LEXX 10-K & 10-Q changes, risk factors and insider trading

Any failure in protecting our intellectual property may have a negative impact adverse effect on our ability to develop and license DehydraTECH.

Agreements with third parties conducting services on our behalf might terminate for a variety of reasons, including a failure to perform by the third parties. If any of these terminate, we may be unable to enter into arrangements with alternative providers or to do so on commercially reasonable terms. Switching or adding additional third parties involveinvolves increased management time, focus, regulatory approvals and/or additional cost. Any delays in our manufacturing capabilities or research studies may have a material adverse impact on our business, financial condition and prospects.

The R&D programs required to develop the evidence that DehydraTECH’s demonstrated efficacy also works with other APIs and molecules to develop the evidence may ultimately be unsuccessful. We cannot be certain that our overall business model within any particular sector will ever come to fruition, and even if they do, may notwill generate meaningful profits. We may not recover all or any portion of our capital investment in our research and technology development, marketing, or other aspects of the business.

We cannot be certain of the outcome of preclinical testing and clinical studies and results from these studies may not predict the results that will be obtained in later phase trials of our product candidates. Even if we are able to complete our preclinical studies and planned clinical trials in line with our projected timelines, results from such studies and trials may not be not replicated in subsequent preclinical studies or clinical trial results. Additionally, such studies may be delayed due to events beyond our control. As a result, we cannot guarantee that we will be able to submit INDs, or similar applications, within our projected timelines, if at all, or that the FDA, or similar regulatory authorities, will allow us to commence clinical trials.

Any success achieved at a given stage of the clinical trials does not guarantee that the future achievement of success at any subsequent stage, including without limitation, final FDA or comparable regulatory authority approval.

We currently have no commercial pharmaceutical products and therefore generate no revenue from pharmaceutical products and may never be able to develop marketable pharmaceutical products. We have limited experience in filing the applications necessary to obtain approval and expect that we will need to rely on CROs and regulatory consultants to assist us with this process. Regulatory approval also requires the submission about the product manufacturing process and the inspection of the manufacturing facilities. Our success is dependent on our or a third parties’ ability to successfully navigate the risks and obstacles associated with obtaining FDA or other regulatory clearance for any DehydraTECH enhanced formulated product.

Pharmaceutical products using DehydraTECH with CBD as an API have neverlimited been approvedapproval for the treatment of any disease.

To date the FDA has approved only limited use of cannabinoids for the treatment of any disease or condition. The FDA has approved one cannabinoid-derived drug product for the treatment of seizures associated with Lennox-Gastaut syndrome and Dravet syndrome and three synthetic cannabinoid-related drug products for the treatment of nausea and vomiting caused by cancer chemotherapy. While we expect any product candidates that we develop will be regulated as a new drug under the Federal Food, Drug, and Cosmetic Act, the FDA could decide to regulate them or any other products incorporating DehydraTECHDehydraTECH-CBD under a different regulatory regime. The lack of policies, practices or guidelines may hinder or slow review by the FDA of any regulatory filings that we may submit. The FDA may respond to these submissions by defining requirements that we may not have anticipated.

We currently have licensees who produce hemp-derived non-pharmaceutical CBD products. The Farm Bill delegates the authority to the states to regulate and limit the production of these products within their territories. Many states now have laws and regulations that allow for the production and sale of hemp-derived CBD products. We can offer no assurance that these state laws will not be repealed or amendedamended, which could render these products illegal. Such actions would adversely impact our product revenue and royalties derived from DehydraTECH-enabled CBD products.

We cannot predict if investors will find our common shares less attractive because we are not required to comply with more robust disclosure or the auditorauditor’s attestation requirements. If investors find our common shares less attractive as a result, there may be a less active trading market for our common shares and trading prices may be negatively affected.

Lexaria’s DehydraTECH patented 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 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.

