10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q 

(Mark One)

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

For the quarterly period ended November 30, 2022

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: 1.250.765.6424

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

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

           5,950,998 common shares as of January 17, 2023                  

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	17
Item 3.	Controls and Procedures	25
PART II—OTHER INFORMATION		26
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Exhibits	26

Page 2 of 28

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

LEXARIA BIOSCIENCE CORP.
CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. Dollars)
	November 30,			August 31,
	2022			2022
ASSETS	(Unaudited)			(Audited)
Current
Cash	$	4,533,063		$	5,813,218
Marketable securities		269,707			347,335
Accounts receivable		286,322			201,784
Inventory		9,936			38,418
Prepaid expenses and deposit		260,342			576,761
Total Current Assets		5,359,370			6,977,516
Non-current assets, net
Right of use assets		42,340			52,444
Intellectual property		500,549			488,462
Property & equipment		311,221			315,505
Total Non-current Assets		854,110			856,411
TOTAL ASSETS	$	6,213,480		$	7,833,927
LIABILITIES
Current
Accounts payable and accrued liabilities	$	241,891		$	151,449
Lease payable		39,629			42,587
Total Current Liabilities		281,520			194,036
Long Term
Lease payable		-			7,401
Total Long Term Liabilities		-			7,401
TOTAL LIABILITIES		281,520			201,437
STOCKHOLDERS' EQUITY
Share Capital
Authorized:
220,000,000 common voting shares with a par value of $0.001 per share Issued and outstanding: 5,950,998 common shares at November 30, 2022 and at August 31, 2022		5,951			5,951
Additional paid-in capital		47,110,257			47,041,481
Deficit		(40,854,472	)		(39,098,528	)
Equity attributable to shareholders of the Company		6,261,736			7,948,904
Non-controlling Interest		(329,776	)		(316,414	)
Total Stockholders' Equity		5,931,960			7,632,490
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	6,213,480		$	7,833,927

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

Page 3 of 28

LEXARIA BIOSCIENCE CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in U.S. Dollars, except number of shares)
	THREE MONTHS ENDED
	November 30,
	2022			2021
	(Unaudited)
Revenue	$	101,476		$	13,880
Cost of Goods Sold		15,795			5,570
Gross profit		85,681			8,310
Expenses
Research and development		829,489			458,709
Office and administration		1,025,498			1,553,083
		1,854,987			2,011,792
Net loss		(1,769,306	)		(2,003,482	)
Net loss for the period	$	(1,769,306	)	$	(2,003,482	)
Net loss attributable to:
Common shareholders	$	(1,755,944	)	$	(1,993,157	)
Non-controlling interest	$	(13,362	)	$	(10,325	)
Basic and diluted loss per share	$	(0.30	)	$	(0.35	)
Weighted average number of common shares outstanding
Basic and diluted		5,950,998			5,726,699

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

Page 4 of 28

LEXARIA BIOSCIENCE CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. Dollars)
	THREE MONTHS ENDED
	November 30,
	2022			2021
	(Unaudited)
Cash flows used in operating activities
Net loss	$	(1,769,306	)	$	(2,003,482	)
Adjustments to reconcile net loss to
net cash used in operating activities:
Stock based compensation		68,776			408,544
Depreciation and amortization		24,730			27,930
Noncash right-of-use lease expense		10,104			9,385
Unrealized loss on marketable securities		77,628			340,417
Unrealized foreign exchange		-			(109	)
Lease accretion		845			1,562
Change in operating assets and liabilities
Accounts receivable		(84,538	)		(119,111	)
Inventory		30,791			2,914
Prepaid expenses and deposits		316,419			82,030
Accounts payable and accrued liabilities		90,442			88,819
Due to related parties		-			(5,223	)
Net cash used in by operating activities	$	(1,234,109	)	$	(1,166,324	)
Cash flows used in investing activities
Purchase of equipment		(20,500	)		(42,375	)
Intellectual property		(14,342	)		(15,840	)
Net cash used in investing activities	$	(34,842	)	$	(58,215	)
Cash flows from financing activities
Lease Payments		(11,204	)		(10,987	)
Net cash used in financing activities	$	(11,204	)	$	(10,987	)
Net change in cash for the period		(1,280,155	)		(1,235,526	)
Cash at beginning of period		5,813,218			10,917,797
Cash at end of period	$	4,533,063		$	9,682,271
Supplemental information of cash flows:
Income taxes paid in cash	$	-		$	-

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

Page 5 of 28

LEXARIA BIOSCIENCE CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Expressed in U.S. Dollars)

					ADDITIONAL								TOTAL
	COMMON STOCK				PAID-IN								STOCKHOLDERS'
	SHARES		AMOUNT		CAPITAL		DEFICIT			NCI			EQUITY
			$		$		$			$			$
Balance August 31, 2021		5,726,699		5,727		45,089,114		(31,829,204	)		(202,085	)		13,063,552
Stock based compensation		-		-		408,544		-			-			408,544
Net loss		-		-		-		(1,993,157	)		-			(1,993,157	)
Non-controlling interest		-		-		-		-			(10,325	)		(10,325	)
Balance November 30, 2021		5,726,699		5,727		45,497,658		(33,822,361	)		(212,410	)		11,468,614
Balance August 31, 2022		5,950,998		5,951		47,041,481		(39,098,528	)		(316,414	)		7,632,490
Stock based compensation		-		-		68,776		-			-			68,776
Net loss		-		-		-		(1,755,944	)		-			(1,755,944	)
Non-controlling interest		-		-		-		-			(13,362	)		(13,362	)
Balance November 30, 2022		5,950,998		5,951		47,110,257		(40,854,472	)		(329,776	)		5,931,960
The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Page 6 of 28

LEXARIA BIOSCIENCE CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

November 30, 2022

(Expressed in U.S. Dollars)

1. Nature of Business

Lexaria Bioscience Corp. (“Lexaria”, “we”, “our” or the “Company”) is a biotechnology company pursuing the enhancement of the bioavailability of a diverse and broad range of active pharmaceutical ingredients (“API”) using our proprietary DehydraTECH drug delivery technology.

Revenues are generated from licensing contracts for the Company’s patented DehydraTECH technology based on the terms of use and defined geographic and licensing arrangements. We derive income from our third party contracted manufacturing of B2B DehydraTECH enhanced products made to customer specifications that are sold online and in-store in the US and Canada. We also perform contract services in R&D for customer specific formulations that are used in comparison testing to customers’ existing products.

Going Concern Consideration

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

Since inception, the Company has incurred significant operating and net losses. The losses attributable to shareholders were $7.4m, $4.2m and $4.1m for the years ended August 31, 2022, 2021 and 2020, respectively. As of November 30, 2022, we had an accumulated deficit of $40.9m. We expect to continue to incur significant operational expenses and net losses in the upcoming 12 months. Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the stage and complexity of our R&D studies and corporate expenditures, additional revenues received from the licensing of our technology, if any, and the receipt of payments under any current or future collaborations we may enter into. The recurring losses from operations and negative cash flows from operations raise substantial doubt about the Company’s ability to continue as a going concern.

As of November 30, 2022, the Company had cash of approximately $4.5m and carries no significant debt other than amounts payable in the short term.

Also, on August 12, 2022, we entered into a sales agreement with Maxim Group LLC, (“Maxim”), pursuant to which we may offer and sell shares of our common stock with an aggregate offering price of up to $5,925,000 under the At-The-Market (“ATM”) Offering. The sales agreement provides that Maxim will be entitled to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the ATM Offering. As of January 17, 2023 we have not sold any shares under the ATM Offering.

Based on our existing working capital and access to an ATM offering, as disclosed above management believes the Company has sufficient working capital to satisfy the Company’s estimated liquidity needs for the next 12 months. Because of the above factors, the Company believes that this alleviates the substantial doubt in connection with the Company's ability to continue as a going concern. However, there is no assurance that management’s plans will be successful due to the current economic climate in the United States and globally.

Page 7 of 28

Impacts of COVID-19 Pandemic

The emergence of the COVID-19 pandemic in 2020 continues to present uncertainty and unforecastable new risks to the Company and its business plans. As of November 30, 2022, there has been no material impact on the Company’s financial position as a direct result of the pandemic. However, the Company has experienced some supply chain disruptions and shortages in the timely procurement of ingredients and supplies used in both our R&D activities and B2B production. Management views this situation as transitory but cannot predict the length of time it may take for these disruptions to dissipate or if there will be a significant economic effect on the Company’s operations. In the interim, it may cause delays in carrying out our research studies and in our production schedules.

There may be further actions we must take that alter our operations, including those that may be required by federal, state, provincial, or local authorities, or that we determine are in the best interests of our employees and other third parties with which we do business. We do not know when it will become practical to relax or eliminate some or all these measures entirely. The economic effect of a prolonged pandemic is difficult to predict and could result in material financial impact in the Company’s future reporting periods.

2. Significant Accounting Policies

The significant accounting policies of the Company are consistent with those of our audited financial statements on Form 10-K for the year ended August 31, 2022.

3. Basis of Consolidation

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

4. Basis of Presentation

The Company’s unaudited interim consolidated financial statements 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 or any subsequent period.

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, 2022.

Page 8 of 28

5. Recent Accounting Guidance

Pronouncements Issued but Not Yet Adopted

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

6. 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. Although we believe that these estimates are reasonable actual results could differ.

In preparing these unaudited interim consolidated financial statements, the significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those applied to the audited consolidated financial statements for the year ended August 31, 2022.

Page 9 of 28

7. Marketable Securities

The components of Marketable Securities were as follows:

	Cost Basis $		Unrealized Gains $		Unrealized Losses $			Fair Value $
August 31, 2021		1,037,025		16,243		(219,427	)		833,841
Common stock		278,107		118,196		(882,809	)		(486,506	)
August 31, 2022		1,315,132		134,439		(1,102,236	)		347,335
Common stock		-		-		(77,628	)		(77,628	)
November 30, 2022		1,315,132		134,439		(1,179,864	)		269,707

Marketable securities represented the common shares of Hill Street Beverage Company Inc. held by Lexaria. Unrealized losses from common stock are due to market price movements. In management’s opinion based on the evaluation of available information at the quarter ended November 30, 2022, unrealized losses represent temporary impairments.

