As filed with the Securities and Exchange Commission on January 6, 2021

Registration Number 333-250326

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Amendment No. 1

to

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

100 – 740 McCurdy Road

Kelowna, BC Canada V1X 2P7

1-250-765-6424

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Christopher Bunka

Lexaria Bioscience Corp.

#100 – 740 McCurdy Road

Kelowna, British Columbia V1X 2P7

1-250-765-6424

(Name, address, including zip code, and telephone number,

including area code, of agent for service)

Copies to:

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ☐

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

If an emerging growth company, indicate by 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 7(a)(2)(B) of the Securities Act. ☐

CALCULATION OF REGISTRATION FEE

_________________ 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JANUARY 6, 2021

PRELIMINARY PROSPECTUS

1,066,666 Shares of Common Stock

Pre-Funded Warrants to purchase up to  1,066,666 Shares of Common Stock

Warrants to purchase up to  1,066,666  Shares of Common Stock

We are offering for sale 1,066,666 shares of our common stock, par value $0.001 per share. Each share of our common stock is being sold with one warrant to purchase one share of our common stock, at an assumed combined public offering price of $7.50 per share of common stock and related warrant, the closing sale price per share of our common stock on the OTCQX on December 31, 2020, on a post reverse stock split basis, representing a public offering price of $7.499 per share of common stock and $0.001 per related warrant. The warrants are exercisable on the date of issuance and expire on the five year anniversary of such date, at an exercise price per share of common stock equal to $______. The shares of common stock and warrants can only be purchased together in this offering but the shares of common stock and warrants are immediately separable and will be issued separately.

We are also offering to those purchasers, if any, whose purchase of shares of common stock in this offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding common stock immediately following the consummation of this offering, the opportunity to purchase, if the purchaser so chooses, pre-funded warrants in lieu of shares of common stock that would otherwise result in the purchaser’s beneficial ownership exceeding 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding common stock. Each pre-funded warrant is being sold with one warrant to purchase one share of our common stock, at an assumed combined public offering price of $7.499 per pre-funded warrant and related warrant, the closing sale price per share of our common stock on the OTCQX on December 31, 2020, less the $0.001 exercise price of the pre-funded warrant). The exercise price of each pre-funded warrant will equal $0.001per share. Each pre-funded warrant will be exercisable on the date of issuance and will not expire prior to exercise.  The pre-funded warrants and warrants can only be purchased together in this offering, but the pre-funded warrants and warrants are immediately separable and will be issued separately. For each pre-funded warrant we sell, the number of shares of common stock we are offering will be decreased on a one-for-one basis. Because we will issue a warrant for each share of our common stock and for each pre-funded warrant sold in this offering, the number of warrants sold in this offering will not change as a result of a change in the mix of the shares of our common stock and pre-funded warrants sold.

Our common stock is quoted on the OTCQX under the symbol “LXRP” in the United States and trades on the Canadian Securities Exchange (CSE) under the symbol “LXX” in Canada. On January 5, 2021, the closing price per share of our common stock as quoted on the OTCQX was $0.25  per share and as traded on the CSE was CDN$0.33  per share ($7.50 and CDN$9.90, respectively, on a post reverse stock split basis).

We are in the process of applying to have our common stock and warrants sold in this offering listed on the Nasdaq Capital Market (“Nasdaq”) under the symbols “LEXX” and “LEXXW”, respectively. There is no assurance that our listing application will be approved. In connection with our listing application, we will effect the reverse stock split of our common stock at a ratio of 1-for-30. We will not consummate this offering unless our shares of common stock and warrants are approved for listing on Nasdaq. We have not applied to list the warrants on the CSE. After this offering, our common stock will continue to trade on the CSE.

Unless otherwise noted and other than in our financial statements in this registration statement and the notes thereto, the share and per share information in this prospectus reflects the anticipated reverse stock split of the outstanding common stock of the Company at an assumed 1-for-30 ratio, which split will occur concurrently with the pricing of the offering.

The combined public offering price per share (or pre-funded warrant) and related warrant will be determined between us, the underwriters and investors based on market conditions at the time of pricing, and may be at a discount to the current market price of our common stock. Prior to this offering, there has been a limited public market for our common stock on the OTCQX. Therefore, the assumed combined public offering price used throughout this prospectus may not be indicative of the actual combined public offering price.

Investing in our securities involves a high degree of risk. Before buying any securities, you should read the discussion of material risks of investing in our common stock under the heading “Risk Factors” beginning on page 8 of this prospectus.

Neither the Securities and Exchange Commission nor any foreign or state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

(1)  The assumed public offering price and underwriting discounts and commissions correspond to (x) in respect of a share of common stock and related warrant, (i) a public offering price per share of common stock of $7.499 and (ii) a public offering price per warrant of $0.001 and (y) in respect of a pre-funded warrant and related warrant (i) a public offering price per pre-funded warrant of $7.498 and (ii) a public offering price per warrant of $0.001.

(2) We have agreed to pay the representative of the underwriters a management fee equal to 1.0% of the gross proceeds of this offering, to issue to the representative warrants to purchase shares of common stock equal to 8% of the shares issued in this offering (including shares underlying the pre-funded warrants) and to reimburse certain expenses of the representative in connection with this offering. See “Underwriting” beginning on page 83 for additional disclosure regarding the compensation payable to the underwriters.

We have granted the underwriters an option to purchase an additional  159,999 shares of common stock and/or warrants to purchase  159,999 additional shares of common stock from us (being up to 15% of the shares of common stock, including shares of common stock underlying the pre-funded warrants, and/or up to 15% of the warrants sold in this offering), in any combination thereof, at the public offering price per share and public offering price per warrant, respectively, less the underwriting discounts and commissions,  for thirty (30) days from the date of this prospectus.

No shares of common stock, pre-funded warrants or warrants will be offered or sold in Canada, including through the CSE or any other trading market in Canada, in this offering.

Delivery of the shares of common stock, the pre-funded warrants, if any, and the warrants is expected to be made on or about ________, 2021, subject to satisfaction of customary closing conditions.

H.C. WAINWRIGHT & CO.

The date of this prospectus is ________, 2021.

TABLE OF CONTENTS

About This Prospectus

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. The information contained in this prospectus is accurate only as of the date of this prospectus. Our business, financial condition, results of operations and prospects may have changed since such date. Other than as required under the federal securities laws, we undertake no obligation to publicly update or revise such information, whether as a result of new information, future events or any other reason.

The distribution of this prospectus and the offering of our securities in certain jurisdictions may be restricted by law. This prospectus does not constitute, and may not be used in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so to any person to whom it is unlawful to make such offer or solicitation. See the “Underwriting” section of this prospectus beginning on page 83. In this prospectus, references to “the Company,” “we,” “us,” and “our” refer to Lexaria Bioscience Corp. Unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "CDN$" refer to Canadian dollars.

Purchasers of securities hereunder are advised that none of the securities offered hereunder will be qualified for distribution in any jurisdiction of Canada, and may not be traded through the facilities of the CSE or any other Canadian stock exchange, or otherwise in a jurisdiction of Canada. By purchasing securities hereunder, each purchaser thereof will be deemed to have represented and warranted to the Company and the underwriters that such purchaser (i) is acquiring the securities solely for its own account and beneficial interest for investment purposes, and not for sale or with a view to distribution in Canada, and (ii) has no present intention of selling the securities through the facilities of the CSE or any other Canadian stock exchange, or otherwise in a jurisdiction of Canada, and does not presently have any reason to expect a change in such intention.

PROSPECTUS SUMMARY

This summary provides an overview of selected information contained elsewhere in this prospectus and does not contain all of the information you should consider before investing in our securities. You should carefully read this prospectus and the registration statement of which this prospectus is a part in their entirety before investing in our securities, including the information discussed under “Risk Factors” beginning on page 8 and our historical and pro forma financial statements and notes thereto that appear elsewhere in this prospectus.

Business Overview

General and Historical Overview of Our Business

The Company was formed on December 9, 2004 under the laws of the State of Nevada. In March of 2014, the Company began work in the fields of enhanced delivery of active ingredients and drugs. The Company filed its first patent application in 2014 and today has over 50 patent applications pending around the world, with 18 patents granted to date, all related to its DehydraTECH^TM technology (“DehydraTECH” or the “Technology”) and certain characteristics of oral ingredient and drug delivery. Additional early stage investigation has been conducted of topically-administered products such as patches, creams and lotions using DehydraTECH.

The Company’s patent applications developed from its Research and Development programs (“R&D”) which currently include fat-soluble versions of vitamins, NSAIDs, nicotine, cannabinoids, hormones, phosphodiesterase inhibitors, and antivirals.  Our 2018 animal studies demonstrated a propensity for the DehydraTECH technology to elevate the quantity of nicotine delivered across the blood-brain-barrier. The results discovered from our animal studies led to an expansion of our patent applications and opened possibilities for improved delivery of certain central nervous system-targeted drugs that require additional R&D.

In a 12-participant human clinical study performed in 2018 and published in 2019 in a peer reviewed medical journal, Advances in Therapy titled “Examination of a New Delivery Approach for Oral Cannabidiol in Healthy Subjects: A Randomized, Double-Blinded, Placebo-Controlled Pharmacokinetics Study” available on the PubMed.gov website with the identification of PMID: 31512143, the Company demonstrated that its technology delivered higher volumes of cannabidiol into the human circulatory system and did so more quickly than a concentration-matched positive control. This same study also demonstrated a statistically significant reduction in human blood pressure from the DehydraTECH processed cannabidiol, versus no statistical reduction in human blood pressure from the positive control.