Lexaria is advancing several R&D activities in both preclinical and planned future clinical programs. Our primary focus during the fiscal year was on our continued investigations of DehydraTECH-enhanced GLP-1 and GIP drugs. These investigations included twothe human pilot studies, with our second human pilot study testing an oral mouth melt formcompletion of DehydraTECH-enhanced semaglutide and an extensive 12 arm animal study to investigate DehydraTECH enhanced semaglutide (both pure API and formulated Rybelsus®), DehydraTECH enhanced liraglutideliraglutide, and DehydraTECH enhanced CBD for weight loss.loss and two human pilot studies, with one testing DehydraTECH-tirzepatide and the other testing DehydraTECH-liraglutide. In addition, Lexaria hascompleted commencedits start-uplast activitiespatient visit for its 12 week12-week chronic human clinical trial study of diabetic patients comparing DehydraTECH-cannabidiol (“CBD”), DehydraTECH-semaglutide, DehydraTECH-CBD combined with DehydraTECH-semaglutide and DehydraTECH-tirzepatide against a Rybelsus® control. The study data for the preparation of the report for this 12-week chronic human clinical trial is currently being analyzed.

In addition, we have continued to progress forward with addressing comments provided by the FDA on our IND application for the conduct of our Phase 1(b) clinical study investigation of DehydraTECH-CBD for the reduction of hypertension. SubjectWe will need to receipt ofraise sufficient funding,funding weor anticipateenter thatinto wea willcollaboration to be in a position to proceed with this study during the 2025 fiscal year.study.

We were granted a total of tensix new patents during fiscal 20242025 including our first everAustralian patentspatent in our Family #24 for the treatment of epilepsy, our first Japanese patent in our Family #20 for sublingual delivery of nicotine and our first patent granted in our Family #27 for Compositions and Methods for Treating Diabetes, making it another successful year for the acquisition of new intellectual property.

The data generated from our past and ongoing R&D programs continues to support confirmatory results and areis contributing greatly to our understanding of the workings of DehydraTECH. These findings encourage the pursuit of lucrative commercial applications in the pharmaceutical sector. We continue to devote an increasing proportion of our resources toward pharmaceutical applications with the continuation of our programs directed at the enhancement of GLP-1 and GIP drugs.

During the year ended August 31, 2024,2025, we completed two human pilot studies and oneour animalAustralian studyclinical trial investigating DehydraTECH infused GLP-1, GIP and CBD formulations. These programs, having been funded by the proceeds of Lexaria’s combined 2024 and 2025 financing activities of approximately $10.3$16 million, supported our significant advancements in the fields of diabetes, weight loss, heart disease and hypertension.

We consider the advancement of our applied R&D studies asto be a vital step towards our goal of establishing commercial relationships with industry partners who can utilize DehydraTECH within existing or new product lines. Conducting additional in vitro and in vivo studies which test the absorption of some, or all of the molecules named within our patents and patent applications,applications further substantiatesubstantiates the effectiveness of DehydraTECH. Successful tests are expected to increase awareness and acceptance of DehydraTECH as a meaningful method used to deliver some or all of the named molecules more effectively than current delivery methods avail.currently available. Absorption tests are an important element leading towardsto higher rates of acceptance and the implementation of our technology licensing initiatives. Our R&D results serve to de-risk the potential API products that could conceivably develop into clinical trials and ultimately new drugs.

Our pursuit of opportunities within the GLP-1/GIP drug, cannabinoid, nicotine and other bioactive molecular markets in the US and internationally continue unabated. We believe there are meaningful competitive advantages in manufacturers adopting DehydraTECH in their productsproducts, withincluding its demonstrated higher absorption levels, its ability to infuse smaller quantities of active molecules in their products and the benefit of its predictable drug delivery times. Implementing our technology could lead to smaller dosing and decreased manufacturing costs while masking unwanted flavor and smell of the active molecules. We are anticipating these efforts will lead to increased licensing revenue through licensing partnerships. We are pursuing technology licensing opportunities as a method of generating profitable revenue streams over long periods of time. We have not yet, however, been able to secure a large client utilizing our technology in large quantities of products.

With forty-six56 patents granted to date of which eighteen22 are granted in the US, Lexaria believes that it has a robust patent portfolio but continues to seek additional protection for its intellectual property globally. The successful granting of additional patents could lead to material increases in shareholder value through the ability to generate meaningful license revenues from our increased intellectual property portfolio.