8. Accounts Receivables

Accounts receivable at November 30, 2022 and August 31, 2022 consist of the following:

	November 30,		August 31,
	2022		2022
	$		$
Trade and deposits		137,041		80,374
Territory license fees		100,683		37,248
Sales tax		48,598		84,162
		286,322		201,784

9. Inventory

Inventory at November 30, 2022 and August 31, 2022 consist of the following:

	November 30,		August 31,
	2022		2022
	$		$
Raw materials		9,936		38,418

During the three month period ended November 30, 2022, inventory valued at $25,243 was expensed to research and development.

Page 10 of 28

10. Prepaid Expenses and Deposits

Prepaid expenses consist of the following at November 30, 2022, and August 31, 2022:

	November 30,		August 31,
	2022		2022
	$		$
Advertising & conferences		74,656		359,863
Legal fees		25,000		25,000
License, filing fees, dues		3,750		15,000
Office & insurance		60,901		80,863
Capital financing		96,035		96,035
		260,342		576,761

11. Intellectual Property, net

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

Issued Patent #	Patent Certificate Grant Date	Patent Family
US 9,474,725 B1	10/25/2016	Food and Beverage Compositions Infused With Lipophilic Active Agents and Methods of Use Thereof
US 9,839,612 B2	12/12/2017
US 9,972,680 B2	05/15/2018
US 9,974,739 B2	05/22/2018
US 10,084,044 B2	09/25/2018
US 10,103,225 B2	10/16/2018
US 10,381,440	08/13/2019
US 10,374,036	08/06/2019
US 10,756,180	08/25/2020
US 11,311,559	04/26/2022	Compositions and Methods for Enhanced Delivery of Antiviral Agents

A continuity schedule for capitalized patents is presented below:

	November 30,			August 31,
	2022			2022
	$			$
Balance – beginning		488,462			364,623
Addition		14,342			131,448
Amortization		(2,255	)		(7,609	)
Balance – ending		500,549			488,462
Patents are amortized over their 20 year legal life.

Page 11 of 28

12. Property & Equipment, net

Three Months Ended November 30, 2022	Cost		Period Amortization			Additions		Accumulated Amortization			Net Balance November 30, 2022
	$		$			$		$			$
Leasehold improvements		259,981		(13,509	)		-		(208,195	)		51,786
Computers		70,781		(1,183	)		-		(62,607	)		8,174
Furniture fixtures & equipment		31,126		(1,604	)		-		(24,442	)		6,684
Lab equipment		333,675		(8,616	)		20,500		(109,598	)		244,577
		695,563		(24,912	)		20,500		(404,842	)		311,221

Year Ended August 31, 2022	Cost		Period Amortization			Disposal		Accumulated Amortization			Net Balance August 31, 2022
	$		$			$		$			$
Leasehold improvements		259,981		(54,037	)		-		(194,685	)		65,296
Computers		63,964		(9,874	)		6,817		(61,424	)		9,357
Furniture fixtures & equipment		31,126		(6,417	)		-		(22,837	)		8,288
Lab equipment		291,235		(31,572	)		42,375		(101,047	)		232,564
		646,306		(101,900	)		49,192		(379,993	)		315,505

During the three-month period ended November 30, 2022, $2,438 of depreciation was included in cost of goods sold.

13. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities at November 30, 2022 and August 31, 2022 consist of the following:

	November 30,		August 31,
	2022		2022
	$		$
Accounts Payable
Trades payable		173,678		57,150
Sales tax payable		11,011		31,303
Accrued Liabilities
Trades payable		57,202		62,996
Balance		241,891		151,449

Page 12 of 28

14. Revenues

A breakdown of our revenues by type for the three months ended November 30, 2022 and 2021 are as follows:

Three Months Ended	November 30,  2022		November 30,  2021
	$		$
B2B sales		29,100		7,000
Licensing		63,435		-
Other		8,941		6,880
Total		101,476		13,880

During the period ended November 30, 2022, the Company recognized B2B product revenues of $29,100 (2021 - $7,000) that relate to sales of our intermediate products for use by B2B customers in their products. Licensing revenue consist of IP licensing fees for transfer of the DehydraTECH technology in line with definitive agreements and also includes royalty fees. The Company recognized $63,435 (2021 - $Nil) in licensing revenue in the same period.

15. Common Shares and Warrants

The fair value of share purchase warrants granted was estimated as of the date of the grant by using the Black-Scholes option pricing model. During the quarter ended November 30, 2022, the Company issued no warrants.

A continuity schedule for warrants is presented below:

	Number of Warrants			Weighted Average Exercise Price $
Balance August 31, 2022		2,421,983			8.04
Cancelled/expired		(7,500	)		24.00
Balance November 30, 2022		2,414,483			7.99

A summary of warrants outstanding as of November 30, 2022, is presented below:

# of Warrants		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price $
	60,798	1.96-2.00 years		36.00
	317,190	2.43 years		10.50
	116,667	1.38-2.29 years		9.00
	200,000	1.38 years		7.00
	1,719,828	3.13 years		6.58
	2,414,483	2.78 years		7.99

Page 13 of 28

16. Stock Options

The Company has established the Equity Incentive Plan whereby the board of directors may, from time to time, grant up to 510,433 stock options to directors, officers, employees, and consultants. Stock options granted must be exercised within five years from the date of grant or such lesser period as determined by the Company’s board of directors. The exercise price of an option is equal to or greater than the closing market price of the Company’s common shares on the day preceding the date of grant. The vesting terms of each grant are set by the board of directors.

The Company granted the following options during the quarter ended November 30, 2022:

Quantity		Exercise Price $		Life (Years)
	3,400		3.04		5
	41,200		1.96		5
	44,600		2.04		5

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, 2021		206,170			8.90
Cancelled/expired		(3,334	)		9.60
Granted		222,000			4.21
Balance August 31, 2022		424,836			6.45		3.69	5,175
Granted		44,600			2.04
Balance November 30, 2022 (granted)		469,436			5.35		3.91		46,375
Balance November 30, 2022 (exercisable)		441,963			5.41		3.90		41,200

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

	November 30, 2022
Expected volatility	99%-105		%
Risk-free interest rate	3.30-4.12		%
Expected life	5 years
Dividend yield		0	%
Estimated fair value per option	$1.60 - $2.58

Page 14 of 28

17. Commitments, Significant Contracts and Contingencies

Right of Use Assets - Operating Lease

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

	November 30, 2022			August 31, 2022
	$			$
Right of use assets - operating leases		52,444			91,041
Amortization		(10,104	)		(38,597	)
Total lease assets		42,340			52,444
Liabilities:		49,989			89,393
Lease payments		(11,204	)		(44,600	)
Interest accretion		844			5,195
Total lease liabilities		39,629			49,988
Operating lease cost		52,444			52,444
Operating cash flows for lease		11,204			44,599
Remaining lease term	0.9 Years			1.17 Years
Discount rate		7.25	%		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, 2022:

Fiscal 2023	33,611
Fiscal 2024	7,470
Thereafter	-
Total lease payments	41,081
Less: imputed interest	(1,452	)
Present value of operating lease liabilities	39,629
Less: current obligations under leases	(39,629	)
Total	-

18. 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.

Page 15 of 28

Three Months Ended November 30, 2022	IP Licensing $			B2B $			Corporate $			Consolidated Total $
Revenue		63,435			29,100			8,941			101,476
Cost of goods sold		-			(15,795	)		-			(15,795	)
Operating expenses		(707,034	)		(10,992	)		(1,136,961	)		(1,854,987	)
Segment income (loss)		(643,599	)		2,313			(1,128,020	)		(1,769,306	)
Total assets		118,096			75,723			6,019,661			6,213,480

Three Months Ended November 30, 2021	IP Licensing $			Products $			Corporate $			Consolidated Total $
External revenue		-			7,000			6,880			13,880
Cost of goods sold		-			(5,570	)		-			(5,570	)
Operating expenses		(837,750	)		(77,002	)		(1,097,040	)		(2,011,792	)
Segment loss		(837,750	)		(75,572	)		(1,090,160	)		(2,003,482	)
Total assets		724,665			116,060			10,905,217			11,745,942

Capital Asset by Region	Cost US		Addition US		Net Balance US		Cost Canada		Net Balance Canada		Total Net Balance
Three Months Ended November 30, 2022	$		$		$		$		$		$
Leasehold Improvements		-		-		-		259,981		51,786		51,786
Computers		-		-		-		70,781		8,174		8,174
Furniture & Fixtures		-		-		-		31,126		6,684		6,684
Lab Equipment		140,487		20,500		116,553		193,185		128,024		244,577
		140,487		20,500		116,553		555,073		194,668		311,221

Capital Asset by Region	Cost US		Addition US		Net Balance US		Cost Canada		Addition Canada		Net Balance Canada		Total Net Balance
Year Ended August 31, 2022	$		$		$		$		$		$		$
Leasehold Improvements		-		-		-		259,981		-		65,296		65,296
Computers		-		-		-		63,964		6,817		9,357		9,357
Furniture & Fixtures		-		-		-		31,126		-		8,288		8,288
Lab Equipment		98,050		42,375		100,031		193,185		-		132,533		232,564
		98,050		42,375		100,031		548,256		6,817		215,474		315,505

Page 16 of 28

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 November 25, 2022, 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 US$. All references to “C$” 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 the Company and/or our subsidiaries, unless otherwise indicated.

The following discussion should be read in conjunction with our condensed financial statements and accompanying notes in this quarterly report on Form 10-Q, and our audited financial statements with notes in our annual report on Form 10-K for the year ended August 31, 2022.

Overview

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

Page 17 of 28

Lexaria is advancing several R&D activities in both preclinical and future clinical programs. Our primary focus during the current year is on our investigations of CBD for the reduction of hypertension. In fiscal 2022 we completed three human studies on hypertension with the results of our fourth and largest hypertension study to date continuing to be released throughout fiscal 2023. Preliminary results announced in October 2022

The FDA provided us with a positive written response from our pre-IND meeting regarding DehydraTECH-CBD for the treatment of hypertension. The FDA confirmed that it has agreed with Lexaria’s proposal to pursue a 505(b)(2) new drug application (“NDA”) regulatory pathway for our program. We continue working toward our IND filing which is anticipated to be in late fiscal 2023 or early 2024. During the year ended August 31, 2022, we also completed studies in NSAIDS, THC, PDE5s and nicotine.