In the Company’s most recent animal study conducting research on DehydraTECH within two classes of antiviral therapies (a Protease Inhibitor and a Revers e Transcriptase Inhibitor) which are currently in use against HIV/AIDS and are being investigated for use against SARS-CoV-2/COVID-19, noted improvements in the delivery of the antiviral drugs in the animal bloodstream were demonstrated. The improved delivery of the antivirals along with the animal’s demonstrated safety and tolerability of the DehydraTECH formulations has led the Company to begin preparations for expanded investigations into antiviral drug delivery enhancement and effectiveness and filing additional patent applications.

We operate a Health Canada-licensed laboratory located in Kelowna, British Columbia, Canada to conduct basic research and formulation operations, and typically outsource all analytical work to independent third-party laboratories located in Canada, the USA, and Europe. Such third-party evaluation provides independent assessment of the effects of our technology and processes. We aim to partner with industry leaders for adoption of DehydraTECH into their consumer products and/or drugs. Other than for R&D purposes, the Company does not produce, manufacture, market or distribute drugs.

Our Current Business

Our current business plan is focused on the development of strategic partnerships with licensees for our patented DehydraTECH™ technology in exchange for up front and/or staged licensing fees over time. In addition, we continue to investigate national and international opportunities for development and distribution of the Company’s DehydraTECH enhanced oral and topical product offerings; to investigate expansions and additions to our intellectual property portfolio; and to search for additional opportunities in alternative health sectors. This includes the acquisition or development of intellectual property if and when we believe it is advisable to do so.

Our current patent portfolio includes patent family grants relating to: (i) Food and Beverage Compositions Infused with Lipophilic Active Agents and Methods of Use Thereof; (ii) Methods for Formulating Orally Ingestible Compositions Comprising Lipophilic Active Agents; and (iii) Stable Ready-To-Drink Beverage Compositions Comprising Lipophilic Active Agents, all pertaining to the Company’s method of improving bioavailability and taste, and the use of the Technology as a delivery platform for a wide variety of Active Pharmaceutical Ingredients (“APIs”) including, but not limited to, fat soluble vitamins; NSAIDs pain medications; and nicotine.

We believe that DehydraTECH can deliver nicotine through orally delivered products that would dramatically reduce the incidence of pulmonary diseases caused by smoking. The Company is aggressively pursuing patent protection in various countries around the world. The Company currently has more than 50 patent applications pending worldwide and, due to the complexity of pursuing patent protection, the quantity and status of patent applications will vary continuously as each application advances or stalls in the examination process. We have filed and intend to continue to file new patent applications for new discoveries that arise from our R&D programs however, due to the inherent unpredictability of scientific discovery, it is not possible to predict if or how often such new applications might be filed.

Our Current Business Developments

The Company is currently focused on the development and improvement of DehydraTECH, as well as the licensing of DehydraTECH to companies operating in the nicotine, pharmaceutical, nutraceutical and vitamin industries. The following events represent our current business developments.

On March 19, 2020, the Company announced that it intended to commence a program to conduct tests to research the benefits of DehydraTECH in connection with enhancing the delivery of certain antiviral drugs.

On April 21, 2020, the Company announced the filing of a new US patent application under a new patent family “Compositions and Methods for Enhanced Delivery of Antiviral Agents” to utilize DehydraTECH process in connection with antiviral drugs for the purposes of combatting infectious disease conditions potentially including, but not limited to, the novel coronavirus disease 2019 (“COVID-19”), MERS, SARS, influenza, herpes and AIDS.

On May 4, 2020, the Company entered into agreements with certain investors for the sale of 295,540 shares of common stock and warrants to purchase up to 295,540 shares of common stock for gross proceeds of $2,039,229. The warrants have a five-year term and are exercisable at $10.20 per share. The financing closed in two tranches on May 6, 2020 and May 11, 2020 with $600,000 of the proceeds being allocated towards funding DehydraTECH R&D and patent application filings.

On June 29, 2020, the Company issued 11,574 shares of restricted common stock to IRTH Communications, LLC (“IRTH”) bearing a deemed aggregate value of $100,000 or $8.64 per share as partial compensation for investor relations services to be provided to the Company. In addition, the Company has also agreed to pay IRTH a cash fee of $7,500 per month for the Services and may, at its sole discretion, engage IRTH to provide additional services at additional costs.

On July 21, 2020, the Company announced filing an application with a  national securities exchange in the United States to request an uplisting of the Company’s common stock.

On July 28, 2020, the Company announced that it has received ethics board approval by a European university research hospital to conduct an exploratory clinical study using CBD formulated together with its patented DehydraTECH™ technology to assess blood pressure reduction potential in volunteers with pre- or mildly- hypertensive, middle-aged volunteers.

On August 31, 2020, the Company announced a research and development (“R&D”) framework agreement with British American Tobacco (Investments) Limited (“BAT”) to investigate the Company’s technology for potential use in nicotine products. R&D work under the Agreement will be paid for by BAT.

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

On December 2, 2020, the Company announced that its DehydraTECH technology significantly improved delivery in study animals of representative drugs from two classes of antiviral therapies (a Protease Inhibitor and a Reverse Transcriptase Inhibitor) under investigation against SARS-CoV-2/COVID-19 and already in use against HIV/AIDS. The study animals were not infected with or treated for any diseases. These are the first two of a series of antiviral drugs to be tested using Lexaria’s DehydraTECH technology.

Our Historical Business Developments

Historically, the Company had focused its DehydraTECH R&D on the combination of DehydraTECH with cannabinoids. While the Company has never been involved in the production or cultivation of cannabis, DehydraTECH has been historically licensed to companies that operate in the cannabis industry. Pursuant to this historical business framework, the following events represent the material business developments.

On or around October 21, 2019, the Company submitted an amendment to its Health Canada research license, which was originally granted on August 9, 2019, to allow for human organoleptic sensory testing. The amendment to the license was approved by Health Canada on June 8, 2020 and remains effective until August 9, 2023.

On January 14, 2020, the Company announced that it had entered into a definitive 10-year agreement, via its subsidiary Lexaria Hemp Corp., with Boldt Runners Corporation (dba Cannadips) to provide DehydraTECH on an exclusive basis in the U.S. for use in oral pouches containing CBD and less than 0.29% THC.

On January 22, 2020, the Company announced that it had entered into a definitive 10-year agreement, via its wholly-owned subsidiary Lexaria CanPharm ULC (“CanPharm”), with Trinidad Consulting LLC (dba Cannadips) to license DehydraTECH on an exclusive basis in the U.S. for use in oral pouches containing over 0.3% THC. This license was subsequently assigned to Hill Street Beverage Company Inc. (“Hill Street”) on November 18, 2020 pursuant to the sale of CanPharm’s license to use and sublicense DehydraTECH for use in the production of consumer products containing over 0.3% THC - see Disposition of Certain Assets below.

On February 26, 2020, the Company terminated the agreement, entered into by its subsidiary Lexaria Hemp Corp., to provide DehydraTECH to a Nevada-based private company for its utilization of DehydraTECH in certain CBD-based beverages, due to lack of performance by the licensee.

On November 18, 2020, the Company announced that it had entered into a definitive 10-year agreement, via its subsidiary Lexaria Hemp Corp., with Hill Street to provide DehydraTECH on a non-exclusive global basis for use in multiple CBD-infused products.  This agreement replaces a previous license agreement and joint venture agreement between Lexaria Hemp Corp. and Hill Street as originally announced on July 23, 2019.

On March 4, 2020, the Company announced that it had amended its license agreement with Universal Hemp LLC, a B2B manufacturing company of hemp-derived bulk ingredients, to remove the exclusivity rights originally associated with the license and to reduce the aggregate minimum performance fees from $3,750,000 to $132,500.

Disposition of Certain Assets

The Company is redirecting its business focus away from licensing DehydraTECH to cannabis companies and towards companies that operate in the nicotine, pharmaceutical, nutraceutical and vitamin industries. In order to facilitate this change in business strategy, on November 18, 2020, CanPharm entered into an asset purchase agreement with Hill Street, for the sale of CanPharm’s rights to use and sub-license DehydraTECH with respect to the research, manufacture, assembly, marketing, sale and distribution of cannabis-related products containing 0.3% or greater THC, which includes the assignment of CanPharm’s right as the licensee of DehydraTECH and the assignment of CanPharm’s right as the licensor of third party license agreements with US and Canadian third party cannabis companies that are using or plan to use DehydraTECH within their cannabis-related products (the “CanPharm Asset Sale”). Also included in the sale are SOPs (Standard Operating Procedures), recipes, processes, formulations and techniques. The CanPharm Asset Sale and the transactions contemplated therein closed on December 9, 2020 . As of the closing on December 9, 2020 , the Company and CanPharm no longer have a part or interest in those ongoing revenue streams from the license agreements. As consideration for the assets sold by CanPharm to Hill Street in the CanPharm Asset Sale, Hill Street has (i) paid CanPharm CDN$350,000 on closing, (ii) agreed to issue to CanPharm CDN$1,500,000 of common shares of Hill Street (“Hill Street Shares”), of which 6,031,363 Hill Street Shares valued at CDN$500,000 were issued at closing and the remaining balance shall be issued in two separate tranches of CDN$500,000 on the eight (8) month anniversary and sixteen (16) month anniversary of closing of the CanPharm Asset Sale, respectively, and (iii) issued to CanPharm a promissory note having a principal amount of CDN$2,000,000 and bearing interest at a rate of 10% per annum. The promissory note has no maturity date and is to be paid from licensing and product revenues received by Hill Street from its use or sublicense of DehydraTECH.

