaining Contractual Life	4 years 5 months 12 days
Weighted Average Exercise Price	$ 10.50

XML

Stock Options (Details) - USD ($)	3 Months Ended
	Nov. 30, 2020	Nov. 30, 2019
Options
Balance, Outstanding	171,596	166,767
Cancelled/expired	(1,333)	(149,437)
Exercised		(7,333)
Granted		161,600
Balance, Outstanding	170,263
Balance, Exercisable	146,231
Weighted Average Exercise Price
Balance, Outstanding	$ 11.17	$ 21.30
Cancelled/expired	12.90	29.51
Exercise Price		4.09
Granted		$ 11.66
Balance, Outstanding	11.16
Balance, Exercisable	$ 10.51
Weighted Average Remaining Contractual Term, Outstanding (Years)	4 years 18 days
Weighted Average Remaining Contractual Term, Exercisable (Years)	4 years 18 days
Aggregate Intrinsic Value, Outstanding	$ 30,000
Aggregate Intrinsic Value, Exercisable	$ 30,000

XML

Stock Options (Detail Textuals) - $ / shares	3 Months Ended
	Nov. 30, 2020	Nov. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price		$ 11.66
Term of expiration	5 years
2019 Equity Incentive Plan | Directors Officers Employees And Consultants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options available for grant	261,290
2014 Stock Option Plan | Directors Officers Employees And Consultants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options available for grant	62,917

XML

Revenues (Details) - USD ($)	3 Months Ended
	Nov. 30, 2020	Nov. 30, 2019
Revenue [Line Items]
Income from ongoing operations	$ 295,656	$ 10,332
income from discontinued operations	3,000	51,750
Income from ongoing and discontinued operations	298,656	62,082
Product sales
Revenue [Line Items]
Income from ongoing operations	164,990	10,015
Licensing revenue
Revenue [Line Items]
Income from ongoing operations	130,584	0
Freight revenue
Revenue [Line Items]
Income from ongoing operations	$ 82	$ 317

XML

Revenues (Detail Textuals) - USD ($)	3 Months Ended
	Nov. 30, 2020	Nov. 30, 2019
Disaggregation of Revenue [Line Items]
Income from ongoing operations	$ 295,656	$ 10,332
Net cash from discontinued operations	3,000	51,344
Intellectual Property Licensing fees
Disaggregation of Revenue [Line Items]
Income from ongoing operations	3,138	33,750
Usage Fees
Disaggregation of Revenue [Line Items]
Income from ongoing operations	127,446
Net cash from discontinued operations	$ 3,000	$ 18,000

XML

Related Party Transactions (Details) - USD ($)		3 Months Ended
		Nov. 30, 2020	Nov. 30, 2019
Related Party Transaction [Line Items]
Cash		$ 169,014	$ 168,586
Non-Cash		0	0
Management, consulting and accounting services		169,014	168,586
C.A.B Financial Services Ltd. ("CAB")
Related Party Transaction [Line Items]
Cash	[1]	67,537	65,757
Non-Cash	[1]	0	0
Management, consulting and accounting services	[1]	67,537	65,757
M&E Services Ltd. ("M&E")
Related Party Transaction [Line Items]
Cash	[1]	31,822	29,382
Non-Cash	[1]	0	0
Management, consulting and accounting services	[1]	31,822	29,382
Docherty Management Limited ("Docherty Management")
Related Party Transaction [Line Items]
Cash	[1]	52,579	56,730
Non-Cash	[1]	0	0
Management, consulting and accounting services	[1]	52,579	56,730
Directors
Related Party Transaction [Line Items]
Cash		17,076	16,717
Non-Cash		0	0
Management, consulting and accounting services		$ 17,076	$ 16,717

[1] C.A.B. Financial Services is owned by the CEO of the Company, M&E Services Ltd. is owned by the CFO of the Company, and Docherty Management Limited is owned by the President of the Company.

XML

Related Party Transactions (Detail Textuals) - USD ($)	Nov. 30, 2020	Aug. 31, 2020
Related Party Transaction [Line Items]
Due to related parties	$ 87,185	$ 58,704

XML

Segment Information (Details) - USD ($)	3 Months Ended
	Nov. 30, 2020	Nov. 30, 2019	Aug. 31, 2020
External revenue	$ 295,656	$ 10,332
CoGS	(64,478)	(7,853)
Operating expenses	(944,299)	(978,585)
Discontinued operations	3,000	51,344
Segment income(loss)	(710,121)	$ (924,762)
Total assets	2,174,320		$ 2,828,488
IP Licensing
External revenue	130,584
CoGS	0
Operating expenses	(127,868)
Discontinued operations	3,000
Segment income(loss)	5,716
Total assets	817,830
Products
External revenue	165,072
CoGS	(64,478)
Operating expenses	(92,038)
Discontinued operations	0
Segment income(loss)	8,556
Total assets	125,963
Corporate
External revenue	0
CoGS	0
Operating expenses	724,393
Discontinued operations	0
Segment income(loss)	(724,393)
Total assets	$ 1,230,527