The Company continues to engage in small R&D projects and B2B formulation for third parties who are evaluating our technology for use in their product. 

Patents

Our current patent portfolio includes patent family applications or grants pertaining to our method of improving bioavailability and taste, and the use of DehydraTECH as a delivery platform for a wide variety of Active Pharmaceutical Ingredients (“APIs”) including, but not limited to, fat soluble vitamins; anti-viral drugs; phosphodiesterase inhibitors; human hormones; regulated cannabinoids, and nicotine and its analogs.

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

The Company has patents issued in the United States, Australia, Europe, India, Mexico, and Japan.  On December 29, 2022, Lexaria was granted its first patent in Canada, marking our 28^th patent to date as listed below:

Issued Patent #	Patent Family
US 9,474,725 B1	#1 Food and Beverage Compositions Infused With Lipophilic Active Agents and Methods of Use Thereof
US 9,839,612 B2
US 9,972,680 B2
US 9,974,739 B2
US 10,084,044 B2
US 10,103,225 B2
US 10,381,440
US 10,374,036
US 10,756,180
AU 2015274698
AU 2017203054
AU 2018202562
AU 2018202583
AU 2018202584
AU 2018220067
EP 3164141
JP 6920197
AU 2016367036	#2 Methods for Formulating Orally Ingestible Compositions Comprising Lipophilic Active Agents
JP 6963507
MX 388 203 B
AU 2016367037	#3 Stable Ready-to-Drink Beverage Compositions Comprising Lipophilic Active Agents
IN 365864
JP 6917310
MX 390001
CDN 3093414	#6 Transdermal and/or Dermal Delivery of Lipophilic Active Agents
JP 7112510	#7 Lipophilic Active Agent Infused Compositions with Reduced Food Effect
AU 2019256805	#8 Compositions Infused with Nicotine Compounds and Methods of Use Thereof
US 11,311,559	#18 Compositions and Methods for Enhanced Delivery of Antiviral Agents

Page 18 of 28

Research & Development

Lexaria is advancing several R&D activities in both preclinical and clinical programs. Currently, our primary research program is the investigation of cannabidiol (CBD) for the reduction of hypertension. Other programs include nicotine for oral pouches and nicotine replacement therapy, hormones, diabetes, dementia and others. From time to time the Company will engage in contract R&D for third parties who are interested in evaluating DehydraTECH in their products.

The FDA has provided a written response from our pre-IND meeting regarding DehydraTECH-CBD for the treatment of hypertension and has agreed with Lexaria’s proposal to pursue a 505(b)(2) new drug application (“NDA”) regulatory pathway for our program. We continue working toward our IND filing which is anticipated to be in late fiscal 2023 or early 2024.

During the quarter ended November 30, 2022, Lexaria incurred $829,489 (Nov 2021- $458,709) in R&D expenditures. Specific R&D programs are in ongoing development and align to our financial ability to undertake each research phase for each API. Due to our expanding portfolio coverage, we continually examine accelerated timetable options for testing, research, and development of each API. Fiscal 2023 continues to highlight the direction of our research and development programs with confirmatory results from our ongoing programs. We continue to  devote an increasing proportion of our resources and focus towards pharmaceutical applications.

The first results of our hypertension study HYPER-H21-4 were announced on October 27, 2022, with the primary safety and efficacy objectives being met. The study showed, among other things, a sustained drop in blood pressure in normally active hypertensive patients following multiple weeks of oral cannabidiol ("CBD") therapy, using Lexaria's patented DehydraTECH-CBD capsule formulation.

On December 21, further results were released from our multi-week human clinical hypertension study HYPER-H21-4, indicating superior cannabidiol ("CBD") blood absorption levels from our patented DehydraTECH-CBD™ relative to those of published, pharmaceutical-grade CBD industry comparators.

On November 1, 2022, the Company announced that independent review board ("IRB") approval has now been received for human clinical nicotine study NIC-H22-1. The study is a 36-person human pharmacokinetic ("pk") randomized, double blinded, cross-over study conducted in current cigarette smokers, wherein each person will visit the laboratory to be dosed three times over a period of weeks. During each visit only one oral nicotine pouch will be administered and evaluated: either DehydraTECH-nicotine; On!™ brand manufactured by Altria™; or Zyn™ brand manufactured by Swedish Match™. The study had earlier faced certain time extensions due to manufacturing and logistics, those issues have since been resolved. Initial dosing began on December 20, 2022.

Page 19 of 28

On November 8 and 10, 2022 commencement of animal study programs DIAB-A22-1 and DEM-A22-1 were announced, designed to determine whether DehydraTECH-CBD may offer therapeutic utility against diabetes and dementia respectively.   

On November 29, 2022 results from our animal study EPIL-A21-1 were released.  Study EPIL-A21-1 was designed to determine whether DehydraTECH-CBD could provide similar seizure inhibiting efficacy, using an established, vehicle-controlled, acute animal seizure model induced by electrical stimulation, at lower doses than were required with Epidiolex®. The study successfully demonstrated performance enhancements compared to Epidiolex as one of the world's leading anti-seizure medications. Epidiolex is currently the world's only commercially approved, CBD-powered anti-seizure drug.

Impact of COVID-19

The COVID-19 pandemic continues to present uncertainty and unforecastable new risks to the Company and its’ business plan.  To date, we have not experienced a material impact on our financial statements, impairments of any of our assets or any major business disruptions, including with our vendors.

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

We will continue to actively monitor the rapidly evolving situation related to COVID-19 and may take further actions that alter our operations, including those that may be required by federal, state, provincial, or local authorities, or that we determine are in the best interests of our employees and other third parties with whom we do business. We do not know when, or if, it will become practical to relax or eliminate some or all these measures entirely.

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. These accounting principles require management to make certain estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses during the periods reported. Based on information available to management at the time, these estimates, judgments and assumptions are considered reasonable. We believe that understanding the basis and nature of the estimates, judgments and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financials.  For a discussion of our critical accounting estimates, please read Note 4. Estimates and Judgements as found in the financial statements in our Annual Report on Form 10-K for the year ended August 31, 2022.  There have been no material changes to the critical accounting estimates as previously disclosed in our 2022 10-K.

Page 20 of 28

Capital Assets

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

Patents

Capitalized patent costs represent legal costs incurred to establish US patents. All other patent costs are expensed as incurred. When US patents reach a mature stage, any associated legal costs are typically maintenance fees and therefore expensed as incurred. Capitalized patent costs are amortized on a straight-line basis over the remaining life of the patent. In the period ended November 30, 2022, the Company recognized $2,255 in amortization attributable to capitalized patents.

Revenue Recognition

Licensing revenue from intellectual property

Our revenues from licenses that grant the right to access our intellectual property, which we consider symbolic licenses of IP, are recognized over time following the transfer and use of our patented infusion technology DehydraTECH . Royalty revenues are recognized in the period in which our licensees sell the related products, which in certain cases may require us to estimate our royalty revenue.

Usage fees from intellectual property

We recognize usage fees from B2B clients in the period in which the counterparty completes the manufacturing of products which incorporate DehydraTECH enabled APIs. We generally recognize revenue when we have satisfied all contractual obligations and are reasonably assured of collecting the resulting receivable. We are often entitled to bill our customers and receive payment from our customers in advance of recognizing the revenue.

Product revenue

We generally recognize revenue when we have satisfied all contractual obligations and are reasonably assured of collecting the resulting receivable. We are often entitled to bill our customers and receive payment from our customers in advance of recognizing the revenue.

Cost of sales

Cost of sales includes all expenditures incurred in bringing the goods to the point of sale This includes third-party manufacturing and handling costs, direct costs of the raw material, inbound freight charges, warehousing costs, and applicable overhead expenses.

Funding Requirements

We anticipate that our expenditures will increase in connection with our ongoing R&D program, specifically with respect to our animal and human clinical trials of our DehydraTECH formulations for the purposes of treating hypertension, dementia and diabetes.  As we move forward with our Investigational New Drug application with the FDA, we anticipate that our expenditures will further increase and accordingly, we expect to incur increased operating losses and negative cash flows for the foreseeable future.

Page 21 of 28

Through November 30, 2022, we have funded our operations primarily with proceeds from the sale of our common stock.  The Company has consistently incurred recurring losses and negative cash flows from operations, including net losses of $1,769,306 and $2,003,482 for the three months ended November 30, 2022 and 2021, respectively. 

The continuation of Lexaria as a going concern depends on raising additional capital and/or attaining and maintaining profitable operations. The accompanying financial statements do not include any adjustment relating to the recovery and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should our Company discontinue operations.  The recurring losses from operations and net negative cash flows from operation raise substantial doubt about the Company’s ability to continue as a going concern.. As of the issuance date of these consolidated interim financial statements, we expect our positive working capital of approximately $5.07m as at November 30, 2022 will be sufficient to fund our operating expenses and capital expenditure requirements through the forthcoming 12 months from the issuance date of this report.

On August 12, 2022, we entered into a sales agreement with Maxim Group LLC, (“Maxim”), pursuant to which we may offer and sell shares of our common stock with an aggregate offering price of up to $5,925,000 under the At-The-Market (“ATM”) Offering. The sales agreement provides that Maxim will be entitled to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the ATM Offering. As of January 17, 2023 we have not sold any shares under the ATM Offering.

Based on our existing working capital and access to an ATM offering, as disclosed above, management’s plans to improve cash flows, as disclosed above management believes the Company has sufficient working capital to satisfy the Company’s estimated liquidity needs for the next 12 months. Because of the above factors, the Company believes that this alleviates the substantial doubt in connection with the Company’s ability to continue as a going concern. However, there is no assurance that management’s plans will be successful due to the current economic climate in the United States and globally.

Results of Operations for our Period Ended November 30, 2022, and 2021

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

Three Months Ended	November 30,			November 30,
	2022			2021			Change
	$			$			$
Revenue		101,476			13,880			87,596
Research and development		829,489			458,709			370,780
Consulting fees & salaries		321,074			738,111			(417,037	)
Legal and professional		94,482			141,607			(47,125	)
Other general and administrative		609,942			673,365			(63,423	)
Net Loss		(1,769,306	)		(2,003,482	)		(234,176	)

Revenue

Fees from intellectual property licencing increased by $63k and B2B sales increased by $22k with other sales marginally higher by $2k year-over year.