Listing on the Nasdaq Capital Market

Our common stock is currently quoted on the OTCQX and trades on the CSE. In connection with this offering, we are in the process of applying to have our shares of common stock and warrants sold in this offering listed on Nasdaq under the symbols “LEXX” and “LEXXW”, respectively. If our listing application is approved, we expect to list our common stock and warrants on the Nasdaq upon consummation of the offering, at which time our common stock will cease to be quoted on the OTCQX. Nasdaq’s listing requirements include, among other things, a minimum stock price requirement. As a result, on or  prior to effective date of the registration statement for this offering, we will be required to take the necessary steps to meet the Nasdaq’s listing requirements, including but not limited to a reverse split of our outstanding common stock. If Nasdaq does not approve the listing of our common stock and warrants, we will not consummate this offering. There can be no assurance that our common stock and warrants will be listed on Nasdaq. We have not applied to list the warrants on the CSE. After this offering, our common stock will continue to trade on th e CSE.

Reverse Stock Split

On June 23, 2020, our stockholders approved a reverse stock split within the range of 1-for-2 to 1-for-30 of our issued and outstanding shares of common stock and authorized the board of directors (the “Board”), in its discretion, to determine the final ratio, effective date, and date of filing of the certificate of amendment to our articles of incorporation in connection with the reverse stock split. The purpose of the reverse stock split is to meet Nasdaq’s minimum stock price requirement. The reverse stock split will not change the number of authorized shares of common stock which will remain at 220,000,000 shares. Unless otherwise noted, the share and per share information in this prospectus reflects, other than in our financial statements and the notes thereto,  an anticipated reverse stock split of the outstanding common stock of the Company at an assumed 1-for-30 ratio which  will occur concurrently with the pricing of the offering.

Impact of COVID-19

The presence of COVID-19 in over 220 countries around the world presents significant and unforecastable new risks to the Company and its business plan. Restrictions on national and international travel, and required business closures, have made it increasingly difficult to carry out normal business activities related to corporate finance efforts and customer acquisition. As a result, the COVID-19 pandemic will almost certainly increase risks of lower revenues and higher losses for the products and services currently offered by the Company. We are monitoring our licensees and are working with them, where possible, to prevent contract default and contract terminations. In some cases, we, in accordance with the relevant governing agreements, have issued termination of contract notices to some of our licensees. These terminations have resulted in $50,000 in write offs of accounts receivable for the year ended August 31, 2020.

The Company is encountering significant challenges in executing its business plan and normal business operations as a result of COVID-19 and does not currently have sufficient resources to withstand a protracted term during which most business activities are curtailed. We have implemented cost containment initiatives to reduce operating expenses and preserve cash that include dismissal of one employee, termination of contracts with two consultants and reduction of compensation payable to certain other consultants as a result of the COVID-19 pandemic. We have not had to close operations or locations as our contractors and staff can work remotely and our third-party fulfillment centers continue to operate.

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

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

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

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

Corporate Information

Our common stock is quoted on the OTCQX under the symbol “LXRP” and trades on the CSE under the symbol “LXX”.

Our principal executive offices are located at #100 – 740 McCurdy Road, Kelowna, British Columbia V1X 2P7, and our telephone number is +1 (250) 765-6424. We have administrative functions located in Phoenix, Arizona. Our main corporate website is located at www.lexariabioscience.com. The information on our website is not incorporated by reference into this prospectus.

Due to the implementation of British Columbia Instrument 51-509 on September 30, 2008, by the British Columbia Securities Commission (“BCSC”), we are considered a British Columbia based reporting issuer. As such, we are required to file certain information and documents at www.sedar.com.

The Offering

(1) The number of shares of common stock that will be outstanding after this offering set forth above is based upon 3,001,477 shares of common stock outstanding as of January 4, 2021, and gives effect to our planned reverse stock split at an assumed ratio of 1-for-30, but does not include, as of that date:

RISK FACTORS

You should carefully consider the risks described below as well as other information provided to you in this document, including information in the section of this document entitled “Forward Looking Statements”. If any of the following risks actually occur, our business, financial condition or results of operations could be materially adversely affected, the value of our common stock could decline, and you may lose all or part of your investment.

Risks Related to Our Current Business

Much of the information included herein 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.

In developing DehydraTECH, we rely upon our employees, contractors, consultants and collaborators and other third-party relationships, including the ability to obtain appropriate product liability insurance. There can be no assurance that this reliance and these relationships will continue as required. In addition to developmental and operational considerations, market prices for securities of biotechnology companies generally are volatile and may or may not move in a manner consistent with the progress we have made or are making. Prospects for companies in the biotechnology industry generally may be regarded as uncertain given the nature of the industry and, accordingly, investments in biotechnology companies should be regarded as speculative.

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

There can be no assurance that we will achieve significant revenues or profitable operations or will generate adequate funds to continue our intellectual property development. Many factors (e.g. competition, patent protection, appropriate regulatory approvals) can influence the revenue and our profitability potential. We cannot be sure that our overall business model within any particular sector will ever come to fruition, and if they do, will not decline over time. We may not recover all or any portion of our capital investment in our research and technology development, marketing, or other aspects of the business. Although we exercise due consideration in our development of our technology, ultimately consumer acceptance of our licensees’ products is not reliably forecastable.

In addition, our intellectual property and technology development plans may be curtailed, delayed or cancelled as a result of lack of adequate capital and other factors, such as weather, pandemics, compliance with governmental regulations, current and forecasted prices for input costs of research materials and changes in the estimates of costs to complete the projects. You should understand that our research plans are subject to change.

Our revenues are primarily generated from our out-licensing of DehydraTECH. We should be considered a start-up: the gross revenue recognized for the period ended August 31, 2020 was $384,543.

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

Our Company operates in highly competitive marketplaces, such as the nicotine, pharmaceutical and CBD industries, respectively, with various competitors. Increased competition may result in reduced licensing rates and/or loss of market share, either of which would seriously harm its business and results of operations. Management cannot be certain that the Company will be able to compete against current or future competitors or that competitive pressure will not seriously harm its business. Some of our Company’s competitors are much larger and have greater access to capital, sales, marketing and other resources. These competitors may be able to respond more rapidly to new regulations or devote greater resources to the development and promotion of their business model than the Company can. Furthermore, some of these competitors may make acquisitions or establish co-operative relationships among themselves or with third-parties in the industry to increase their ability to rapidly gain market share.

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

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

If we are unable to hire and retain key personnel, we may not be able to implement our business plan.

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

Our Company has a limited operating history and an evolving business model, which raises doubt about our ability to achieve profitability or obtain future financing.

Our Company has a minimal history of operations and our business model is still evolving and subject to change. Our revenues are dependant mostly upon licensing DehydraTECH and on those third-party licensees generating usage fees by successfully selling products utilizing DehydraTECH. Our licensees may also be subject to regulatory approval of their products that utilize DehydraTECH, which may not occur before they can bring their products to market and we generate usage licensing revenues from them.

Our Company’s ability to continue as a going concern is dependent upon our ability to obtain adequate financing and/or to reach profitable levels of operations. In that regard, we have no proven history of performance, earnings or success. There can be no assurance that we will achieve profitability or obtain future financing.

Our auditors have indicated doubt about our ability to continue as a going concern.

We have suffered recurring losses from operations. The continuation of our Company as a going concern is dependent upon our Company attaining and maintaining profitable operations and/or raising additional capital. Our financial statements do not include any adjustment relating to the recovery and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should our Company discontinue operations. The recurring losses from operations and net capital deficiency raise substantial doubt about the Company’s ability to continue as a going concern. Our independent registered public accounting firm issued a report dated October 14, 2020 in connection with the audit of our financial statements as of September 30, 2020, which included an explanatory paragraph describing the existence of conditions that raise substantial doubt about our ability to continue as a going concern. In addition, the notes to our financial statements for the year ended September 30, 2020, included in our Annual Report on Form 10-K filed with the Commission on October 15, 2020, contain a disclosure describing the existence of conditions that raise substantial doubt about our ability to continue as a going concern.

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

Our operating results will be affected by a wide variety of factors that could materially affect revenues and profitability, including the timing and cancellation of customer orders and projects, competitive pressures on pricing, availability of personnel, and market acceptance of our services. As a result, we may experience material fluctuations in future operating results on a quarterly and annual basis which could materially affect our business, financial condition and operating results.

Results of earlier studies may not be predictive of future results and planned or ongoing studies may not establish an adequate efficacy profile for DehydraTECH enabled products.