Lexaria expectshas itsconcluded currentthat cashour reservesexisting cash, combined with inflows expected from executed license agreements, will not be sufficient to meet our operational requirements for the twelve months following the release of these audited financial statements. Accordingly, there is substantial doubt as to our ability to continue as a going concern for at least one year following the date of the consolidated financial statements included in this report. The Company is continuingcontinues to explore equity financing arrangements and strategic corporate business partnerships for many of its specific drug investigations after sufficient data has been generatedgenerated. which,These efforts, if successful, could generate any combination of up-front milestone and/or royalty payments to the Company.

Our net loss from operations decreasedincreased by $903,871$6,102,780 to $11,911,434 for the year ended August 31, 2025 from $5,808,654 for the year ended August 31, 2024 from $6,712,525 for the year ended August 31, 2023.2024. The changes between these periods for the respective items are summarized as follows:

Total Revenue for fiscal year 20242025 increased by $238,070,$241,645, or 105%,52%, to $464,278$705,923 from $226,208$464,278 in fiscal year 2023.2024. The primary source of revenue for the Company relates to the licensing of our technology to others. Licensing revenue grew by $311,190,$238,010, or 212%,52%, to $696,000 in fiscal year 2025 as compared to $457,990 in fiscal year 2024 as compared to $146,800 in fiscal year 2023.2024. This increase was attributable to minimum fees relatedfrom to twoour license agreements.agreement Thewith increasePremier inwhich licensingexpired revenueon wasAugust partially31, offset2025. decreases in both the revenueRevenue from our B2B processing of intermediary CBD products andincreased by $4,535 during fiscal year 2025, while other revenues which decreased by $38,779$900 andduring $34,341the respectivelysame in fiscal year 2024.period. These decreasesyear-over-year reflectedchanges reflect the Company’s emphasis during the year on licensing DehydraTECH to new and existing industry participants to enable enhanced performance of their developmental and commercial stage products.

InDue fiscalto 2025the expiration of our license agreement with Premier and assuming ourwe existingdo clientsnot remainenter ininto complianceany withadditional theirlicensing contracts,agreements, the Company expects to see ana increasedecrease in its revenue through furtherfrom technology licensing fromof DehydraTECH processed hemp-based CBD and other consumer products.products One of our contracted clients is contractually required to make significantly larger quarterly payments to us duringin fiscal 2025 than during fiscal 2024.2026. The anticipated expansion of our intellectual property portfolio and conducting supportive R&D may jointly contribute to strengthening revenue prospects as we continue to explore new applications for our technology.

Research and development (“R&D”) costs are expensed as incurred and account for a significant portion of our operational expenses. During the fiscal year ended August 31, 2024,2025, funding constraints limited our ability to direct resources to studies other than those pertaining to weight loss and diabetes. R&D expenditures for fiscal year 20242025 decreasedincreased by $1,306,156,$5,878,192, or 36%,249%, to $2,360,565$8,238,757 from $3,666,721$2,360,565 for fiscal year 2023.2024. The decreaseincrease in year-over-year R&D expenditures was driven by the commencement and completion of studiesthe relatedlast topatient hypertensionlast visit for our Australian Phase 1b, 12-week chronic study investigating DehydraTECH-semaglutide, DehydraTECH-CBD, a combination thereof and anti-viralDehydraTECH-tirzepatide drugsagainst a Rybelsus® control. Lexaria released interim 8-week results from its Australian study evidencing that the DehydraTECH-semaglutide and aDehydraTECH-tirzepatide slow-downarms produced fewer adverse events (“AEs”) and, in activityparticular, asfewer wegastrointestinal prepared(“GI”) toAEs beginthan ourthe investigationalRybelsus® studiescontrol relatedarm. toAs the manufacturers of GLP-1 and GIP drugs.drugs R&Dhave expendituresconsistently relatenoted, primarilyGI toAEs ouras newan investigationsarea intoof GLP-1major and GIP drugs, along with ongoing expenditures in preparation for our hypertension-related prospective IND filing. To date,concern. Lexaria hasis beenextremely pleased with thethese resultsinitial of our investigational studies with DehydraTECH enhanced GLP-1 and GIP drugs.results.