XML

Segment Information (Details 1) - USD ($)	3 Months Ended
	Nov. 30, 2020	Aug. 31, 2020
Segment Reporting Information [Line Items]
Disposal	$ (3,094)
Net Balance	452,355	$ 483,357
US
Segment Reporting Information [Line Items]
Cost	101,144	101,144
Disposal	(3,094)
Net Balance	79,128	85,263
Canada
Segment Reporting Information [Line Items]
Cost	548,256	548,256
Net Balance	373,227	398,094
Leasehold improvements
Segment Reporting Information [Line Items]
Disposal	0
Net Balance	159,861	173,371
Leasehold improvements | US
Segment Reporting Information [Line Items]
Cost	0	0
Disposal	0
Net Balance	0	0
Leasehold improvements | Canada
Segment Reporting Information [Line Items]
Cost	259,981	259,981
Net Balance	159,861	173,371
Computers
Segment Reporting Information [Line Items]
Disposal	0
Net Balance	27,175	32,095
Computers | US
Segment Reporting Information [Line Items]
Cost	0	0
Disposal	0
Net Balance	0	0
Computers | Canada
Segment Reporting Information [Line Items]
Cost	63,964	63,964
Net Balance	27,175	32,095
Furniture fixtures equipment
Segment Reporting Information [Line Items]
Disposal	(3,094)
Net Balance	19,518	21,123
Furniture fixtures equipment | US
Segment Reporting Information [Line Items]
Cost	3,094	3,094
Disposal	(3,094)
Net Balance	0	0
Furniture fixtures equipment | Canada
Segment Reporting Information [Line Items]
Cost	31,126	31,126
Net Balance	19,518	21,123
Lab equipment
Segment Reporting Information [Line Items]
Disposal	0
Net Balance	245,801	256,768
Lab equipment | US
Segment Reporting Information [Line Items]
Cost	98,050	98,050
Disposal	0
Net Balance	79,128	85,263
Lab equipment | Canada
Segment Reporting Information [Line Items]
Cost	193,185	193,185
Net Balance	$ 166,673	$ 171,505

XML

Commitments, Significant Contracts and Contingencies Management and Service Agreements (Details)	3 Months Ended
	Nov. 30, 2020 CAD ($)
C.A.B Financial Services
Commitments Significant Contracts And Contingencies [Line Items]
Monthly Commitment	$ 29,706
Expiry Date	January 1, 2022
Docherty Management Ltd.
Commitments Significant Contracts And Contingencies [Line Items]
Monthly Commitment	$ 25,609
Expiry Date	January 1, 2022
M&E Services Ltd.
Commitments Significant Contracts And Contingencies [Line Items]
Monthly Commitment	$ 13,997
Expiry Date	June 1, 2021
Corporate development
Commitments Significant Contracts And Contingencies [Line Items]
Monthly Commitment	$ 1,500
Expiry Date	Month to Month
Office management
Commitments Significant Contracts And Contingencies [Line Items]
Monthly Commitment	$ 10,800
Expiry Date	August 15, 2022
Research & development
Commitments Significant Contracts And Contingencies [Line Items]
Monthly Commitment	$ 3,854
Expiry Date	Month to Month
Office operating lease
Commitments Significant Contracts And Contingencies [Line Items]
Monthly Commitment	$ 4,823	[1]
Expiry Date	November 15, 2023	[1]

[1] Corporate office and R&D lab space leased in Kelowna, British Columbia, Canada until November 15, 2023 with an option to extend an additional five years. In addition to minimum lease payments, the lease requires us to pay property taxes and operating costs which are subject to annual adjustments.

XML

Commitments, Significant Contracts and Contingencies Management and Service Agreements (Details 1) - USD ($)	3 Months Ended
	Nov. 30, 2020	Nov. 30, 2020	Aug. 31, 2020	Sep. 01, 2019
Right Of Use Asset [Abstract]
Balance September 01, 2020	$ 118,193	$ 118,193	$ 126,920	$ 126,920
Amortization	(8,727)
Total right of use assets	118,193
Operating Lease Liabilities [Abstract]
Balance September 01, 2020	116,664	$ 116,664		$ 125,431
Lease payments	(10,987)
Interest accretion	2,220
Total lease liabilities	116,664
Operating lease cost as at November 30, 2020	118,193
Operating cash flows for lease	$ 10,948
Remaining lease term		2 years 9 months 18 days
Discount rate		7.25%

XML

Commitments, Significant Contracts and Contingencies Management and Service Agreements (Details 2) - USD ($)	Nov. 30, 2020	Aug. 31, 2020	Sep. 01, 2019
Commitments and Contingencies Disclosure [Abstract]
2021	$ 32,746
2022	44,815
2023	44,815
2024	7,469
Thereafter	0
Total lease payments	129,845
Less: imputed interest	(13,181)
Present value of operating lease liabilities	116,664		$ 125,431
Less: current obligations under leases	(36,695)	$ (36,038)
Total	$ 79,969	$ 89,393