To date, DehydraTECH has been studied only with CBD, nicotine and, preclinically, with limited antiviral drugs as potential active pharmaceutical ingredients (“APIs”). The results of these studies and trials of DehydraTECH and future studies may not be predictive of the results of subsequent trials incorporating these or other APIs. Studies published to date on DehydraTECH have demonstrated positive results through oral and topical delivery of CBD and oral delivery of nicotine and the antiviral drug therapies Darunavir and Efavirenz, though in preclinical capacities. These results may not be replicated in subsequent, expanded studies or trials that incorporate the same or other API payloads, such as alternative therapies for COVID-19.

Licensees subject to significant regulatory requirements and testing protocols, such as those required by the US Food and Drug Administration (“FDA”), and comparable foreign regulators, must successfully complete multi-phase testing and the results of our studies may not be reflected in the outcome of the testing performed related to their products. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier studies, and we cannot be certain that our licensees will not face similar setbacks.

We rely on third-party manufacturers and suppliers and we intend to rely on third parties to produce preclinical and clinical supplies of active pharmaceutical ingredients, or APIs, including CBD.

We rely on third parties to supply the materials for, and manufacture, our research and development, preclinical and clinical trial APIs. We do not own manufacturing facilities or supply sources for such components and materials. There can be no assurance that our supply of research and development, preclinical and clinical development drugs and other materials will not be limited, interrupted, restricted in certain geographic regions or of satisfactory quality or continue to be available at acceptable prices. In particular, any replacement of our API manufacturer could require significant effort and expertise because there may be a limited number of qualified manufacturers.

The manufacturing process for the APIs we use, including CBD, are subject to FDA, DEA and other regulatory authority review. Suppliers and manufacturers must meet applicable manufacturing requirements and undergo rigorous facility and process validation tests required by regulatory authorities in order to comply with regulatory standards such as cGMP. In addition, our manufacturers must ensure therapeutic consistency among batches, including preclinical, clinical and, if approved, marketing batches. Demonstrating such consistency may require typical manufacturing controls as well as clinical data. Our manufacturers must also ensure that our batches conform to complex release specifications. Further, manufacturers of controlled substances must obtain and maintain necessary DEA and state registrations and registrations with applicable foreign regulatory authorities, and must establish and maintain processes to ensure compliance with DEA and state requirements and requirements of applicable foreign regulatory authorities governing, among other things, the storage, handling, security, recordkeeping and reporting for controlled substances. In the event that any of our suppliers or manufacturers fails to comply with such requirements or to perform its obligations to us in relation to quality, timing or otherwise, or if our supply of components or other materials becomes limited or interrupted for other reasons, we may be forced to enter into an agreement with another third party, which we may not be able to do on reasonable terms, if at all. In some cases, the technical skills or technology required to manufacture the APIs may be unique or proprietary to the original manufacturer and we may have difficulty, or there may be contractual restrictions prohibiting us from, transferring such skills or technology to another third party and a feasible alternative may not exist. These factors would increase our reliance on such manufacturer or require us to obtain a license from such manufacturer in order to have another third party manufacture our clinical trial products. If we are required to change manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines. The delays associated with the verification of a new manufacturer could negatively affect our ability to develop product candidates in a timely manner or within budget.

We expect to continue to rely on third-party manufacturers. To the extent that we have existing, or enter into future, manufacturing arrangements with third parties, we will depend on these third parties to perform their obligations in a timely manner consistent with contractual and regulatory requirements, including those related to quality control and assurance. If we are unable to obtain or maintain third-party manufacturing for product candidates, or to do so on commercially reasonable terms, we may not be able to develop and commercialize our Technology successfully. Our or a third party’s failure to execute on our manufacturing requirements could adversely affect our business in a number of ways, including:

If our commercial partners fail to obtain FDA authorization to market their products that use our Technology as tobacco products, they will be unable to commercialize this potential product in the U.S.

There can be no assurance that any Premarket Tobacco Product Application (“PMTA”) submitted to FDA by our commercial partners utilizing our Technology will be authorized by the FDA. In addition, there can be no assurance that all necessary approvals will be granted for their potential tobacco products or that review or actions will not involve delays caused by requests for additional information or testing that could adversely affect the time and cost to market and sell their potential tobacco products.

The development, testing, manufacturing, and marketing of their potential tobacco products are subject to extensive regulation by governmental authorities in the United States. In particular, the process of obtaining authorization by the FDA is costly and time consuming, and the time required for such authorizations is uncertain. Any PMTA must undergo an extensive regulatory authorization process mandated by the FDA.

The FDA could force the removal of our products from the U.S. market.

The FDA has broad authority over the regulation of tobacco products. The FDA could, among other things, force our commercial partners to remove from the U.S. market their tobacco products even after the FDA authorization of any future PMTA, as well as the FDA could levy fines or change their regulations on advertising. Any adverse action by the FDA could have a material adverse impact on our business.

Any product candidates that receive regulatory approval will be subject to ongoing and continued regulatory review, which may result in significant expense and limit our ability to commercialize such products.

For any product candidates containing controlled substances, we and our commercial partners will be subject to ongoing DEA regulatory obligations, including, among other things, annual registration renewal, security, recordkeeping, theft and loss reporting, periodic inspection and annual quota allotments for the raw material for commercial production of our products. In addition, manufacturers of drug products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP and other regulations. If we, our commercial partners or the manufacturing facilities for product candidates using our Technology fail to comply with applicable regulatory requirements, a regulatory agency may:

The FDA's regulations, policies or guidance may change and new or additional statutes or government regulations may be enacted that could prevent or delay regulatory approval of our product candidates or further restrict or regulate post-approval activities. We cannot predict the likelihood, nature or extent of adverse government regulation that may arise from pending or future legislation or administrative action. If we or are commercial partners are not able to achieve and maintain regulatory compliance, drugs using the Technology may not be marketed, which would adversely affect our ability to generate revenue and achieve or maintain profitability.

Intellectual property and technology development involves a lengthy and expensive process, with an uncertain outcome. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, all of the research and development for all industry segments.

We may experience delays in initiating or completing our planned studies or trials in the future, and we may experience numerous unforeseen events during, or as a result of, any future studies or trials that we conduct that could delay or prevent our ability to conduct the research, including:

We could encounter delays if a study or trial is suspended or terminated by us or by the IRBs of the institutions in which they are being conducted. Such authorities may impose such a suspension or termination due to a number of factors, including changes in governmental regulations or administrative actions or lack of adequate funding to continue the study or trial. Further, the IRB may disagree with our design or may change the requirements for approval even after it has reviewed and commented on the design.

Our research and development costs will also increase if we experience delays in testing or regulatory approvals. We do not know whether any of our studies or trials will begin as planned, will need to be restructured or will be completed on schedule, or at all. Any delays in our development programs may significantly harm our business, prospects, financial condition and results of operations.

The longer-term growth of our business depends on our ability to expand our portfolio of patents and industry segments where DehydraTech is demonstrably applicable, which may require substantial financial resources and may ultimately be unsuccessful.

The longer-term growth of our business depends upon our ability to expand our patent portfolio of applicable APIs and molecules and delivery methods. We may also be required to evidence that DehydraTECH’s demonstrated efficacy also works with other APIs and molecules prior to acceptance and adoption within those segments. The required research and development programs required to develop the evidence may require substantial financial resources and may ultimately be unsuccessful.

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

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

Conflicts of interest between our Company and our independent directors and executive management may result in a loss of business opportunity.

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

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

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

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

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

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

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

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

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

The COVID-19 pandemic may have a negative impact on our business.

The emergence of COVID-19 around the world presents significant and unforecastable risk to the Company and its business plan. Restrictions on national and international travel, and required business closures, have made it increasingly difficult to carry out normal business activities related to corporate finance efforts, to the pursuit of new customers for the Company’s products and services, and to retail customers throughout North America who might otherwise access the products of the Company’s business-to-business partners. As a result, the COVID-19 pandemic will almost certainly increase risks of lower revenues and higher losses for the Company. We are monitoring our licensees and are working with them, where possible, to prevent default and contract terminations. In some cases, we, in accordance with the relevant governing agreements, have issued termination of contract notices to some of our licensees. These terminations resulted in $50,000 in write offs of accounts receivable.

As a result of COVID-19, the Company is encountering significant challenges in executing its business plan and normal business operations and does not have sufficient resources to withstand a protracted term during which most business activities are curtailed. In addition, we have implemented cost containment initiatives to reduce operating expenses and preserve cash such as dismissal of one employee, termination of contracts with two consultants and reduction of compensation payable to certain other consultants. We may need to dismiss additional employees or terminate services contracts in order to preserve resources. We have not had to close operations or locations as our contractors and staff can work remotely and our third-party fulfillment centers continue to operate.

The Company may not be able to monetize any opportunities related to the COVID-19 outbreak.