We will continue to invest in our R&D programs for the foreseeable futurefuture, andalthough we expect these expenses to increasedecrease in 20252026 compared to 2024,2025, assumingunless we are successful in completing corporate financing activities. Currently, our primary clinical research areas of interests are focused on the investigation of DehydraTECH-powered GLP-1/GIP drugs as well as CBD for the treatment of diabetes and weight loss and,as also,well as CBD for the reduction of hypertension.

Of significant note, Lexaria submitted our preliminary pre-meeting application for an Investigational New Drug (“IND”) to the FDA with plans to develop a cannabidiol-based drug formulation, DehydraTECH-CBD for hypertension. We received a written response following our pre-IND meeting in August 2022 where the agency has agreed with the Company’s plans to pursue a faster 505(b)(2) new drug application regulatory pathway for the program. The 505(b)(2) pathway permits a faster commercial approval than the traditional 505(b)(1) NDA pathway. The FDA has agreed with the Company’s proposed clinical protocol for DehydraTECH-CBD, which, as currently designed, would target 120 patients with hypertension. The regulator has also decided that there wasis no need to conduct additional non-clinical studies before the start of the IND program. Lexaria has been working with its third partythird-party regulatory affairs consultant to respond to certain requests of the FDA and amendsubmitted its amended protocol accordingly. These documents are expected to be submitted during the first calendar quarter of 2025.

General and administrative expenses for fiscal year 20242025 increased by $790,012,$493,162, or 26%,13%, to $3,852,021$4,345,183 from $3,062,009$3,852,021 for fiscal year 2023.2024. The increase during Fiscalfiscal 20242025 relates primarily to higher legal and professional, wages and salaries, andforeign consultingexchange expenseslosses, ($367,473,patent-related $267,330,impairment losses, and $252,677,insurance premiums ($914,579, $192,518, $189,528, and $127,254, respectively); combined with higher advertising and promotional expenditures ($84,187), as we scaled our efforts to bring the results of the Company’s R&D programs to the attention of various industry sectors and to the scientific and investment communities; partially offset by lower depreciation,consulting officefees, advertising and promotion expenses, and impairment losses on the Company’s patent portfolio ($69,814, $63,499,legal and $48,925,professional fees, and investor relations expense ($464,524, $224,230, $159,721, and $79,900, respectively). The increase in wages and salaries relates primarily to stock-based compensation expense (non-cash), which increased to $492,236$859,494 during the year ended August 31, 20242025 from $170,382$492,236 for the year ended August 31, 20232024 due to increased stock options vesting during the year.

The increasedecrease in consulting expensefees for the year ended August 31, 20242025 relates primarily to separationreduced payments to our former Chief Executive Officer, who resigned effective August 31, 2024, but is maintaining his position as Chairman of the Board and as a Strategic Executive Consultant. The increase in legal and professional fees reflects an increased level of equity financing-related activity during the fiscal year.

Other Income/(Loss) for fiscal year 20242025 decreased by $122,979,$24,827, or 69%,45%, to a loss of $55,524$30,697 from a loss of $178,503$55,524 for fiscal year 2023.2024. The changedecrease wasrelates primarily drivento by the fact that fiscal year 2024lower unrealized losses on marketable securities of($33,714 for the year ended August 31, 2025, compared to $69,835 were $151,858, or 68%, lower thanduring fiscal year 2023 unrealized losses on marketable securities of $221,693.2024). This is attributable to continuing decreases in the fair value of the Company’s investment in Hill Inc. common shares. We remain confident that the loss may be temporary in nature as Hill Inc. continues to make inroads into the US hemp markets with DehydraTECH enabled products produced and sold by their licensees.

As the Company continues with our IND application process and progresses into the clinical development of our initial product candidate, the need for substantial capital resources increases. The Company intends to form industry partnerships for later stage clinical development, which in any event is expected to be a multi-year process. Our existing cash is not sufficient to complete the full development, testing and commercialization of an FDA approvedFDA-approved product candidate. Accordingly, we will be required to obtain significant further funding or reach industry partnerships to achieve this business objective and/or delay or modify the program in accordance with the financial resources available.