Page 22 of 28

Research and Development

Expenditures on R&D increased by $371k year-over year for the period ended November 30, 2022, as the company continued with applied research and development programs in our pharmaceutical division with our primary focus being on DehydraTECH-CBD to treat hypertension.

General and Administrative

Our other general and administrative expenses decreased overall by $63k during the period ended November 30, 2022, over the same period last year.  Advertising and promotion were up by $210k in the quarter with slight increases in investor relations and office expense. Unrealized losses on marketable securities were less in the current year ($78k vs $340k).  Non-cash stock-based compensation on options granted and vested ($69k vs $121k).

Consulting Fees and Salaries

Consulting fees and salaries decreased by $417k primarily due to the prior years recognition of stock-based compensation costs in the quarter ended November 30, 2021 and recognition of contractors and salaries as R&D expenses.  

Legal and Professional Fees

Our professional fees decreased by $47k during the period compared to the same prior year period. Previous year expenditures were higher due to increased patent and trademark filings, higher accounting fees and the utilization of additional advisory services.

Liquidity and Financial Condition

Working Capital	November 30,			August 31,
	2022			2022
	$			$
Current assets		5,359,370			6,977,516
Current liabilities		(281,520	)		(194,036	)
Net Working Capital		5,077,850			6,783,480

Cash Flows	November 30,
	2022			2021
	$			$
Cash flows used in operating activities		(1,234,109	)		(1,166,324	)
Cash flows used in investing activities		(34,842	)		(58,215	)
Cash flows used in financing activities		(11,204	)		(10,987	)
Decrease in cash		(1,280,155	)		(1,235,526	)

Operating Activities

Net cash used in operating activities increased by $68k for the period compared with cash used in operating during the same period in 2021. This difference was largely due to decreased stock-based compensation ($69k vs $409k) unrealized losses on marketable securities ($78k vs $340k) and a reduction in prepaid expense balance in the quarter of $316k vs $82k in the prior year.

Page 23 of 28

Investing Activities

Net cash from investing activities decreased by $23k over 2022 due to decreased spending on acquisitions of equipment. 

Financing Activities

The change in net cash provided from financing activities was immaterial.

Liquidity and Capital Resources

We have incurred net losses of approximately $7.4m and $4.2m respectively in the past two fiscal years. We expect to continue to incur significant operational expenses and net losses in the upcoming 12 months and beyond. Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the stage and complexity of our R&D studies and related expenditures, the receipt of additional payments on the licencing of our technology, if any, and the receipt of payments under any current or future collaborations we may enter into.

As the Company continues with our IND application process and progresses into the clinical development of our initial product candidate, the need for substantial capital resources increases. Our existing cash will not be sufficient to complete the full development, testing and commercialization of an FDA approved product candidate. To achieve this objective, we will require substantial funding.

On August 12, 2022, we entered into a sales agreement with Maxim Group LLC, (“Maxim”), pursuant to which we may offer and sell shares of our common stock with an aggregate offering price of up to $5,925,000 under the At-The-Market Offering (“ATM”). The sales agreement provides that Maxim will be entitled to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the ATM. As of January 17, 2022 no shares have been sold under the ATM.

We may also offer securities in response to market conditions or other circumstances if we believe such a plan of financing is required to advance the Company’s business plans. There is no certainty that future equity or debt financing will be available or that it will be at acceptable terms and the outcome of these matters is unpredictable. A lack of  adequate funding may force us to reduce spending, curtail or suspend planned programs or possibly liquidate assets.  Any of these actions could adversely and materially affect our business, cash flow, financial condition, results of operations, and potential prospects. The sale of additional equity may result in additional dilution to our stockholders. Entering into additional licencing agreements, collaborations, partnerships, alliances marketing, distribution, or licensing arrangements with third parties to increase our capital resources is also possible. If we do so we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favourable to us.

The Company has evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern. As of November 30, 2022, the Company had cash on hand of approximately $4.5m to settle $281k in current liabilities. The Company believes this and our access to an ATM offering are sufficient to fund our expected R&D and operating expenditures for twelve months following the date of filing this report. We do not anticipate making any material capital expenditures in the fiscal 2023 as we believe our current facilities and equipment are sufficient for the forthcoming twelve months following the date of filing this report.

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Item 3. Controls and Procedures

Management’s Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under 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, 2022, the fiscal quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our CEO and CFO concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of November 30, 2022.

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 error. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control over Financial Reporting

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

Our control processes are designed to include remote workers. 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. 

Change of Auditors

Davidson & Company LLP advised Lexaria Bioscience Corp. that it would not stand for re-election as the Registrant’s Certifying Accountant (Auditor) for the fiscal year ended August 31, 2023. Subsequent to the year ended August 31, 2022 the company appointed MaloneBailey LLP as our new Auditors. 

Page 25 of 28

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 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 Form 10-K for the year ended August 31, 2022.

Item 2. Exhibits, Financial Statement Schedules

a)	Financial Statements
	1)	Financial statements for our Company are listed in the index under Item 1 of this document
	2)	All financial statement schedules are omitted because they are not applicable, not material or the required information is shown in the financial statements or notes thereto.

Page 26 of 28

b) Exhibits

Exhibit Number	Description
(31)	Rule 13(a) - 14 (a)/15(d) - 14(a)
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)	Section 1350 Certifications
32.1	Section 906 Certification under Sarbanes Oxley Act of 2002 of Principal Executive Officer
32.2	Section 906 Certification under Sarbanes Oxley Act of 2002 of Principal Financial Officer and Principal Accounting Officer
(101)*	Interactive Data Files
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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

Page 27 of 28

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant 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 17, 2022

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

By:	/s/ Christopher Bunka
	Christopher Bunka
	Chief Executive Officer, Chairman and Director
	(Principal Executive Officer)
	Date: January 17, 2022

By:	/s/ John Docherty
	John Docherty
	President and Director
	Date: January 17, 2022

By:	/s/ Greg Downey
	Greg Downey CPA, CMA
	Chief Financial Officer
	(Principal Financial and Accounting Officer)
	Date: January 17, 2022

Page 28 of 28

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Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2023
Entity Common Stock Shares Outstanding		5,950,998
Document Quarterly Report	true
Document Transition Report	false
Entity Incorporation State Country Code	NV
Entity Tax Identification Number	20-2000871
Entity Address Address Line 1	#100 – 740 McCurdy Road
Entity Address City Or Town	Kelowna
Entity Address State Or Province	BC
Entity Address Country	CA
Entity Address Postal Zip Code	V1X 2P7
City Area Code	1.250
Local Phone Number	765.6424
Security 12b Title	Common Stock, Par Value $0.001
Trading Symbol	LEXX
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes

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CONSOLIDATED BALANCE SHEET - USD ($)	Nov. 30, 2022	Aug. 31, 2022
Current
Cash	$ 4,533,063	$ 5,813,218
Marketable securities	269,707	347,335
Accounts receivable	286,322	201,784
Inventory	9,936	38,418
Prepaid expenses and deposit	260,342	576,761
Total Current Assets	5,359,370	6,977,516
Non-current assets, net
Right of use assets	42,340	52,444
Intellectual property	500,549	488,462
Property & equipment	311,221	315,505
Total Non-current Assets	854,110	856,411
TOTAL ASSETS	6,213,480	7,833,927
Current
Accounts payable and accrued liabilities	241,891	151,449
Lease payable	39,629	42,587
Total Current Liabilities	281,520	194,036
Long Term
Lease payable	0	7,401
Total Long Term Liabilities	0	7,401
TOTAL LIABILITIES	281,520	201,437
STOCKHOLDERS' EQUITY
Authorized 220,000,000 common voting shares with a par value of $0.001 per share Issued and outstanding: 5,950,998 common shares at November 30, 2022 and at August 31, 2022	5,951	5,951
Additional paid-in capital	47,110,257	47,041,481
Deficit	(40,854,472)	(39,098,528)
Equity attributable to shareholders of the Company	6,261,736	7,948,904
Non-controlling Interest	(329,776)	(316,414)
Total Stockholders' Equity	5,931,960	7,632,490
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 6,213,480	$ 7,833,927

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CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares	Nov. 30, 2022	Aug. 31, 2022
CONSOLIDATED BALANCE SHEET
Common stock, shares authorized	220,000,000	220,000,000
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, shares, issued	5,950,998	5,950,998
Common stock, shares, outstanding	5,950,998	5,950,998

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CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Revenue	$ 101,476	$ 13,880
Cost of Goods Sold	15,795	5,570
Gross profit	85,681	8,310
Expenses
Research and development	829,489	458,709
Office and administration	1,025,498	1,553,083
Total operating expenses	1,854,987	2,011,792
Net loss	(1,769,306)	(2,003,482)
Net loss for the period	(1,769,306)	(2,003,482)
Net loss and comprehensive loss attributable to:
Common shareholders	(1,755,944)	(1,993,157)
Non-controlling interest	$ (13,362)	$ (10,325)
Basic and diluted income (loss) per share	$ (0.30)	$ (0.35)
Weighted average number of common shares outstanding
Basic and diluted	$ 5,950,998	$ 5,726,699

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Cash flows used in operating activities
Net loss and comprehensive loss	$ (1,769,306)	$ (2,003,482)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation	68,776	408,544
Depreciation and amortization	24,730	27,930
Noncash right-of-use lease expense	10,104	9,385
Unrealized (gain) loss on marketable securities	77,628	340,417
Unrealized foreign exchange	0	(109)
Lease accretion	845	1,562
Change in operating assets and liabilities
Accounts receivable	(84,538)	(119,111)
Inventory	30,791	2,914
Prepaid expenses and deposits	316,419	82,030
Accounts payable and accrued liabilities	90,442	88,819
Due to related parties	0	(5,223)
Net cash used in by operating activities	(1,234,109)	(1,166,324)
Cash flows used in investing activities
Purchase of equipment	(20,500)	(42,375)
Intellectual property	(14,342)	(15,840)
Net cash (used in) provided by investing activities	(34,842)	(58,215)
Cash flows from financing activities
Lease Payments	(11,204)	(10,987)
Net cash used in by financing activities	(11,204)	(10,987)
Net change in cash for the period	(1,280,155)	(1,235,526)
Cash at beginning of period	5,813,218	10,917,797
Cash at end of period	4,533,063	9,682,271
Supplemental information of cash flows:
Income taxes paid in cash	$ 0	$ 0

