Related Party Transactions

During the six months ended February 28, 2017, the Company incurred, in monthly fees, $64,000 to C.A.B Financial Services (“CAB”) (2016 - $60,000) and to Docherty Management Limited $56,505 (2016 - $55,420). All fees incurred were included as consulting on the Company’s statement of operations. CAB is owned by the CEO of the Company and Docherty Management Ltd. (“Docherty Management”) is owned by the President of the Company.

Pursuant to its agreement with Docherty Management (Note 17), the Company issued 252,000 restricted common shares with a value of $35,760 and cash compensation of $6,240, upon the 18 month contract anniversary between the Company and Docherty Management.

On July 25, 2016, the Company entered into a loan agreement with CAB for a principal amount of $50,000. The term of the loan agreement is 15 months, with an interest free period for the first three months. For the final 12 months, Lexaria is obligated to pay simple interest at the rate of 8% per annum. During the six months ended February 28, 2017, the Company paid $18,000 to CAB as repayment of a portion of the principal and also paid $1,056 in interest.

During fiscal 2016, the Company entered into a advisory agreement with a Company controlled by a director for compensation of $4,000 per month. During the six months ended February 28, 2017, the Company incurred $24,000 in such fees, recorded as consulting on the Company’s statement of operations.

During the six months ended February 29, 2016, the Company incurred $33,424 to BKB Management Ltd, a company owned by the previous CFO of the Company for management, consulting and accounting services and $9,000 to a senior vice president for executive management consulting. Both these agreements were terminated during fiscal 2016.

As at February 28, 2017, $282,615 (August 31, 2016 - $331,371), inclusive of the loan noted above, was payable to related parties. Included in unearned revenue is $4,900 in advance receipts for product sales from a director of the Company (Note 10).

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