The Company is currently investigating whether there may be any emerging opportunities resulting from the COVID-19 crisis for its patented DehydraTECH technology that has been tested for its delivery of other compounds and drugs including CBD and nicotine, and whether the apparent benefits of DehydraTECH, namely increased bioavailability, enhanced intestinal tolerability and biliary functionality might be applicable to compounds or drugs used to treat symptoms caused by COVID-19. This investigation is in the very early stages with an initial animal study (as noted below) having been completed with demonstrated improvements in antiviral drug delivery. On March 19, 2020, the Company announced that it intends to conduct a pilot human pharmacokinetic exploratory study in healthy volunteers of three antiviral drugs that have previously been studied against other coronavirus strains, comparing DehydraTECH formulations to controls without DehydraTECH enhancement. Subsequent to March 19, 2020, the Internal Review Board (“IRB”) of one of the universities advised us to limit the study to two of the original antiviral drugs. Based on the requirements of the IRB we have modified the study to two antiviral drugs. We intend to conduct the study at a leading Canadian university to which we have already submitted a study design and plan and from which we have already received ethics board approval. The study, however, remains subject to further government regulatory approval. The Company is currently in the process of pursuing the necessary steps to file for study approval from Canadian federal regulators.

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

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

DehydraTECH has never been approved for the treatment of disease.

In order for a licensee to commercialize a product that utilizes DehydraTECH for the treatment of any disease, they must obtain regulatory approvals for their product of such treatment for that indication. Satisfying regulatory requirements is an expensive process that typically takes many years and involves compliance with requirements covering research and development, testing, manufacturing, quality control, labeling, and promotion of drugs for human use. To obtain necessary regulatory approvals, a licensee must, among other requirements, complete clinical trials demonstrating that their product is safe and effective for a particular indication. There can be no assurance that their product enhanced by DehydraTECH will prove to be safe and effective, that the clinical trials will demonstrate the necessary safety and effectiveness of the product candidates, or that a licensee will succeed in obtaining regulatory approval for any treatment developed even if such safety and effectiveness are demonstrated.

Any delays or difficulties encountered in such clinical trials may delay or preclude regulatory approval from the FDA or from international regulatory organizations. Any delay or preclusion of regulatory approval would be expected to delay or preclude the commercialization of their product that utilizes DehydraTECH. Examples of delays or difficulties that may be encountered during clinical trials include without limitation the following:

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 approval.

Delays or rejections in the regulatory approval process because of additional government regulation resulting from future legislation or administrative action, or from changes in the policies of the FDA or other regulatory bodies during the period of product development, clinical trials, or regulatory review may occur. Failure to comply with applicable regulatory requirements may result in criminal prosecution, civil penalties, recall or seizure of products, total or partial suspension of production, or an injunction preventing certain activity, as well as other regulatory action against our product candidates or us.

Our success is dependent on our licensees’ ability to successfully navigate the risks and obstacles associated with obtaining FDA approval for any DehydraTECH enhanced formulation of their product.

We have relied, and will rely in the future, on third parties to conduct our studies and trials. If these third parties do not appropriately carry out their contractual obligations, fail to conduct high-quality trials in compliance with regulations or meet expected deadlines, our research programs may be delayed or could fail to develop required data.

We do not have the ability to conduct our studies or trials independently. We have and will continue to rely on third parties, including third-party facilities, participants and consultants, to monitor, manage data for, participate in and execute our ongoing planned research protocols. Any failure of these third parties to meet their contractual or regulatory obligations may have an adverse effect on the results of our studies or trials.

The third parties conducting our studies or trials on our behalf are not our employees, and except for remedies available to us under our agreements with such contractors, we cannot control whether or not they devote sufficient time, skill and resources to our programs. To the extent we are unable to identify and successfully manage the performance of third-party service providers in the future, our business may be adversely affected. If these third parties do not successfully carry out their contractual obligations or meet expected deadlines, or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our protocols, regulatory requirements or for other reasons, our studies or trials may be extended, delayed or terminated and we may not be able to obtain, or may be delayed in obtaining, appropriate research data. As a result, our results of operations could be harmed, our costs could increase and our ability to generate revenues could be delayed or impaired for the API or molecule under research.

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

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

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

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

Our head office and the majority of our assets are located in Kelowna, British Columbia and we rent administrative office space in Phoenix, Arizona. In addition, a majority of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons’ assets are located outside the United States. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against our Company or our officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof.

Risks Associated with our Intellectual Property

Our failure to protect our intellectual property may have a material adverse effect on our ability to develop and license DehydraTECH.

Because patents involve complex legal and factual questions, the issuance, scope, validity, and enforceability of patents cannot be predicted with certainty.

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

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

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

If we are unable to obtain and maintain sufficient patent protection, or if the scope of the patent protection is not sufficiently broad, our competitors could develop technology similar to ours.

Our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries with respect to our intellectual property. If we do not adequately protect or enforce our intellectual property, competitors may be able to erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability. To protect our intellectual property, we file patent applications in the United States and abroad. The patent application and examination process is expensive, complex and time-consuming. We may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.

We may become involved in lawsuits to protect or enforce our patents and other intellectual property rights, which could be expensive, time consuming and unsuccessful.

Competitors and other third parties may infringe, misappropriate or otherwise violate our patents and other intellectual property rights. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time consuming and divert the time and attention of our management, business and scientific personnel. In addition, many of our adversaries in these proceedings may have the ability to dedicate substantially greater resources to prosecuting these legal actions than we can.

A court may disagree with our allegations and may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the third-party technology in question. Furthermore, the other party could counterclaim that we infringe their intellectual property or counterclaim that a patent we have asserted against them is invalid or unenforceable, or both. In patent litigation in the United States, counterclaims challenging the validity, enforceability or scope of asserted patents are commonplace. Similarly, third parties may initiate legal proceedings against us seeking a declaration that certain of our intellectual property rights are non-infringed, invalid, or unenforceable. The outcome of any such proceeding is generally unpredictable.

We may not be able to effectively enforce our intellectual property rights throughout the world.

Filing, prosecuting and defending patents in all countries throughout the world would be prohibitively expensive. Our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws. Additionally, the patent laws of some foreign countries do not provide protection to the same extent as the laws of the United States. This could make it difficult for us to stop the infringement of our patents or the misappropriation of our intellectual property rights. Legal actions to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and resources from other aspects of our business. While we intend to protect our intellectual property, we do not expect that we will be able to initiate or maintain legal efforts in all jurisdictions.

Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

The United States Patent and Trademark Office (“USPTO”) and various foreign governmental patent agencies require compliance with their procedural, documentary, fee payment and other provisions during the patent application process. Periodic maintenance fees on issued patents often must be paid to the USPTO and foreign patent agencies over the lifetime of each patent. While an unintentional lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. If we fail to maintain the patents and patent applications covering our intellectual property, we may not be able to stop a competitor from utilizing our Technology, which would have a material adverse effect on our business.

Risks Related to CPG/Oral Products

Even if we develop food, consumer packaged goods (“CPG”) or intellectual property-based products or revenue streams, the potential profitability of each depends upon factors beyond the control of the Company.

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

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

Food, CPG and hemp products are subject to regulation which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on our company.

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

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

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

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

We currently have very few customers. We will require new customers and/or business partners in order to sustain our operations and attempt to achieve profitability.

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

Often, both new and established oral product and CPG product companies fail to generate consumer interest on a regular basis. There is no assurance that any oral product or CPG product that we market will be successfully adopted by consumers or will still be in demand at a future time. If we cannot develop and sell products in commercial quantities, our business could fail.

The oral product and CPG industries are highly competitive and there is no assurance that we will be successful in developing or successfully selling products.

The oral product and CPG industries are intensely competitive. We compete with numerous entities, including many oral product manufacturing and production companies, which have substantially greater technical, financial and operational resources and staff. Accordingly, there is a high degree of competition for desirable distribution channels, “shelf space” and salespeople in both the oral product and CPG industries. We cannot predict if the necessary funds can be raised to assist in our development of any distribution channels that may be helpful to our ability to generate sales and potential profits.

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

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

We are not the “operator” of vertically integrated oral product production facilities, and so we are exposed to the risks of our third-party operators.

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

Our management has limited experience and training in the oral product processing and manufacturing industries, and in the hemp products industries, and could make decisions that negatively impact our licensee operations and our Company.

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

The Farm Bill, FDA policies and other regulations materially affect our CBD products and Licensees

In conjunction with the enactment of the Agriculture Improvement Act of 2018 (the “Farm Bill”), the FDA released a statement about the status of CBD as a nutritional supplement, and the agency’s actions in the short term with regards to CBD will guide the industry. We will strive to comply with all guidelines and regulations as they evolve. The regulation of CBD products is currently in constant flux and any difficulties in compliance with future government regulation could increase our operating costs and adversely impact our results of operations in future periods. Furthermore, violations of these laws, or alleged violations, could disrupt our business or the business of our licensees and result in a material adverse effect on our operations. In addition, we cannot predict the nature of any future laws, regulations, interpretations or applications, and it is possible that regulations may be enacted in the future that will be directly applicable to our business.

We do not currently believe that we are required to seek FDA approval for DehydraTECH independent of any drug, CPG, oral product, or other product in the industries in which are involved, and as such we do not plan to seek FDA approval. If regulation evolves such that we are required to seek approval, we will endeavor to do so. This may require us to incur substantial costs associated with legal and compliance fees and adversely affect our results of operations.

Possible yet unanticipated changes in federal and state law could cause products containing hemp-derived CBD oil to be illegal, or could otherwise prohibit, limit or restrict the commercialization of any Technology-enhanced products containing CBD.

While we are currently winding down our distribution of Lexaria branded products containing hemp-derived CBD, we have licensees who produce and distribute hemp-derived CBD products that are enhanced with DehydraTECH.