The Company has evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern. As of August 31, 2024,2025, the Company had cash on hand of approximately $6.5$1.8 million to settle $1.1$1.5 million in current liabilities. The Company believesdoes not believe this is sufficient to fund our expected R&D and operating expenditures for the twelve-month period following the filing date of this report. We do not anticipate making any material capital expenditures in fiscal 2025,2026, other than those currently budgeted for our R&D programs, as we believe our current facilities and equipment are sufficient for the forthcoming twelve months following the filing date of this report. Our ability to continue as a going concern will depend on our ability to obtain additional equity, effect a collaborative or strategic partnership, reduce or contain expenditures, and, ultimately, to generate revenue. Based on these factors, management determined that there is substantial doubt as to our ability to continue as a going concern.

The Company’s working capital balance increaseddecreased by approximately $4.9$4.8 million due primarily to the net impact of cash fromused financingin operating activities and cash usedgenerated infrom operatingfinancing activities during the year ended August 31, 2024.2025.

Net cash used in operating activities was approximately $5.0$10.5 million for the year ended August 31, 2024,2025, compared with $5.9$5.0 million during the same period in 2023.2024. The decreaseincrease in net cash used in operating activities during the year ended August 31, 20242025 relates primarily to aan decreaseincrease in our net loss ($903,871$6.1 million).

Net cash used in investing activities is attributable to purchases of short-term investments, combined with acquisitions of intellectual property and equipment. During the fiscal year, tensix additional patents were granted.

Net cash provided by financing activities reflects net proceeds from the sale of common shares for cash and the exercise of warrants.cash. Net proceeds from the October 3, 2023, February 14,16, 2024 and April 30,28, 20242025 financing transactions and fromAt warrantthe exercisesMarket offerings totaled approximately $10.3$6.0 million.

Lexaria is advancing its preclinical R&D activities as well as planned future clinical programs. During the sixnine months ended FebruaryMay 28,31, 2026, Lexaria:

During the sixnine months ended FebruaryMay 28,31, 2026, the Company entered into a Securities Purchase Agreement whereby on:

Our current patent portfolio includes patent family applications or grants pertaining to Lexaria’s compositions, methods of use in improving API bioavailability and palatability and methods of treatment for a range of therapeutic indications, orally or topically, for a wide variety of APIs encompassing GLP-1/GIPsGLP-1, GIP, and glucagons; fat soluble vitamins; NSAID pain medications; nicotine and its analogs; and cannabinoids. The pending and granted patents also cover the manufacturing and processing methods used to combine a variety of fatty acid-rich triglyceride oils with active pharmaceutical ingredients. This includes heating and drying methods and use of excipients and substrates.

The Company currently has several applications pending worldwide and due to the complexity of pursuing patent protection, the quantity of patent applications will vary continuously as each application advances or stalls. We continue to investigate national and international opportunities to pursue expansions and additions to our intellectual property portfolio. Patents have been filed or granted specifically for the use of DehydraTECH with GLP-1/GIPGLP-1, GIP, and glucagon drugs to support our ongoing and expanding cardiometabolic clinical research programs in this therapeutic field for the treatment of diabetes/weight loss. Patents have been filed or granted specifically for the use of DehydraTECH with cannabinoids for the treatment of heart disease and hypertension to support our anticipated clinical trial work under our cleared Investigational New Drug (“IND”) application with the Food and Drug Administration (“FDA”), and for treatment of other prospective therapeutic indications of interest to us including epilepsy.

The Company regularly pursues new R&D programs that investigate potential commercial applications for the incorporation of DehydraTECH. These include, but are not limited to, ongoing programs to explore different therapeutic indications which DehydraTECH-enhanced drug products can be utilized to treat. Currently, our primary clinical research areas of interests are focused on the investigation of DehydraTECH-powered GLP-1/GIPGLP-1, GIP, and glucagon drugs as well as CBD for the treatment of diabetes and weight loss and, also, CBD for the reduction of hypertension for which our IND application to perform a Phase 1b study received a Study May Proceed letter from the FDA in early calendar-2024. Previously, our study programs provided successful human and/or animal testing results with DehydraTECH formulations of nicotine for oral pouches and prospective nicotine replacement therapy, human hormones, antiviral drugs, CBD for hypertension, diabetes, weight loss, seizure disorder applications, and others. Depending on the number or complexity of the programs undertaken, R&D budgets are expected to vary significantly. It is in our best interest to remain flexible at this early stage of our R&D efforts in order to capitalize on potential novel findings from early-stage tests andand, thusthus, redirect research when necessary into specific avenues that offer the most reward.