XML

Prepaid Expenses (Details) - USD ($)	Nov. 30, 2020	Aug. 31, 2020
Prepaid Expense, Current [Abstract]
Advertising & Conferences	$ 21,539	$ 21,878
Legal fees	130	47,498
Licence, filing fees, dues	30,138	8,541
Office & Insurance	58,823	78,792
Research & Development	25,386	25,386
Prepaid expenses	$ 136,016	$ 182,095

XML

Loan Payable (Detail Textuals) - Loans payable	3 Months Ended
	Nov. 30, 2020 CAD ($)
Canadian dollar loan
Debt Instrument [Line Items]
Long-term Debt	$ 40,000
Interest rate	0.00%
Percentage of debt forgiveness	25.00%
Maximum amount of loan forgiveness	$ 10,000
3-year term loan
Debt Instrument [Line Items]
Interest rate	5.00%

XML

Marketable Securities (Details) - USD ($)	3 Months Ended	12 Months Ended
	Nov. 30, 2020	Aug. 31, 2020
Marketable Securities [Line Items]
Cost Basis	$ 56,250	$ 56,250
Unrealized Gains	34,407	9,997
Unrealized Losses	(46,926)	(46,926)
Total	43,731	19,321
Common stock
Marketable Securities [Line Items]
Cost Basis	56,250	56,250
Unrealized Gains	(24,410)	9,997
Unrealized Losses	$ 0	$ (38,584)

XML

Discontinued Operations (Details) - USD ($)	3 Months Ended
	Nov. 30, 2020	Nov. 30, 2019
Discontinued Operations And Disposal Groups Abstract
Revenue	$ 3,000	$ 51,750
Operating Expenses	0	406
Net Income	$ 3,000	$ 51,344

XML

Discontinued Operations (Details 1) - USD ($)	3 Months Ended
	Nov. 30, 2020	Nov. 30, 2019
Cash flows used in discontinued operating activities
Net income	$ 3,000	$ 51,344
Change in working capital	55,667	(97,742)
Net cash used in discontinued operating activities	58,667	(46,398)
Net cash provided by (used in) discontinued operations	$ 58,667	$ (46,398)

XML

Discontinued Operations (Details 2) - USD ($)	Nov. 30, 2020	Aug. 31, 2020
Current Assets
Accounts receivable	$ 49,333	$ 105,250
Total assets classified as discontinued operations in the consolidated balance sheet	49,333	105,250
Current Liabilities
Accounts payable	0	250
Total liabilities classified as discontinued operations in the consolidated balance sheet	$ 0	$ 250

XML

Discontinued Operations (Detail Textuals)	1 Months Ended
	Nov. 19, 2020 CAD ($)
Lexaria Canpharm ULC
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gross proceeds from sale non-core business assets	$ 3,850,000

XML

Subsequent Events (Detail Textuals)		1 Months Ended		3 Months Ended
	Dec. 09, 2020 CAD ($) $ / shares shares	Jan. 14, 2021 USD ($) $ / shares shares	Jan. 12, 2021 shares	Nov. 30, 2020 $ / shares shares	Aug. 31, 2020 USD ($) shares	May 31, 2020 USD ($)	Nov. 30, 2019 USD ($)	Jan. 11, 2021 shares
Subsequent Event [Line Items]
Description, Reverse stock split			1:30	1:30
Common Stock, Shares, Issued | shares				3,001,476	3,001,476
Common Stock, Shares, Outstanding | shares				3,001,476	3,001,476
Value of common stock shares issued					$ (65,600)	$ 1,887,606	$ 816,020
Exercise price of warrants | $ / shares				$ 14.68
Subsequent Events
Subsequent Event [Line Items]
Common Stock, Shares, Issued | shares			3,001,476					90,044,312
Common Stock, Shares, Outstanding | shares			3,001,476					90,044,312
Subsequent Events | Underwritten public offering
Subsequent Event [Line Items]
Value of common stock shares issued		$ 11,039,994
Number of common shares issued | shares		2,102,856
Description of units issued under underwritten public offering		units consisting of one common share and one warrant
Shares issued price per share | $ / shares		$ 5.25
Underwritten public offering fees		$ 1,410,506
Subsequent Events | Hill Street Beverage Company Inc
Subsequent Event [Line Items]
Proceeds from Divestiture of Businesses	$ 350,000
Restricted common shares received from sale of assets | shares	6,031,363
Deemed price per share | $ / shares	$ 0.0829
10% Promissory note received	$ 2,000,000
Interest rate on promissory note	10.00%
Subsequent Events | Hill Street Beverage Company Inc | Sixteen months
Subsequent Event [Line Items]
Value of common shares received from sale of assets	$ 1,000,000
Subsequent Events | Hill Street Beverage Company Inc | Eight months
Subsequent Event [Line Items]
Value of common shares received from sale of assets	$ 500,000