The Farm Bill delegates the authority to the states to regulate and limit the production of hemp and hemp-derived products within their territories. Although many states have adopted laws and regulations that allow for the production and sale of hemp and hemp-derived products under certain circumstances, no assurance can be given that such state laws may not be repealed or amended such that our intended products containing hemp-derived CBD would once again be deemed illegal under the laws of one or more states now permitting such products, which in turn would render such intended products illegal in those states under federal law even if the federal law is unchanged. In the event of either repeal of federal or of state laws and regulations, or of amendments thereto that are adverse to our or our licensee’s products, we may be adversely impacted with respect to CBD product revenue or royalties.

Sources of hemp-derived CBD depend upon legality of cultivation, processing, marketing and sales of products derived from those plants under state law.

Hemp-derived CBD can only be legally produced in states that have laws and regulations that allow for such production and that comply with the Farm Bill. We purchase all of our hemp-derived CBD from licensed growers and processors in states where such production is legal. As described in the immediately above risk factor, possible yet unanticipated changes in federal and state law could cause any of our current products that we are ending production of and which  contain hemp-derived CBD oil, to be illegal or could otherwise prohibit, limit or restrict any of our products containing CBD in the event of repeal or amendment of laws and regulations which are now favorable to the hemp industry in such states, we would be required to locate new suppliers in states with laws and regulations that qualify under the Farm Bill. If we were to be unsuccessful in arranging new sources of supply of our raw ingredients, or if our raw ingredients were to become legally unavailable, our intended business plan with respect to such products could be adversely impacted.

Because our distributors may only sell and ship our products containing hemp-derived CBD in states that have adopted laws and regulations qualifying under the Farm Bill, a reduction in the number of states having such qualifying laws and regulations could limit, restrict or otherwise preclude the sale of intended products containing hemp-derived CBD.

The interstate shipment of hemp-derived CBD from one state to another is legal only where both states have laws and regulations that allow for the production and sale of such products and that qualify under the Farm Bill. Therefore, the marketing and sale of our intended products containing hemp-derived CBD is limited by such factors and is restricted to such states. Although we believe we may lawfully sell any of our finished products, including those containing CBD, in a majority of states, a repeal or adverse amendment of laws and regulations that are now favorable to the distribution, marketing and sale of finished products we intend to sell could significantly limit, restrict or prevent us from generating revenue related to our products that contain hemp-derived CBD. Any such repeal or adverse amendment of now favorable laws and regulations could have an adverse impact on our business plan with respect to such products.

Due to recent expansion into the CBD, nicotine and pharmaceutical industries, we may have a difficult time obtaining the various insurances that are desired to operate our business, which may expose us to additional risk and financial liability.

Insurance that is otherwise readily available, such as general liability, and directors and officer’s insurance, may become more difficult for us to find, and more expensive, due to our sale of products containing hemp-derived CBD (which we are discontinuing), our research into alternative nicotine delivery methods and enhanced delivery of pharmaceutical compounds. There are no guarantees that we will be able to find such insurances in the future, or that the cost will be affordable to us. If we are forced to go without such insurances, it may prevent us from entering into certain business sectors, may inhibit our growth, and may expose us to additional risk and financial liabilities.

Changing consumer preferences may cause DehydraTECH enhanced products to be unsuccessful in the marketplace.

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

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

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

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

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

Risks Associated with our Historical Business Practices

The Company is a research and development company that has expended its efforts on improving and licensing DehydraTECH to third parties for use in their commercial consumer products. Historically, licensees of DehydraTECH have used DehydraTECH to enhance their cannabis related products. In order to evidence the effectiveness of DehydraTECH for the purposes of obtaining new licensees, the Company has directly produced certain consumer products containing hemp-derived CBD and containing less than 0.29% THC. The production and distribution of these products is not a business focus of the Company and the Company is currently winding down the production and distribution of such DehydraTECH enhanced hemp-derived CBD products. In addition, the Company, via its subsidiary CanPharm, has recently disposed of its ability to use or sublicense DehydraTECH with consumer products containing 0.3% or greater of THC, except in very limited circumstances and only outside of the United States and Canada . While the business focus of the Company is moving away from cannabis and CBD related products, and moving towards the use of DehydraTECH for the purposes of oral nicotine and pharmaceutical product development, the Company may be subject to regulatory liability for its past business practices with respect to the licensing of DehydraTECH to licensees who produce consumer products containing greater than 0.3% THC and/or for its historical production and distribution of CBD consumer products and the continued sale of outstanding inventory of CBD consumer products, which have not received FDA approval. We cannot predict whether any regulatory body may make a claim against the Company and if so whether the Company will have the financial resources to pay any imposed fines and/or to defend itself against such claim. Below are some of the risk factors attributed to our historical business practices.

Unethical business practices of licensees who use DehydraTECH may compromise the growth and development of our business.

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

Because cannabis is a controlled substance in some regulatory jurisdictions, our former third-party licensee’s operations may be subject to regulatory actions.

The Company and its subsidiaries are not involved directly or indirectly in the cultivation, processing, distribution, or utilization of cannabis or cannabis derived components. All of the Company’s historically produced consumer products utilized legally sourced hemp and hemp components in their production. The Company has historically licensed its intellectual property to licensees that may utilize DehydraTECH in the production of products that contain contents which are locally or state approved but federally controlled. Where licensee’s products contain controlled contents any revenue streams from such licensee’s may be interrupted by regulatory involvement in their business.

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

Cannabis remains illegal under U.S. federal law, and any change in the enforcement priorities of the federal government could negatively impact our current business operations.

We do not currently, nor at any time in our corporate history have we ever cultivated, grown, processed, manufactured or sold marijuana in any location. Although we believe this fact to provide protection against prosecution under marijuana legislation, we cannot provide any assurance to that effect. Historically, we have licensed DehydraTECH to entities who used DehydraTECH in connection with the production of products containing THC. All though these licensees had valid licenses in various North American jurisdictions to sell cannabis related products, we cannot guarantee that those historical business practices will not result in enforcement against the Company in the future.

The United States federal government regulates drugs through the Controlled Substances Act (the “CSA”), which places controlled substances, including cannabis, on one of five schedules. Cannabis is currently classified as a Schedule I controlled substance, which is viewed as having a high potential for abuse and having no currently accepted medical use in treatment in the United States. No prescriptions may be written for Schedule I substances, and such substances are subject to production quotas imposed by the United States Drug Enforcement Administration (the “DEA”). Because of this, doctors may not prescribe cannabis for medical use under federal law, although they can recommend its use under the First Amendment.

Over 38 US States, including our state of incorporation, Nevada, have approved and regulate medical marijuana use. Similarly, eleven states and Washington D.C. have approved and regulate non-medical marijuana use by adults. Because cannabis is a Schedule I controlled substance, however, the development of a legal cannabis industry under the laws of these states is in conflict with the CSA, which makes cannabis use and possession illegal on a national level. The United States Supreme Court has confirmed that the federal government has the right to regulate and criminalize cannabis, including for medical purposes, and that federal law criminalizing the use of cannabis pre-empts state laws that legalize its use.

While we do not harvest, distribute, sell cannabis, or cannabis derived products, we may be irreparably harmed by the enforcement policies of the federal government. As of the date of this prospectus, we have disposed of our license to utilize DehydraTECH with cannabis that contains 0.3% or greater THC, however, pursuant to our historical business, and the license of our Technology to licensees in the U.S. cannabis industry , there is a potent ial that these historical business practices could be deemed to be aiding and abetting illegal activities, a violation of federal law.

Risks Associated with Our Common Stock

There has been no consistent active trading market for our common stock, and public trading of our common stock may continue to fluctuate substantially.

There has never been a consistent active trading market for our common stock. Our common stock is currently quoted on the OTCQX under the symbol “LXRP” and trades on the CSE under the symbol “LXX”. We plan on listing our common stock and warrants on Nasdaq under the symbols “LEXX” and “LEXXW”, respectively. There is no assurance that the trading market for our common stock and warrants will become more active or liquid. Furthermore, there can be no assurance any market maker will be interested in trading our stock. Therefore, it may be difficult to sell your shares of common stock or warrants if you desire or need to sell them. Our underwriters are not obligated to make a market in our securities, and even if they make a market, they can discontinue market making at any time without notice. Neither we nor the underwriters can provide any assurance that an active and liquid trading market in our securities will develop or, if developed, that such market will continue.

Moreover, the trading price of our common stock has fluctuated substantially over the past few years, and there remains a significant risk that our common stock price may continue to fluctuate substantially in the future in response to various factors, including any material variations in our periodic operating results, departures or additions of management or other key personnel, announcements of acquisitions, mergers, share consolidations, or new technology or patents, new product developments, significant litigation matters, gain or loss of significant licensees, significant capital transactions, substantial sales of our common stock in our trading market, and general and specific market and economic conditions.

Our stock price may be volatile, which could result in substantial losses to investors and litigation.