Lexaria also routinely studies the chemical and microbiological purity and stability of select DehydraTECH compositions that it has prepared for its animal and human studies over an extended duration of 6-12 months. Along with improved tolerability, PK and efficacy performance, long term stability is crucial if oral variants of GLP-1 /GLP-1, GIP and glucagon drugs are to be seriously considered as replacements for currently injectable versions of these drugs. Stability findings thus far are positive and meeting internal expectations.

The FDA provided Lexaria with a positive written response on August 10, 2022, from our pre-IND meeting regarding DehydraTECH-CBD for the treatment of hypertension. The FDA confirmed that it had agreed with Lexaria’s proposal to pursue a 505(b)(2) new drug application (“NDA”) regulatory pathway for our program. On January 29, 2024, Lexaria submitted its IND application with the FDA and it received a Study May Proceed letter from the FDA on February 29, 2024. Since that time, Lexaria iscontinues attendingto attend to its annual reporting update obligations to the FDA for study HYPER-H23-1 to maintain its active status and continues to address certain of the FDA conditions while also seeking funding to commence the study.

Of note, DehydraTECH-CBD was evaluated recently in Lexaria’sLexaria (AU) Pty Ltd’s Australian clinical study GLP-1-H24-4, with findings announced in December 2025, in overweight or obese, or pre- and Type II diabetic participants. It was noteworthy therein that the DehydraTECH-CBD arm achieved meaningful reductions in blood pressure supportive of the Company’s hypertension treatment interests, even though study GLP-1-H24-4 was pursued to assess formulations for distinct potential therapeutic use in the fields of diabetes and weight loss management. At week 4 of treatment in study GLP-1-H24-4, a mean change of −4.6 mmHg in systolic blood pressure and −4.0 mmHg in diastolic blood pressure was evidenced in the DehydraTECH-CBD arm. Blood pressure reductions were also evident in this arm following completion of treatment at the week 16 follow up point (4 weeks after cessation of treatment) with a mean change of −2.6 mmHg in systolic blood pressure and −3.0 mmHg in diastolic blood pressure reported.

A critical accounting estimate is an accounting estimate for which a) the nature of the estimate is material due to the related level of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and b) the impact of the estimate on the Company’s financial position or operating performance is material. We did not identify any such estimates in our Annual Report on Form 10-K for the year ended August 31, 2025 and none have been identified for the sixnine months ended FebruaryMay 28,31, 2026.

Through FebruaryMay 28,31, 2026, we have funded our operations primarily through the proceeds from the sale of common stock. The Company has consistently incurred recurring losses and negative cash flows from operations, including net losses of $3,050,235$5,043,216 and $5,423,600$9,214,206 for the sixnine months ended FebruaryMay 28,31, 2026, and FebruaryMay 28,31, 2025, respectively.

During the sixnine months ended FebruaryMay 28,31, 2026, we raised $6.5 million in net proceeds from the sale of securities pursuant to our Registered Direct offerings which closed in September, 2025 and December, 2025.

Results of Operations for the Period Ended FebruaryMay 28,31, 2026, and FebruaryMay 28,31, 2025

Our net loss for the sixnine months ended for the respective items are summarized as follows:

Fees from intellectual property licensing and B2B sales totaled $20,000 and $357,923,$531,923, respectively, for the six-monthnine-month periods ended FebruaryMay 28,31, 2026 and FebruaryMay 28,31, 2025. For the sixnine months ended FebruaryMay 28,31, 2026, relative to the sixnine months ended FebruaryMay 28,31, 2025, license fees and B2B sales decreased by $328,000$502,000 and $9,923, respectively, reflecting the expiration of the Premier Anti-Aging Co., Ltd. licensing contract and a continuing shift in emphasis away from pursuit of B2B clients as we move toward pharmaceuticals. The Company did not recognize any other revenue during the sixnine months ended FebruaryMay 28,31, 2026 or the sixnine months ended FebruaryMay 28,31, 2025.