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)	Total	COMMON STOCK	ADDITIONAL PAID-IN CAPITAL	DEFICIT	NCI
Balance, shares at Aug. 31, 2021		5,726,699
Balance, amount at Aug. 31, 2021	$ 13,063,552	$ 5,727	$ 45,089,114	$ (31,829,204)	$ (202,085)
Stock based compensation	408,544	0	408,544	0	0
Net loss	(1,993,157)	0	0	(1,993,157)	0
Non-controlling interest	(10,325)	$ 0	0	0	(10,325)
Balance, shares at Nov. 30, 2021		5,726,699
Balance, amount at Nov. 30, 2021	11,468,614	$ 5,727	45,497,658	(33,822,361)	(212,410)
Balance, shares at Aug. 31, 2022		5,950,998
Balance, amount at Aug. 31, 2022	7,948,904	$ 5,951	47,041,481	(39,098,528)	(316,414)
Stock based compensation	68,776	0	68,776	0	0
Net loss	(1,755,944)	0	0	(1,755,944)	0
Non-controlling interest	(13,362)	$ 0	0	0	(13,362)
Balance, shares at Nov. 30, 2022		5,950,998
Balance, amount at Nov. 30, 2022	$ 6,261,736	$ 5,951	$ 47,110,257	$ (40,854,472)	$ (329,776)

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Nature of Business

3 Months Ended

Nov. 30, 2022

Nature of Business

Nature of Business

1. Nature of Business

Lexaria Bioscience Corp. (“Lexaria”, “we”, “our” or the “Company”) is a biotechnology company pursuing the enhancement of the bioavailability of a diverse and broad range of active pharmaceutical ingredients (“API”) using our proprietary DehydraTECH drug delivery technology.

Revenues are generated from licensing contracts for the Company’s patented DehydraTECH technology based on the terms of use and defined geographic and licensing arrangements. We derive income from our third party contracted manufacturing of B2B DehydraTECH enhanced products made to customer specifications that are sold online and in-store in the US and Canada. We also perform contract services in R&D for customer specific formulations that are used in comparison testing to customers’ existing products.

Going Concern Consideration

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

Since inception, the Company has incurred significant operating and net losses. The losses attributable to shareholders were $7.4m, $4.2m and $4.1m for the years ended August 31, 2022, 2021 and 2020, respectively. As of November 30, 2022, we had an accumulated deficit of $40.9m. We expect to continue to incur significant operational expenses and net losses in the upcoming 12 months. Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the stage and complexity of our R&D studies and corporate expenditures, additional revenues received from the licensing of our technology, if any, and the receipt of payments under any current or future collaborations we may enter into. The recurring losses from operations and negative cash flows from operations raise substantial doubt about the Company’s ability to continue as a going concern.

As of November 30, 2022, the Company had cash of approximately $4.5m and carries no significant debt other than amounts payable in the short term.

Also, on August 12, 2022, we entered into a sales agreement with Maxim Group LLC, (“Maxim”), pursuant to which we may offer and sell shares of our common stock with an aggregate offering price of up to $5,925,000 under the At-The-Market (“ATM”) Offering. The sales agreement provides that Maxim will be entitled to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the ATM Offering. As of January 17, 2023 we have not sold any shares under the ATM Offering.

Based on our existing working capital and access to an ATM offering, as disclosed above management believes the Company has sufficient working capital to satisfy the Company’s estimated liquidity needs for the next 12 months. Because of the above factors, the Company believes that this alleviates the substantial doubt in connection with the Company's ability to continue as a going concern. However, there is no assurance that management’s plans will be successful due to the current economic climate in the United States and globally.

Impacts of COVID-19 Pandemic

The emergence of the COVID-19 pandemic in 2020 continues to present uncertainty and unforecastable new risks to the Company and its business plans. As of November 30, 2022, there has been no material impact on the Company’s financial position as a direct result of the pandemic. However, the Company has experienced some supply chain disruptions and shortages in the timely procurement of ingredients and supplies used in both our R&D activities and B2B production. Management views this situation as transitory but cannot predict the length of time it may take for these disruptions to dissipate or if there will be a significant economic effect on the Company’s operations. In the interim, it may cause delays in carrying out our research studies and in our production schedules.

There may be further actions we must take that alter our operations, including those that may be required by federal, state, provincial, or local authorities, or that we determine are in the best interests of our employees and other third parties with which we do business. We do not know when it will become practical to relax or eliminate some or all these measures entirely. The economic effect of a prolonged pandemic is difficult to predict and could result in material financial impact in the Company’s future reporting periods.

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Significant Accounting Policies

3 Months Ended

Nov. 30, 2022

Significant Accounting Policies

Significant Accounting Policies

2. Significant Accounting Policies

The significant accounting policies of the Company are consistent with those of our audited financial statements on Form 10-K for the year ended August 31, 2022.

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Basis of Consolidation

3 Months Ended

Nov. 30, 2022

Basis of Consolidation

Basis of Consolidation

3. Basis of Consolidation

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

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Basis of Presentation

3 Months Ended

Nov. 30, 2022

Basis of Presentation

Basis of Presentation

4. Basis of Presentation

The Company’s unaudited interim consolidated financial statements 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 or any subsequent period.

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, 2022.

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Recent Accounting Guidance

3 Months Ended

Nov. 30, 2022

Recent Accounting Guidance

Recent Accounting Guidance

5. Recent Accounting Guidance

Pronouncements Issued but Not Yet Adopted

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

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Estimates and Judgments

3 Months Ended

Nov. 30, 2022

Estimates and Judgments

Estimates and Judgments

6. 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. Although we believe that these estimates are reasonable actual results could differ.

In preparing these unaudited interim consolidated financial statements, the significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those applied to the audited consolidated financial statements for the year ended August 31, 2022.

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Marketable Securities

3 Months Ended

Nov. 30, 2022

Marketable Securities

Marketable Securities

7. Marketable Securities

The components of Marketable Securities were as follows:

	Cost Basis $		Unrealized Gains $		Unrealized Losses $			Fair Value $
August 31, 2021		1,037,025		16,243		(219,427	)		833,841
Common stock		278,107		118,196		(882,809	)		(486,506	)
August 31, 2022		1,315,132		134,439		(1,102,236	)		347,335
Common stock		-		-		(77,628	)		(77,628	)
November 30, 2022		1,315,132		134,439		(1,179,864	)		269,707

Marketable securities represented the common shares of Hill Street Beverage Company Inc. held by Lexaria. Unrealized losses from common stock are due to market price movements. In management’s opinion based on the evaluation of available information at the quarter ended November 30, 2022, unrealized losses represent temporary impairments.

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Accounts Receivables

3 Months Ended

Nov. 30, 2022

Accounts Receivables

Accounts Receivables

8. Accounts Receivables

Accounts receivable at November 30, 2022 and August 31, 2022 consist of the following:

	November 30,		August 31,
	2022		2022
	$		$
Trade and deposits		137,041		80,374
Territory license fees		100,683		37,248
Sales tax		48,598		84,162
		286,322		201,784

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Inventory

3 Months Ended

Nov. 30, 2022

Inventory

Inventory

9. Inventory

Inventory at November 30, 2022 and August 31, 2022 consist of the following:

	November 30,		August 31,
	2022		2022
	$		$
Raw materials		9,936		38,418

During the three month period ended November 30, 2022, inventory valued at $25,243 was expensed to research and development.

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Prepaid Expenses and Deposits

3 Months Ended

Nov. 30, 2022

Prepaid Expenses and Deposits

Prepaid Expenses and Deposits

10. Prepaid Expenses and Deposits

Prepaid expenses consist of the following at November 30, 2022, and August 31, 2022:

	November 30,		August 31,
	2022		2022
	$		$
Advertising & conferences		74,656		359,863
Legal fees		25,000		25,000
License, filing fees, dues		3,750		15,000
Office & insurance		60,901		80,863
Capital financing		96,035		96,035
		260,342		576,761

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Intellectual Property, net

3 Months Ended

Nov. 30, 2022

Intellectual Property, net

Intellectual Property

11. Intellectual Property, net

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

Issued Patent #	Patent Certificate Grant Date	Patent Family
US 9,474,725 B1	10/25/2016	Food and Beverage Compositions Infused With Lipophilic Active Agents and Methods of Use Thereof
US 9,839,612 B2	12/12/2017
US 9,972,680 B2	05/15/2018
US 9,974,739 B2	05/22/2018
US 10,084,044 B2	09/25/2018
US 10,103,225 B2	10/16/2018
US 10,381,440	08/13/2019
US 10,374,036	08/06/2019
US 10,756,180	08/25/2020
US 11,311,559	04/26/2022	Compositions and Methods for Enhanced Delivery of Antiviral Agents

A continuity schedule for capitalized patents is presented below:

	November 30,			August 31,
	2022			2022
	$			$
Balance – beginning		488,462			364,623
Addition		14,342			131,448
Amortization		(2,255	)		(7,609	)
Balance – ending		500,549			488,462
Patents are amortized over their 20 year legal life.

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Property and Equipment, net

3 Months Ended

Nov. 30, 2022

Property and Equipment, net

Property & Equipment, net

12. Property & Equipment, net

Three Months Ended November 30, 2022	Cost		Period Amortization			Additions		Accumulated Amortization			Net Balance November 30, 2022
	$		$			$		$			$
Leasehold improvements		259,981		(13,509	)		-		(208,195	)		51,786
Computers		70,781		(1,183	)		-		(62,607	)		8,174
Furniture fixtures & equipment		31,126		(1,604	)		-		(24,442	)		6,684
Lab equipment		333,675		(8,616	)		20,500		(109,598	)		244,577
		695,563		(24,912	)		20,500		(404,842	)		311,221

Year Ended August 31, 2022	Cost		Period Amortization			Disposal		Accumulated Amortization			Net Balance August 31, 2022
	$		$			$		$			$
Leasehold improvements		259,981		(54,037	)		-		(194,685	)		65,296
Computers		63,964		(9,874	)		6,817		(61,424	)		9,357
Furniture fixtures & equipment		31,126		(6,417	)		-		(22,837	)		8,288
Lab equipment		291,235		(31,572	)		42,375		(101,047	)		232,564
		646,306		(101,900	)		49,192		(379,993	)		315,505

During the three-month period ended November 30, 2022, $2,438 of depreciation was included in cost of goods sold.