In addition to changes to market prices based on our results of operations and the factors discussed elsewhere in this “Risk Factors” section, the market price of and trading volume for our common stock may change for a variety of other reasons, not necessarily related to our actual operating performance. The capital markets have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock. In addition, the average daily trading volume of the securities of small companies can be very low, which may contribute to future volatility. Factors that could cause the market price of our common stock to fluctuate significantly include:

Any of these factors, as well as broader market and industry factors, may result in large and sudden changes in the trading volume of our common stock and could seriously harm the market price of our common stock, regardless of our operating performance. This may prevent you from being able to sell your shares at or above the price you paid for your shares of our common stock, if at all. In addition, following periods of volatility in the market price of a company’s securities, stockholders often institute securities class action litigation against that company. Our involvement in any class action suit or other legal proceeding could divert our senior management’s attention and could adversely affect our business, financial condition, results of operations and prospects.

A large number of shares may be issued and subsequently sold upon the exercise of existing warrants.

As of August 31, 2020, there were 471,605 shares of common stock issuable under outstanding warrants at various exercise prices, this was subsequently reduced to 439,094 shares of common stock issuable under outstanding warrants due to the expiry of 32,511 warrants on October 31, 2020. To the extent that holders of existing warrants sell the shares of common stock issued upon the exercise of warrants, the market price of our common stock may decrease due to the additional selling pressure in the market. The risk of dilution from issuances of shares of common stock underlying existing warrants may cause shareholders to sell their common stock, which could further contribute to any decline in the market price.

We are a “smaller reporting company” under the SEC’s disclosure rules and have elected to comply with the reduced disclosure requirements applicable to smaller reporting companies.

We are a “smaller reporting company” under the SEC’s disclosure rules, meaning that we have either:

As a smaller reporting company, we are permitted to comply with scaled-back disclosure obligations in our SEC filings compared to other issuers, including with respect to disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We have elected to adopt the accommodations available to smaller reporting companies. Until we cease to be a smaller reporting company, the scaled-back disclosure in our SEC filings will result in less information about our company being available than for other public companies.

If investors consider our common stock less attractive as a result of our election to use the scaled-back disclosure permitted for smaller reporting companies, there may be a less active trading market for our common stock and our share price may be more volatile.

As a non-accelerated filer, we are not required to comply with the auditor attestation requirements of the Sarbanes-Oxley Act.

We are a non-accelerated filer under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and we are not required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002. Therefore, our internal controls over financial reporting will not receive the level of review provided by the process relating to the auditor attestation included in annual reports of issuers that are subject to the auditor attestation requirements. In addition, we cannot predict if investors will find our common stock less attractive because we are not required to comply with the auditor attestation requirements. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and trading price for our common stock may be negatively affected.

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

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

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

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

Investors seeking dividend income should not invest in our shares.

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

We are authorized to issue up to 220,000,000 shares. Our Board has the authority to approve additional share issuances within our authorized share capital without consent of any of our stockholders. Consequently, our stockholders may experience more dilution in their ownership of our Company in the future.

Assuming our securities are listed on Nasdaq, we will incur materially increased costs and become subject to additional regulations and requirements.

As a newly exchange-listed public company, we will incur material additional legal, accounting and other expenses including recruiting and retaining qualified independent directors, payment of annual exchange fees, and satisfying the continued listing standards for Nasdaq. If our common stock and warrants are listed on Nasdaq, we must meet certain financial and liquidity criteria to maintain such listing. If we fail to meet any of Nasdaq’s listing standards, our securities may be delisted. In addition, our Board may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing. A delisting of our securities from Nasdaq may materially impair our stockholders’ ability to buy and sell our securities and could have an adverse effect on the market price of, and the efficiency of the trading market for, our securities. The delisting of our securities could significantly impair our ability to raise capital and the value of your investment.

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

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

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

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

Risks Related to this Offering and our Reverse Stock Split

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds, including for any of the purposes described in the section of this prospectus entitled “Use of Proceeds.” You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the net proceeds are being used appropriately. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our securities to decline and delay the development of our product candidates. Pending the application of these funds, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

You will experience immediate and substantial dilution in the net tangible book value of the shares you purchase in this offering and may experience additional dilution in the future.

The combined public offering price per share of common stock and related warrant, and the combined public offering price of each pre-funded warrant and related warrant, will be substantially higher than the as adjusted net tangible book value per share of our common stock after giving effect to this offering. Assuming the sale of 1,066,666 shares of our common stock and warrants to purchase up to 1,066,666 shares of common stock at an assumed combined public offering price of $7.50 per share and related warrant, the closing sale price per share of our common stock on the OTCQX on  December 31, 2020, on a post reverse split basis, assuming no sale of any pre-funded warrants in this offering, no exercise of the warrants being offered in this offering and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us, you will incur immediate dilution of approximately $5.31 per share. As a result of the dilution to investors purchasing securities in this offering, investors may receive significantly less than the purchase price paid in this offering, if anything, in the event of the liquidation of our company. See the section entitled “Dilution” below for a more detailed discussion of the dilution you will incur if you participate in this offering. To the extent shares are issued under outstanding options and warrants at exercise prices lower than the public offering price of our common stock in this offering, you will incur further dilution.

There is no public market for the pre-funded warrants being offered by us in this offering.

There is no established public trading market for the pre-funded warrants, and we do not expect a market to develop. In addition, we do not intend to apply to list the pre-funded warrants on any national securities exchange or other nationally recognized trading system. Without an active market, the liquidity of the pre-funded warrants will be limited.

Holders of the warrants offered hereby will have no rights as common stockholders with respect to the shares our common stock underlying the warrants until such holders exercise their warrants and acquire our common stock, except as otherwise provided in the warrants.

Until holders of the warrants and the pre-funded warrants acquire shares of our common stock upon exercise thereof, such holders will have no rights with respect to the shares of our common stock underlying such warrants, except to the extent that holders of such warrants will have certain rights to participate in distributions or dividends paid on our common stock as set forth in the warrants. Upon exercise of the warrants and the pre-funded warrants, the holders will be entitled to exercise the rights of a common stockholder only as to matters for which the record date occurs after the exercise date.

Even if the reverse stock split achieves the requisite increase in the market price of our common stock for listing of our securities on Nasdaq, we cannot assure you that we will be able to continue to comply with the minimum bid price requirement of Nasdaq.

Even if the reverse stock split achieves the requisite increase in the market price of our common stock to be in compliance with the minimum bid price for listing of our securities on the Nasdaq, there can be no assurance that the market price of our common stock following the reverse stock split will remain at the level required for continuing compliance with that requirement. It is not uncommon for the market price of a company’s common stock to decline in the period following a reverse stock split. If the market price of our common stock declines following the effectuation of the reverse stock split, the percentage decline may be greater than would occur in the absence of a reverse stock split. In any event, other factors unrelated to the number of shares of our common stock outstanding, such as negative financial or operational results, could adversely affect the market price of our common stock and jeopardize our ability to meet or maintain the Nasdaq’s minimum bid price requirement.

Even if the reverse stock split increases the market price of our common stock and we meet the initial listing requirements of Nasdaq, there can be no assurance that we will be able to comply with the continued listing standards of Nasdaq, a failure of which could result in a de-listing of our common stock.

Nasdaq requires that the trading price of its listed stocks remain above one dollar in order for the stock to remain listed. If a listed stock trades below one dollar for more than 30 consecutive trading days, then it is subject to delisting from Nasdaq. In addition, to maintain a listing on Nasdaq, we must satisfy minimum financial and other continued listing requirements and standards, including those regarding director independence and independent committee requirements, minimum stockholders’ equity, and certain corporate governance requirements. If we are unable to satisfy these requirements or standards, we could be subject to delisting, which would have a negative effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so. In the event of a delisting, we would expect to take actions to restore our compliance with the listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the minimum bid price requirement, or prevent future non-compliance with the listing requirements.

The reverse stock split may decrease the liquidity of the shares of our common stock.

The liquidity of the shares of our common stock may be affected adversely by the reverse stock split given the reduced number of shares that will be outstanding following the reverse stock split, especially if the market price of our common stock does not increase as a result of the reverse stock split. In addition, the reverse stock split may increase the number of shareholders who own odd lots (less than 100 shares) of our common stock, creating the potential for such shareholders to experience an increase in the cost of selling their shares and greater difficulty effecting such sales.

Following the reverse stock split, the resulting market price of our common stock may not attract new investors, including institutional investors, and may not satisfy the investing requirements of those investors. Consequently, the trading liquidity of our common stock may not improve.

Although we believe that a higher market price of our common stock may help generate greater or broader investor interest, there can be no assurance that the reverse stock split will result in a share price that will attract new investors, including institutional investors. In addition, there can be no assurance that the market price of our common stock will satisfy the investing requirements of those investors. As a result, the trading liquidity of our common stock may not necessarily improve.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Forward-looking statements involve risks and uncertainties and include statements regarding, among other things, our projected revenue growth and profitability, our growth strategies and opportunity, anticipated trends in our market and our anticipated needs for working capital. They are generally identifiable by use of the words “may,” “will,” “should,” “anticipate,” “estimate,” “plans,” “potential,” “projects,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend” or the negative of these words or other variations on these words or comparable terminology. These statements may be found under the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” as well as in this prospectus generally. In particular, these include statements relating to future actions, prospective products, market acceptance, future performance or results of current and anticipated products, sales efforts, expenses, and the outcome of contingencies such as legal proceedings and financial results.