Expenditures on R&D decreased by $2,492,408$4,239,075 year-over-year for the six-monthnine-month period ended FebruaryMay 28,31, 2026, as we completed our Phase 1b Clinical Trial (GLP-1-H24-4) in December of 2025. Lexaria continues with applied research & development and programs in our pharmaceutical division with our primary focus being on optimization of DehydraTECH formulations of GLP-1 drugs, as well as advancing our DehydraTECH-CBD drug to treat hypertension.

In the sixnine months ended FebruaryMay 28,31, 2026, consulting fees and salaries decreased by $45,806$502,388 year-over-year, primarily due to lower stock-based compensation ($116,744$494,037) and the discontinuation of certain consulting arrangements ($134,182$120,335); partially offset by higher incentive compensation ($131,071) and salary adjustments ($74,150) .

Our legal and professional fees increased by $126,005$211,573 during the sixnine months ended FebruaryMay 28,31, 2026 as compared to the same prior year period due to higher accounting and professional fees associated with registration statement filings, financing activities and the utilization of patent-related legal advisory services.

Our other general and administrative expenses decreased in total by $339,179$152,115 during the six-monthnine-month period ended FebruaryMay 28,31, 2026, as compared to the same prior year period. The decrease is primarily attributable to lower spending on advertising and promotions ($307,972$108,661) and decreased impairment losses ($33,540).

Net cash used in operating activities was approximately $3.1$4.8 million for the sixnine months ended FebruaryMay 28,31, 2026, compared with $4.2$7.8 million during the same prior year period. The decrease is attributable to a decrease of $2.4$4.2 million in our net loss, partially offset by ana increasedecrease in operating assets and liabilities of $1.2$0.6 million as we completed Study GLP-1-H24-4, and a decrease of $0.1$0.5 million in non-cash expenses.

Net cash used in investing activities was $59,008$86,097 for the sixnine months ended FebruaryMay 28,31, 2026, compared to $65,698$85,141 for the same prior year period. The decrease relates primarily to lower spending on the prosecution of intellectual property, partially offset by increased purchases of laboratory equipment.

Net cash from financing activities was approximately $6.5 million for the sixnine months ended FebruaryMay 28,31, 2026, compared to approximately $4.4$6.0 million for the same prior year period. The increase relates to higher net proceeds from the sale of common shares.

Since inception, the Company has incurred significant operating and net losses. Net losses attributable to shareholders were $3.0$5.0 million and $5.4$9.2 million for the sixnine months ended FebruaryMay 28,31, 2026, and FebruaryMay 28,31, 2025, respectively. As of FebruaryMay 28,31, 2026, we had an accumulated deficit of $66.5$68.5 million. We expect to continue to incur significant operational expenses and net losses in the upcoming 12 months. Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the stage and complexity of our R&D studies and corporate expenditures, additional revenues received from the licensing of our technology, if any, and the receipt of payments under any current or future collaborations into which we may enter. The recurring losses and negative net cash flows raise substantial doubt as to the Company’s ability to continue as a going concern.

During the sixnine months ended FebruaryMay 28,31, 2026, the Company has completed the following:

The accompanying unaudited consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business. As of FebruaryMay 28,31, 2026, the Company had cash and cash equivalents of approximately $5.1$3.5 million to settle $0.2$0.4 million in current liabilities. We have performed a review of our cash flow forecast, and given our current development plans and cash management efforts, we anticipate that our cash resources will be sufficient to fund operations through the first quarter of fiscal year 2027. However, we have also concluded that our existing cash, combined with inflows expected from executed license agreements, will not be sufficient to meet the Company's financial obligations for the twelve-month period following the issuance of these consolidated financial statements. Accordingly, there is substantial doubt as to our ability to continue as a going concern for at least one year following the date of the financial statements included in this quarterly report. We intend to fund operations, working capital and other cash requirements for the twelve-month period subsequent to FebruaryMay 28,31, 2026 through equity financing arrangements and potentially from collaborations or strategic partnerships.