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Accounts Payable and Accrued Liabilities

3 Months Ended

Nov. 30, 2022

Accounts Payable and Accrued Liabilities

Accounts Payable and Accrued Liabilities

13. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities at November 30, 2022 and August 31, 2022 consist of the following:

	November 30,		August 31,
	2022		2022
	$		$
Accounts Payable
Trades payable		173,678		57,150
Sales tax payable		11,011		31,303
Accrued Liabilities
Trades payable		57,202		62,996
Balance		241,891		151,449

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Revenues

3 Months Ended

Nov. 30, 2022

Revenues

Revenues

14. Revenues

A breakdown of our revenues by type for the three months ended November 30, 2022 and 2021 are as follows:

Three Months Ended	November 30,  2022		November 30,  2021
	$		$
B2B sales		29,100		7,000
Licensing		63,435		-
Other		8,941		6,880
Total		101,476		13,880

During the period ended November 30, 2022, the Company recognized B2B product revenues of $29,100 (2021 - $7,000) that relate to sales of our intermediate products for use by B2B customers in their products. Licensing revenue consist of IP licensing fees for transfer of the DehydraTECH technology in line with definitive agreements and also includes royalty fees. The Company recognized $63,435 (2021 - $Nil) in licensing revenue in the same period.

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Common Shares and Warrants

3 Months Ended

Nov. 30, 2022

Common Shares and Warrants

Common Shares and Warrants

15. Common Shares and Warrants

The fair value of share purchase warrants granted was estimated as of the date of the grant by using the Black-Scholes option pricing model. During the quarter ended November 30, 2022, the Company issued no warrants.

A continuity schedule for warrants is presented below:

	Number of Warrants			Weighted Average Exercise Price $
Balance August 31, 2022		2,421,983			8.04
Cancelled/expired		(7,500	)		24.00
Balance November 30, 2022		2,414,483			7.99

A summary of warrants outstanding as of November 30, 2022, is presented below:

# of Warrants		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price $
	60,798	1.96-2.00 years		36.00
	317,190	2.43 years		10.50
	116,667	1.38-2.29 years		9.00
	200,000	1.38 years		7.00
	1,719,828	3.13 years		6.58
	2,414,483	2.78 years		7.99

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Stock Options

3 Months Ended

Nov. 30, 2022

Stock Options

Stock Options

16. Stock Options

The Company has established the Equity Incentive Plan whereby the board of directors may, from time to time, grant up to 510,433 stock options to directors, officers, employees, and consultants. Stock options granted must be exercised within five years from the date of grant or such lesser period as determined by the Company’s board of directors. The exercise price of an option is equal to or greater than the closing market price of the Company’s common shares on the day preceding the date of grant. The vesting terms of each grant are set by the board of directors.

The Company granted the following options during the quarter ended November 30, 2022:

Quantity		Exercise Price $		Life (Years)
	3,400		3.04		5
	41,200		1.96		5
	44,600		2.04		5

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, 2021		206,170			8.90
Cancelled/expired		(3,334	)		9.60
Granted		222,000			4.21
Balance August 31, 2022		424,836			6.45		3.69	5,175
Granted		44,600			2.04
Balance November 30, 2022 (granted)		469,436			5.35		3.91		46,375
Balance November 30, 2022 (exercisable)		441,963			5.41		3.90		41,200

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

	November 30, 2022
Expected volatility	99%-105		%
Risk-free interest rate	3.30-4.12		%
Expected life	5 years
Dividend yield		0	%
Estimated fair value per option	$1.60 - $2.58

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Commitments Significant Contracts and Contingencies

3 Months Ended

Nov. 30, 2022

Commitments Significant Contracts and Contingencies

Commitments, Significant Contracts and Contingencies

17. Commitments, Significant Contracts and Contingencies

Right of Use Assets - Operating Lease

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

	November 30, 2022			August 31, 2022
	$			$
Right of use assets - operating leases		52,444			91,041
Amortization		(10,104	)		(38,597	)
Total lease assets		42,340			52,444
Liabilities:		49,989			89,393
Lease payments		(11,204	)		(44,600	)
Interest accretion		844			5,195
Total lease liabilities		39,629			49,988
Operating lease cost		52,444			52,444
Operating cash flows for lease		11,204			44,599
Remaining lease term	0.9 Years			1.17 Years
Discount rate		7.25	%		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, 2022:

Fiscal 2023	33,611
Fiscal 2024	7,470
Thereafter	-
Total lease payments	41,081
Less: imputed interest	(1,452	)
Present value of operating lease liabilities	39,629
Less: current obligations under leases	(39,629	)
Total	-

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Segment Information

3 Months Ended

Nov. 30, 2022

Segment Information

Segment Information

18. 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.

Three Months Ended November 30, 2022	IP Licensing $			B2B $			Corporate $			Consolidated Total $
Revenue		63,435			29,100			8,941			101,476
Cost of goods sold		-			(15,795	)		-			(15,795	)
Operating expenses		(707,034	)		(10,992	)		(1,136,961	)		(1,854,987	)
Segment income (loss)		(643,599	)		2,313			(1,128,020	)		(1,769,306	)
Total assets		118,096			75,723			6,019,661			6,213,480

Three Months Ended November 30, 2021	IP Licensing $			Products $			Corporate $			Consolidated Total $
External revenue		-			7,000			6,880			13,880
Cost of goods sold		-			(5,570	)		-			(5,570	)
Operating expenses		(837,750	)		(77,002	)		(1,097,040	)		(2,011,792	)
Segment loss		(837,750	)		(75,572	)		(1,090,160	)		(2,003,482	)
Total assets		724,665			116,060			10,905,217			11,745,942

Capital Asset by Region	Cost US		Addition US		Net Balance US		Cost Canada		Net Balance Canada		Total Net Balance
Three Months Ended November 30, 2022	$		$		$		$		$		$
Leasehold Improvements		-		-		-		259,981		51,786		51,786
Computers		-		-		-		70,781		8,174		8,174
Furniture & Fixtures		-		-		-		31,126		6,684		6,684
Lab Equipment		140,487		20,500		116,553		193,185		128,024		244,577
		140,487		20,500		116,553		555,073		194,668		311,221

Capital Asset by Region	Cost US		Addition US		Net Balance US		Cost Canada		Addition Canada		Net Balance Canada		Total Net Balance
Year Ended August 31, 2022	$		$		$		$		$		$		$
Leasehold Improvements		-		-		-		259,981		-		65,296		65,296
Computers		-		-		-		63,964		6,817		9,357		9,357
Furniture & Fixtures		-		-		-		31,126		-		8,288		8,288
Lab Equipment		98,050		42,375		100,031		193,185		-		132,533		232,564
		98,050		42,375		100,031		548,256		6,817		215,474		315,505

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Subsequent Events	3 Months Ended
	Nov. 30, 2022
Subsequent Events
Subsequent Events	19. Subsequent Events N/A

XML

Marketable Securities (Tables)

3 Months Ended

Nov. 30, 2022

Marketable Securities

Schedule of marketable securities

	Cost Basis $		Unrealized Gains $		Unrealized Losses $			Fair Value $
August 31, 2021		1,037,025		16,243		(219,427	)		833,841
Common stock		278,107		118,196		(882,809	)		(486,506	)
August 31, 2022		1,315,132		134,439		(1,102,236	)		347,335
Common stock		-		-		(77,628	)		(77,628	)
November 30, 2022		1,315,132		134,439		(1,179,864	)		269,707

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Accounts Receivables (Tables)

3 Months Ended

Nov. 30, 2022

Accounts Receivables

Schedule of accounts receivables

	November 30,		August 31,
	2022		2022
	$		$
Trade and deposits		137,041		80,374
Territory license fees		100,683		37,248
Sales tax		48,598		84,162
		286,322		201,784

XML

Inventory (Tables)

3 Months Ended

Nov. 30, 2022

Inventory

Schedule of Inventory

	November 30,		August 31,
	2022		2022
	$		$
Raw materials		9,936		38,418

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Prepaid Expenses and Deposits (Tables)

3 Months Ended

Nov. 30, 2022

Prepaid Expenses and Deposits (Tables)

Schedule of Prepaid Expenses and Deposits

	November 30,		August 31,
	2022		2022
	$		$
Advertising & conferences		74,656		359,863
Legal fees		25,000		25,000
License, filing fees, dues		3,750		15,000
Office & insurance		60,901		80,863
Capital financing		96,035		96,035
		260,342		576,761

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Intellectual Property, net (Tables)

3 Months Ended

Nov. 30, 2022

Intellectual Property, net

Schedule of patents

	November 30,			August 31,
	2022			2022
	$			$
Balance – beginning		488,462			364,623
Addition		14,342			131,448
Amortization		(2,255	)		(7,609	)
Balance – ending		500,549			488,462
Patents are amortized over their 20 year legal life.