Examples of forward-looking statements in this prospectus include, but are not limited to, our expectations regarding our business strategy, business prospects, operating results, operating expenses, working capital, liquidity and capital expenditure requirements. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding demand for our products, the cost, terms and availability of components, pricing levels, the timing and cost of capital expenditures, competitive conditions and general economic conditions. These statements are based on our management’s expectations, beliefs and assumptions concerning future events affecting us, which in turn are based on currently available information. These assumptions could prove inaccurate. Although we believe that the estimates and projections reflected in the forward-looking statements are reasonable, our expectations may prove to be incorrect.

Important factors that could cause actual results to differ materially from the results and events anticipated or implied by such forward-looking statements include, but are not limited to:

We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all of those risks, nor can we assess the impact of all of those risks on our business or the extent to which any factor may cause actual results to differ materially from those contained in any forward-looking statement. The forward-looking statements in this prospectus are based on assumptions management believes are reasonable. However, due to the uncertainties associated with forward-looking statements, you should not place undue reliance on any forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and unless required by law, we expressly disclaim any obligation or undertaking to publicly update any of them in light of new information, future events, or otherwise.

USE OF PROCEEDS

We estimate that the net proceeds from this offering will be approximately $6,863,093 ($7,995,093 if the underwriters exercise their option to purchase additional securities in full), assuming a combined public offering price per share of common stock and related warrant of $7.50, the closing sale price per share of our common stock on the OTCQX on  December 31, 2020, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us, and assuming no sale of any fixed combinations of pre-funded warrants and warrants offered hereunder. If the warrants are exercised in full for cash, the estimated net proceeds will increase to $18,863,085(or $21,795,074 if the underwriters’ option to purchase additional securities is exercised in full).

We currently expect to use approximately $2,560,000 of the net proceeds of this offering ($3,700,000 if the underwriters exercise their option to purchase additional securities in full) for research and development studies and the patent and legal costs associated thereto, with the remaining net proceeds to be used for general working capital purposes.  If certain investors in our May 2020 private placement participate in this offering, we will pay 8% of the gross proceeds received from these investors to the placement agent for the May 2020 private placement offering.  

MARKET FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS

Market Price for our Common Stock

Our common stock was quoted on the OTCBB and its predecessors under the symbol “LXRA” and then, subsequent to June 2009, under the symbol “LXRP”. On January 4, 2018, the Company’s shares of common stock commenced quotation on the OTCQX. Quotations on the OTCQX reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. Since October 28, 2009, our common stock has been traded on the Canadian Securities Exchange (CSE) and its predecessors, under the symbol “LXX.”

Holders

As of January 4, 2021 there were approximately  53 stockholders of record holding  3,001,477 shares of our common stock. This number does not include an indeterminate number of stockholders whose shares are held by brokers in street name. The holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Holders of our common stock have no preemptive rights and no right to convert their common stock into any other securities. There are no redemption or sinking fund provisions applicable to our common stock.

Dividend Policy

We have never paid any cash dividends on our common stock and do not anticipate paying any cash dividends on our common stock in the foreseeable future. We intend to retain future earnings to fund ongoing operations and future capital requirements of our business. Any future determination to pay cash dividends will be at the discretion of our Board and will be dependent upon our financial condition, results of operations, capital requirements and such other factors as our Board deems relevant. Our ability to pay cash dividends is subject to limitations imposed by state law.

CAPITALIZATION

The following table sets forth our capitalization as of August 31, 2020:

You should consider this table in conjunction with “Use of Proceeds” above as well as our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the notes to those financial statements for year ended August 31, 2020 included elsewhere in this prospectus.

(1) Refers to the CanPharm Asset Sale, which occurred on November 18, 2020 and closed on December 9, 2020 . As of the closing on December 9, 2020 , the Company and CanPharm have no part or interest in those ongoing revenue streams from the license agreements.  Pursuant to the CanPharm Asset Sale, CanPharm received CDN$350,000 in cash at closing . Additionally, Hill Street has agreed to issue to CanPharm CDN$1.5 million of Hill Street Shares over 3 milestone tranches, of which 6,031,363 Hill Street Shares (equal in value to CDN$500,000) were issued to CanPharm at closing, as well as a CDN$2 million promissory note included at its nominal value ($NIL) that bears interest at 10% per annum and is repayable in quarterly installments based on 5% of Hill Street’s gross revenues derived from products utilizing the intellectual property until fully paid.

(2) A 50% increase or decrease in the assumed combined public offering price per share of common stock and related warrant would increase or decrease each of cash, common stock and additional paid-in capital, total stockholders’ equity and total capitalization on an as adjusted basis by approximately $3.76 million, assuming that the number of shares, pre-funded warrants and warrants offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. An increase or decrease of  50% in the number of shares of common stock (or common stock underlying pre-funded warrants) and related warrants offered by us, as set forth on the cover page of this prospectus, would increase or decrease each of cash, common stock and additional paid-in capital, total stockholders’ equity and total capitalization on an as adjusted basis by approximately $ 3.6 million, assuming no change in the assumed combined public offering price per share of common stock and related warrant after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

The above discussion and table are based on 90,044,312 pre-split shares outstanding as of August 31, 2020, 3,001,477 as adjusted, and actual numbers do not give effect to our planned reverse stock split. The discussion and table do not include, as of that date:

DILUTION

If you invest in our common stock in this offering, your ownership interest will be diluted immediately to the extent of the difference between the assumed combined public offering price per share of common stock and related warrant and as adjusted, net tangible book value per share of common stock immediately after this offering.

Our net tangible book value is the amount of our total tangible assets less our total liabilities. Our net tangible book value as of August 31, 2020 was $2,063,338, or $0.69 per share of common stock. After giving effect to the assumed sale of  1,066,666  shares of our common stock and warrants to purchase up to  1,066,666  shares of common stock at an assumed combined public offering price of $7.50  per share and related warrant, the closing sale price per share of our common stock on the OTCQX on December 31, 2020, assuming no sale of any pre-funded warrants in this offering, no exercise of the warrants being offered in this offering and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us, our as adjusted, net tangible book value per share as of August 31, 2020, would have been approximately $8,926,093, or approximately $2.19 per share. This represents an immediate increase in net tangible book value per share of $1.50 to existing stockholders and an immediate dilution of approximately $5.31 per share to new investors purchasing shares of our common stock in this offering.

Dilution per share to new investors is determined by subtracting the as adjusted, net tangible book value per share after this offering from the combined public offering price per share and related warrant paid by new investors.

The following table illustrates this per share dilution:

A 50% increase (decrease) in the assumed combined public offering price per share of common stock and related warrant would increase (decrease) the as adjusted, net tangible book value per share by $1.11 ($0.89), and the dilution per share to new investors in this offering by $4.20($6.20), assuming the number of common stock, pre-funded warrants and warrants offered by us, as set forth on the cover page of this prospectus, remain the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

Conversely, a decrease of  50%  in the number of shares of common stock (or common stock underlying pre-funded warrants) and related warrants offered by us, as set forth on the cover page of this prospectus, would decrease the as adjusted, net tangible book value by approximately $0.70  per share and increase the dilution to investors participating in this offering by approximately $0.70  per share, assuming the assumed combined public offering price per share of common stock and related warrant remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

The information above assumes that the underwriters do not exercise their option to purchase additional securities. If the underwriters exercise their option to purchase additional securities in full, the as adjusted, net tangible book value will increase to $2.80 per share, representing an immediate increase to existing stockholders of $2.11 per share and an immediate dilution of $5.39 per share to new investors.

The foregoing discussion and table do not take into account further dilution to new investors that could occur upon the exercise of outstanding warrants having a per share exercise or conversion price less than the per share offering price to the public in this offering.

We may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.

The above discussion and table are based on 90,044,312 pre-split shares outstanding as of August 31, 2020, without giving effect to our planned reverse stock split, and 3,001,477 as adjusted for the reverse stock split at an assumed 1-for-30 ratio. The discussion and table do not include, as of that date:

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

The following unaudited pro forma combined financial statements were prepared by applying certain pro forma adjustments to the historical financial statements of the Company. The pro forma adjustments give effect to the CanPharm Asset Sale.

The unaudited pro forma combined statements of operations for our fiscal years ended August 31, 2020 and 2019, respectively, give effect to the CanPharm Asset Sale as if it had occurred on September 1, of each period.

These pro forma combined financial statements include adjustments for the CanPharm Asset Sale which closed on December 9, 2020, assuming our public offering price is $7.50  per share and related  warrant.

We determined that the CanPharm Asset Sale, considering the guidance in Rule 11-01 (b) of Regulation S-X, met the significance test of Rule 3-05 of Regulation S-X.

These unaudited pro forma combined financial statements do not purport to represent what our results of operations or financial condition would have been had the CanPharm Asset Sale actually occurred on the assumed dates, nor do they purport to project our results of operations or financial condition for any future period or future date. You should read these unaudited pro forma combined financial statements in conjunction with “Capitalization,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the historical financial statements, including the related notes thereto, appearing elsewhere in this prospectus.

The following table includes (i) summary consolidated statement of operations data for the years ended August 31, 2020 and 2019 and (ii) summary consolidated balance sheet data as of August 31, 2020 and August 31, 2019 (unaudited), derived from our audited consolidated financial statements and related notes included elsewhere in this prospectus. Our financial statements are prepared and presented in accordance with generally accepted accounting principles in the United States. The results indicated below are not necessarily indicative of our future performance.

You should read this information together with the sections entitled “Capitalization”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.