XML

Property and Equipment, net (Tables)

3 Months Ended

Nov. 30, 2022

Property and Equipment, net

Schedule of property, plant & equipment

Three Months Ended November 30, 2022	Cost		Period Amortization			Additions		Accumulated Amortization			Net Balance November 30, 2022
	$		$			$		$			$
Leasehold improvements		259,981		(13,509	)		-		(208,195	)		51,786
Computers		70,781		(1,183	)		-		(62,607	)		8,174
Furniture fixtures & equipment		31,126		(1,604	)		-		(24,442	)		6,684
Lab equipment		333,675		(8,616	)		20,500		(109,598	)		244,577
		695,563		(24,912	)		20,500		(404,842	)		311,221

Year Ended August 31, 2022	Cost		Period Amortization			Disposal		Accumulated Amortization			Net Balance August 31, 2022
	$		$			$		$			$
Leasehold improvements		259,981		(54,037	)		-		(194,685	)		65,296
Computers		63,964		(9,874	)		6,817		(61,424	)		9,357
Furniture fixtures & equipment		31,126		(6,417	)		-		(22,837	)		8,288
Lab equipment		291,235		(31,572	)		42,375		(101,047	)		232,564
		646,306		(101,900	)		49,192		(379,993	)		315,505

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Accounts Payable and Accrued Liabilities (Tables)

3 Months Ended

Nov. 30, 2022

Accounts Payable and Accrued Liabilities

Schedule of accounts payable and accrued liabilities

	November 30,		August 31,
	2022		2022
	$		$
Accounts Payable
Trades payable		173,678		57,150
Sales tax payable		11,011		31,303
Accrued Liabilities
Trades payable		57,202		62,996
Balance		241,891		151,449

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Revenues (Tables)

3 Months Ended

Nov. 30, 2022

Revenues

Schedule of revenue

Three Months Ended	November 30,  2022		November 30,  2021
	$		$
B2B sales		29,100		7,000
Licensing		63,435		-
Other		8,941		6,880
Total		101,476		13,880

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Common Shares and Warrants (Tables)

3 Months Ended

Nov. 30, 2022

Common Shares and Warrants

Schedule of warrant

	Number of Warrants			Weighted Average Exercise Price $
Balance August 31, 2022		2,421,983			8.04
Cancelled/expired		(7,500	)		24.00
Balance November 30, 2022		2,414,483			7.99

Schedule of warrants outstanding

# of Warrants		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price $
	60,798	1.96-2.00 years		36.00
	317,190	2.43 years		10.50
	116,667	1.38-2.29 years		9.00
	200,000	1.38 years		7.00
	1,719,828	3.13 years		6.58
	2,414,483	2.78 years		7.99

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Stock Options (Tables)

3 Months Ended

Nov. 30, 2022

Stock Options

Summary of continuity schedule of stock options

Quantity		Exercise Price $		Life (Years)
	3,400		3.04		5
	41,200		1.96		5
	44,600		2.04		5

Schedule of stock options activity

	Options			Weighted Average Exercise Price $		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value $
Balance August 31, 2021		206,170			8.90
Cancelled/expired		(3,334	)		9.60
Granted		222,000			4.21
Balance August 31, 2022		424,836			6.45		3.69	5,175
Granted		44,600			2.04
Balance November 30, 2022 (granted)		469,436			5.35		3.91		46,375
Balance November 30, 2022 (exercisable)		441,963			5.41		3.90		41,200

Schedule of fair value of options granted

	November 30, 2022
Expected volatility	99%-105		%
Risk-free interest rate	3.30-4.12		%
Expected life	5 years
Dividend yield		0	%
Estimated fair value per option	$1.60 - $2.58

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Commitments Significant Contracts and Contingencies (Tables)

3 Months Ended

Nov. 30, 2022

Commitments Significant Contracts and Contingencies

Schedule of operating lease liabilities

Fiscal 2023	33,611
Fiscal 2024	7,470
Thereafter	-
Total lease payments	41,081
Less: imputed interest	(1,452	)
Present value of operating lease liabilities	39,629
Less: current obligations under leases	(39,629	)
Total	-

Schedule of maturities of operating lease liabilities

	November 30, 2022			August 31, 2022
	$			$
Right of use assets - operating leases		52,444			91,041
Amortization		(10,104	)		(38,597	)
Total lease assets		42,340			52,444
Liabilities:		49,989			89,393
Lease payments		(11,204	)		(44,600	)
Interest accretion		844			5,195
Total lease liabilities		39,629			49,988
Operating lease cost		52,444			52,444
Operating cash flows for lease		11,204			44,599
Remaining lease term	0.9 Years			1.17 Years
Discount rate		7.25	%		7.25	%

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Segment Information (Tables)

3 Months Ended

Nov. 30, 2022

Segment Information

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

Three Months Ended November 30, 2022	IP Licensing $			B2B $			Corporate $			Consolidated Total $
Revenue		63,435			29,100			8,941			101,476
Cost of goods sold		-			(15,795	)		-			(15,795	)
Operating expenses		(707,034	)		(10,992	)		(1,136,961	)		(1,854,987	)
Segment income (loss)		(643,599	)		2,313			(1,128,020	)		(1,769,306	)
Total assets		118,096			75,723			6,019,661			6,213,480

Three Months Ended November 30, 2021	IP Licensing $			Products $			Corporate $			Consolidated Total $
External revenue		-			7,000			6,880			13,880
Cost of goods sold		-			(5,570	)		-			(5,570	)
Operating expenses		(837,750	)		(77,002	)		(1,097,040	)		(2,011,792	)
Segment loss		(837,750	)		(75,572	)		(1,090,160	)		(2,003,482	)
Total assets		724,665			116,060			10,905,217			11,745,942

Schedule of capital asset by region

Capital Asset by Region	Cost US		Addition US		Net Balance US		Cost Canada		Net Balance Canada		Total Net Balance
Three Months Ended November 30, 2022	$		$		$		$		$		$
Leasehold Improvements		-		-		-		259,981		51,786		51,786
Computers		-		-		-		70,781		8,174		8,174
Furniture & Fixtures		-		-		-		31,126		6,684		6,684
Lab Equipment		140,487		20,500		116,553		193,185		128,024		244,577
		140,487		20,500		116,553		555,073		194,668		311,221

Capital Asset by Region	Cost US		Addition US		Net Balance US		Cost Canada		Addition Canada		Net Balance Canada		Total Net Balance
Year Ended August 31, 2022	$		$		$		$		$		$		$
Leasehold Improvements		-		-		-		259,981		-		65,296		65,296
Computers		-		-		-		63,964		6,817		9,357		9,357
Furniture & Fixtures		-		-		-		31,126		-		8,288		8,288
Lab Equipment		98,050		42,375		100,031		193,185		-		132,533		232,564
		98,050		42,375		100,031		548,256		6,817		215,474		315,505

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Nature of Business (Detail Narrative) - Emergency Business Account Loan Program [Member] - USD ($)		3 Months Ended	12 Months Ended
	Jan. 12, 2021	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2020	Nov. 30, 2022
Accumulated deficit						$ 40,900,000
Loss attributable to shareholders			$ 7,400,000	$ 4,200,000	$ 4,100,000
Proceeds from underwritten public offering	$ 9,471,497
Proceeds from exercise of warrants		$ 4,015,043
Cash and cash equivalents			$ 4,500,000.0

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Basis of Consolidation (Detail Narrative)	Nov. 30, 2022
Lexaria Nicotine L L C
Equity interest percentage	83.33%
Altria Ventures Inc
Equity interest percentage	16.66%

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Marketable Securities (Details) - USD ($)	3 Months Ended	12 Months Ended
	Nov. 30, 2022	Aug. 31, 2022	Aug. 31, 2021
Total [Member]
Cost Basis	$ 1,315,132	$ 1,315,132	$ 1,037,025
Unrealized Gains	134,439	134,439	16,243
Unrealized Losses	(1,179,864)	(1,102,236)	(219,427)
Fair Value	269,707	347,335	$ 833,841
Common Stock [Member]
Cost Basis	0	278,107
Unrealized Gains	0	118,196
Unrealized Losses	(77,628)	(882,809)
Fair Value	$ (77,628)	$ (486,506)

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Accounts Receivables (Details) - USD ($)	Nov. 30, 2022	Aug. 31, 2022
Account receivable	$ 286,322	$ 201,784
Sales tax [Member]
Account receivable	48,598	84,162
Territory license fee [Member]
Account receivable	100,683	37,248
Trade and deposits [Member]
Account receivable	$ 137,041	$ 80,374

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Inventory (Details) - USD ($)	Nov. 30, 2022	Aug. 31, 2022
Inventory
Raw materials	$ 9,936	$ 38,418

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Inventory (Details Narrative)	3 Months Ended
	Nov. 30, 2022 USD ($)
Inventory (Details Narrative)
Inventory	$ 25,243

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Prepaid Expenses and Deposits (Details) - USD ($)	Nov. 30, 2022	Aug. 31, 2022
Prepaid Expenses and Deposits
Advertising and Conferences	$ 74,656	$ 359,863
Legal fees	25,000	25,000
Licence, filing fees, dues	3,750	15,000
Office and insurance	60,901	80,863
Capital Financing	96,035	96,035
Prepaid expenses	$ 260,342	$ 576,761

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Intellectual Property, net (Details)	3 Months Ended
	Nov. 30, 2022
Patent Two [Member]
Issued patent	US 9,839,612 B2
Patent certificate grant date Descriptions	12/12/2017
Patent Three [Member]
Issued patent	US 9,972,680 B2
Patent certificate grant date Descriptions	05/15/2018
Patent Four [Member]
Issued patent	US 9,974,739 B2
Patent certificate grant date Descriptions	05/22/2018
Patent Five [Member]
Issued patent	US 10,084,044 B2
Patent certificate grant date Descriptions	09/25/2018
Patent Six [Member]
Issued patent	US 10,103,225 B2
Patent certificate grant date Descriptions	10/16/2018
Patent Seven [Member]
Issued patent	US 10,381,440
Patent certificate grant date Descriptions	08/13/2019
Patent Eight [Member]
Issued patent	US 10,374,036
Patent certificate grant date Descriptions	08/06/2019
Patent Nine [Member]
Issued patent	US 10,756,180
Patent certificate grant date Descriptions	08/25/2020
Patent ten [Member]
Issued patent	US 11,311,559
Patent certificate grant date Descriptions	04/26/2022
Patent One [Member]
Issued patent	US 9,474,725 B1
Patent certificate grant date Descriptions	10/25/2016

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Intellectual Property, net (Details 1) - USD ($)	3 Months Ended	12 Months Ended
	Nov. 30, 2022	Aug. 30, 2022
Intellectual Property, net
Balance- beginning	$ 488,462	$ 364,623
Addition	14,342	131,448
Amortization	(2,255)	(7,609)
Balance - ending	$ 500,549	$ 488,462

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Intellectual Property, net (Details Narrative)	3 Months Ended
	Nov. 30, 2022
Intellectual Property, net
Useful life of patents	20 years

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Property and Equipment, net (Details) - USD ($)	3 Months Ended	12 Months Ended
	Nov. 30, 2022	Aug. 31, 2022
Costs	$ 695,563	$ 646,306
Additions	20,500	49,192
Accumulated amortization	(404,842)	(379,993)
Balance-end of the period	311,221	315,505
Period Amortization [Member]
Accumulated amortization	(24,912)	(101,900)
Leasehold Improvements [Member]
Costs	259,981	259,981
Additions	0
Accumulated amortization	(208,195)	(194,685)
Balance-end of the period	51,786	65,296
Disposal		0
Leasehold Improvements [Member] | Period Amortization [Member]
Accumulated amortization	(13,509)	(54,037)
Computer [Member]
Costs	70,781	63,964
Additions	0
Accumulated amortization	(62,607)	(61,424)
Balance-end of the period	8,174	9,357
Disposal		(6,817)
Computer [Member] | Period Amortization [Member]
Accumulated amortization	(1,183)	(9,874)
Furniture Fixtures Equipment [Member]
Costs	31,126	31,126
Additions	0
Accumulated amortization	(24,442)	(22,837)
Balance-end of the period	6,684	8,288
Disposal		0
Furniture Fixtures Equipment [Member] | Period Amortization [Member]
Accumulated amortization	(1,604)	(6,417)
Lab Equipment [Member]
Costs	333,675	291,235
Additions	20,500
Accumulated amortization	(109,598)	(101,047)
Balance-end of the period	244,577	232,564
Disposal		(42,375)
Lab Equipment [Member] | Period Amortization [Member]
Accumulated amortization	$ (8,616)	$ (31,572)

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Property and Equipment, net (Details Narrative)	3 Months Ended
	Nov. 30, 2022 USD ($)
Property and Equipment, net (Details)
Amortization	$ 2,438

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Accounts Payable and Accrued Liabilities (Details) - USD ($)	Nov. 30, 2022	Aug. 31, 2022
Accounts payable and accrued liabilities	$ 241,891	$ 151,449
Accrued Liabilities [Member]
Trades payable	57,202	62,996
Accounts Payable [Member]
Trades payable	173,678	57,150
Sales tax payable	$ 11,011	$ 31,303

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Revenues (Details) - USD ($)	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Income from operations	$ 101,476	$ 13,880
Licensing [Member]
Income from operations	63,435	0
Other [Member]
Income from operations	8,941	6,880
B2B [Member]
Income from operations	$ 29,100	$ 7,000

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Revenues (Details Narrative) - USD ($)	3 Months Ended	12 Months Ended
	Nov. 30, 2022	Aug. 31, 2021
Estimates and Judgments
Product revenues	$ 29,100,000	$ 7,000,000
licensing usage	$ 63,435,000	$ 0

XML

Common Shares and Warrants (Details)	3 Months Ended
	Nov. 30, 2022 $ / shares shares
Common Shares and Warrants
Number of Warrants, Beginning Balance | shares	2,421,983
Number of Warrants, Cancelled/Expired | shares	(7,500)
Number of Warrants, Ending Balance | shares	2,414,483
Weighted Average Exercise Price, Beginning Balance | $ / shares	$ 8.04
Weighted Average Exercise Price, Cancelled/Expired | $ / shares	24.00
Weighted Average Exercise Price, Ending Balances | $ / shares	$ 7.99

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Common Shares and Warrants (Details 1) - $ / shares	3 Months Ended
	Nov. 30, 2022	Aug. 31, 2022	Feb. 28, 2022	Nov. 30, 2021	Aug. 31, 2021	Aug. 31, 2020	Aug. 31, 2018
Number of Warrants	2,414,483	2,421,983	2,421,983	2,421,983	2,447,275	471,608	3,286,274
Weighted Average Exercise Price	$ 7.99
Weighted Average Exercise Price	$ 2.78
Warrants 1
Number of Warrants	60,798
Weighted Average Exercise Price	$ 36.00
Warrants 1 | Minimum
Weighted Average Remaining Contractual Life	1 year 11 months 15 days
Warrants 1 | Maximum
Weighted Average Remaining Contractual Life	2 years
Warrants 2
Number of Warrants	317,190
Weighted Average Exercise Price	$ 10.50
Weighted Average Remaining Contractual Life	2 years 5 months 4 days
Warrants 5
Number of Warrants	1,719,828
Weighted Average Exercise Price	$ 6.58
Weighted Average Remaining Contractual Life	3 years 1 month 17 days
Warrants 3
Number of Warrants	116,667
Weighted Average Exercise Price	$ 9.00
Warrants 3 | Minimum
Weighted Average Remaining Contractual Life	1 year 4 months 17 days
Warrants 3 | Maximum
Weighted Average Remaining Contractual Life	2 years 3 months 14 days
Warrants 4
Number of Warrants	200,000
Weighted Average Exercise Price	$ 7.00
Weighted Average Remaining Contractual Life	1 year 4 months 17 days

XML

Stock Options (Details) - $ / shares	3 Months Ended	12 Months Ended
	Nov. 30, 2022	Aug. 31, 2022
Exercise price	$ 2.04	$ 4.21
Stock Options 2
Exercise price	$ 1.96
Life (Years)	5 years
Quantity	41,200
Stock Options 3
Exercise price	$ 2.04
Life (Years)	5 years
Quantity	44,600
Stock Options 1
Exercise price	$ 3.04
Life (Years)	5 years
Quantity	3,400

XML

Stock Options (Details 1) - USD ($)	3 Months Ended	12 Months Ended
	Nov. 30, 2022	Aug. 31, 2022	Aug. 31, 2021
Stock Options
Beginning Balance, Outstanding		206,170
Expired/Cancelled		(3,334)
Granted	44,600	222,000
Ending Balance, Outstanding	469,436	424,836
Ending Balance, Exercisable	441,963
Weighted average exercise price, Expired/Cancelled		$ 9.60
Weighted average exercise price, Granted	$ 2.04	4.21
Weighted average exercise price, Beginning Balance, Outstanding	5.35	$ 6.45	$ 8.90
Weighted average exercise price, exercisable	$ 5.41
Weighted Average Remaining Contractual Term, Outstanding (Years)	3 years 10 months 28 days	3 years 8 months 8 days
Weighted Average Remaining Contractual Term, Exercisable (Years)	3 years 10 months 24 days
Aggregate intrinsic value, granted	$ 5,175
Aggregate Intrinsic Value, Exercisable	41,200
Aggregate Intrinsic Value, Outstanding	$ 46,375

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Stock Options (Details 2)	3 Months Ended
	Nov. 30, 2022 $ / shares
Expected life	5 years
Dividend yield	0.00%
Estimated fair value per option Minimum	$ 1.60
Estimated fair value per option Maximum	$ 2.58
Minimum Member
Expected volatility Minimum	99.00%
Risk-free interest rate Minimum	3.30%
Maximum
Expected volatility Minimum	105.00%
Risk-free interest rate Minimum	4.12%

XML

Stock Options (Detail Narrative)	3 Months Ended
	Nov. 30, 2022
Stock Options
Description of incentives plan	The Company has established the Equity Incentive Plan whereby the board of directors may, from time to time, grant up to 510,433 stock options to directors, officers, employees, and consultants

XML

Commitments Significant Contracts and Contingencies (Details) - USD ($)	3 Months Ended	12 Months Ended
	Nov. 30, 2022	Aug. 31, 2022
Commitments Significant Contracts and Contingencies
Right of use assets - operating leases	$ 52,444	$ 91,041
Amortization	10,104	38,597
Total lease assets	42,340	52,444
Liabilities operating lease	49,989	89,393
Lease payments	(11,204)	(44,600)
Interest accretion	844	5,195
Total lease liabilities	39,629	49,988
Operating lease cost	52,444	52,444
Operating cash flows for lease	$ 11,204	$ 44,599
Remaining lease term	10 months 24 days	1 year 2 months 1 day
Discount rate	7.25%	7.25%

XML

Commitments Significant Contracts and Contingencies (Details 1)	Nov. 30, 2022 USD ($)
Commitments Significant Contracts and Contingencies
Fiscal 2023	$ 33,611
Fiscal 2024	7,470
Thereafter	0
Total lease payments	41,081
Less: imputed interest	(1,452)
Present value of operating lease liabilities	39,629
Less: current obligations under leases	(39,629)
Total	$ 0

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Segment Information (Details) - USD ($)	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Aug. 31, 2022
Revenue	$ 101,476	$ 13,880
Cost of goods sold	15,795	5,570
Operating expense	(1,854,987)	(2,011,792)
Segment income (loss)	(1,769,306)	(2,003,482)
Total assets	6,213,480	11,745,942	$ 7,833,927
Products
Revenue		7,000
Cost of goods sold		5,570
Operating expense		(77,002)
Total assets		116,060
Segment loss		(75,572)
IP Licensing
Revenue	63,435	0
Cost of goods sold	0	0
Operating expense	(707,034)	(837,750)
Segment income (loss)	(643,599)	(837,750)
Total assets	118,096	724,665
Corporate
Revenue	8,941	6,880
Cost of goods sold	0	0
Operating expense	(1,136,961)	(1,097,040)
Segment income (loss)	(1,128,020)	(1,090,160)
Total assets	6,019,661	$ 10,905,217
B2B [Member]
Revenue	29,100
Cost of goods sold	15,795
Operating expense	(10,992)
Segment income (loss)	2,313
Total assets	$ 75,723

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Segment Information (Details 1) - USD ($)	Nov. 30, 2022	Aug. 31, 2022
Net Balance	$ 311,221	$ 315,505
Net Balance	311,221	315,505
Canada [Member]
Net Balance	194,668	215,474
Cost	555,073	548,256
Addition		6,817
US [Member]
Net Balance	116,553	100,031
Cost	140,487	98,050
Addition	20,500	42,375
Leasehold Improvements [Member]
Net Balance	51,786	65,296
Leasehold Improvements [Member] | Canada [Member]
Net Balance	51,786	65,296
Cost	259,981	259,981
Addition		0
Leasehold Improvements [Member] | US [Member]
Net Balance	0	0
Cost	0	0
Addition	0	0
Furniture Fixtures Equipment [Member]
Net Balance	6,684	8,288
Furniture Fixtures Equipment [Member] | Canada [Member]
Net Balance	6,684	8,288
Cost	31,126	31,126
Addition		0
Furniture Fixtures Equipment [Member] | US [Member]
Net Balance	0	0
Cost	0	0
Addition	0	0
Lab Equipment [Member]
Net Balance	244,577	232,564
Lab Equipment [Member] | Canada [Member]
Net Balance	128,024	132,533
Cost	193,185	193,185
Addition		0
Lab Equipment [Member] | US [Member]
Net Balance	116,553	100,031
Cost	140,487	98,050
Addition	20,500	42,375
Computer Equipment [Member]
Net Balance	8,174	9,357
Computer Equipment [Member] | Canada [Member]
Net Balance	8,174	9,357
Cost	70,781	63,964
Addition		6,817
Computer Equipment [Member] | US [Member]
Net Balance	0	0
Cost	0	0
Addition	$ 0	$ 0