SEC Form PRE 14A filed by Lexaria Bioscience Corp.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

November 27, 2024

Dear Shareholder:

We are pleased to invite you to our 2025 annual shareholder meeting to be held on January 14, 2025, via Event Conferencing.  We strongly recommend that you vote by proxy (pursuant to the instructions contained in your proxy form) or attend our 2025 annual shareholder meeting by way of joining our Event Conferencing session via the following number:   for Toronto residents (416) 764-8658 or toll-free at 1-888-886-7786.  You will be provided with an opportunity to vote on the proposals contained in the attached proxy circular at the event conferencing session.  The proxy materials are first being made available to our shareholders on or about November 27, 2024.  The meeting will begin promptly at 1:00 p.m. PT.

In order to facilitate clear communications, all participants will be placed in lecture mode and will have their microphones muted.  We welcome any questions that you may have regarding the proposals and encourage you to email them to the Company in advance of the meeting.  Please provide your questions to our Head of Legal, Vanessa Carle at [email protected] as we will only have time to answer questions on proposals that are submitted in advance and a maximum of two (2) questions per proposal during the Meeting.  When we come to each proposal that requires a vote, we will have the moderator provide instructions on the process for asking questions for the purposes of discussion on the proposal.  Once the questions have been responded to, the moderator will provide instructions on the method of voting on the proposal.

In addition to the matters described in the Notice of Annual and Special Meeting of Shareholders and the Proxy Statement, we will be conducting a question and answer session after the termination of the meeting (the “Q & A Session”) regarding Lexaria’s strategic business plan and the status of its research study programs, all as initially outlined in the Company’s strategic letter issued on September 5, 2024 and available at https://ir.lexariabioscience.com/news-events/press-releases/detail/266/lexaria-releases-strategic-letter-from-the-outgoing-ceo.  The Q & A Session will entail the Chief Executive Officer answering questions that were submitted in advance of the Meeting; it should be noted that no new questions will be taken from attendees during the Q & A session.  We strongly desire the opportunity to address any questions that you might have, so in order to ensure that we are able to address as many general questions as possible, we encourage you to forward your questions in advance of the meeting by emailing our Head of Legal, Vanessa Carle at [email protected] who will then ensure that they are answered at the end of the meeting. 

I look forward to meeting with you and sharing our Company’s updates.    

Sincerely,

/s/ Richard Christopher

Richard Christopher

Chief Executive Officer

LEXARIA BIOSCIENCE CORP.

100 – 740 McCurdy Road

Kelowna, BC, Canada V1X 2P7

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON JANUARY 14, 2025

NOTICE IS HEREBY GIVEN that Lexaria Bioscience Corp., a Nevada corporation (“Lexaria”, “Company”, “we”, “us”, or “our”), will hold an Annual and Special Meeting of shareholders (the “Meeting”) via Event Conferencing (the call in number for Toronto residents is (416) 764-8658 or toll-free at 1-888-886-7786) whereby the Chief Executive Officer of the Company will conduct the formal business of the meeting from the Company’s head office located at Unit 100 – 740 McCurdy Road, Kelowna, BC, Canada, V1X 2P7, at 1:00 p.m. (PT), on Tuesday, January 14, 2025 for the following purposes:

Our Board of Directors has fixed the close of business on November 18, 2024, as the record date (the “Record Date”) for the determination of the shareholders entitled to notice of, and to vote at, the Meeting or any adjournment thereof. Only the shareholders of record on the Record Date are entitled to vote at the Meeting.

Whether or not you plan on attending the Meeting, we ask that you vote by proxy by following instructions provided in your proxy card as promptly as possible. If your shares are held of record by a broker, bank, or other nominee, please follow the voting instructions sent to you by your broker, bank, or other nominee in order to vote your shares.

Sincerely,

By Order of the Board of Directors

Date: November 27, 2024

Important Notice Regarding Availability of Proxy Materials for the Stockholders’ Meeting To Be Held on January 14, 2025.  This notice of meeting, the proxy statement for the meeting and our Annual Report on Form 10-K for the fiscal year ended August 31, 2024, are available at www.colonialstock.com/LEXX2025.  The proxy materials are first being made available to our shareholders on or about November 27, 2024.

TABLE OF CONTENTS

LEXARIA BIOSCIENCE CORP.

100 – 740 McCurdy Road

Kelowna, BC, Canada V1X 2P7

Telephone:  (250) 765-6424

PROXY STATEMENT

ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON JANUARY 14, 2025

GENERAL INFORMATION ABOUT THE MEETING OF SHAREHOLDERS

The Board of Directors of Lexaria Bioscience Corp. (“Lexaria”, “we”, “us” or “our”) is soliciting proxies for use at the Annual and Special Meeting of Shareholders to be held via Event Conferencing by way of calling:  for Toronto residents (416) 764-8658; and for all others 1-888-886-7786, at 1:00 p.m. (PT), on Tuesday, January 14, 2025 or at any adjournment of the Annual and Special Meeting (the “Meeting”).

This proxy statement, the attached notice of the Meeting, a proxy card and our Annual Report on Form 10-K for the year ended August 31, 2024, as filed with the Securities and Exchange Commission on November 22, 2024 are collectively referred to as the “proxy materials”.  The proxy materials are first being made available to our shareholders on or about November 27, 2024.

Important Notice Regarding the Internet Availability of Proxy Materials

for the Meeting to be Held on January 14, 2025

All shareholders have the ability to access the proxy materials on the website referred to in the attached Notice of Annual and Special Meeting.  Pursuant to rules adopted by the U.S. Securities Exchange Commission (the “SEC”), we have elected to send a Notice of Internet Availability of Proxy Materials (the “Notice”) to our shareholders instead of mailing printed copies of the proxy materials, unless you have previously elected to receive printed materials.  The Notice provides instructions on how to access the proxy materials via the internet and how to request a printed set of the proxy materials at no charge.  In addition, the stockholders can elect to receive future proxy materials electronically by email or in printed form by mail, and any such election will remain in effect until terminated by the shareholder.  We encourage all shareholders to take advantage of the proxy materials on the internet to help reduce the cost and environmental impact of our shareholder meetings.

The proxy materials are also available at www.colonialstock.com/LEXX2025 and www.lexariabioscience.com.

What items will be voted at the Meeting?

Our shareholders will vote:

We urge you to carefully read and consider the information contained in this proxy statement. We request that you cast your vote on each of the proposals described in this proxy statement. As noted, attendance at the Meeting will be by Event Conferencing and accordingly, only votes cast by registered shareholders attending the Meeting and from validly completed and delivered proxies will be counted.  Please follow the instructions provided in the proxy card sent to you.

How does the Board recommend I vote on the proposals?

Our Board recommends that you vote “FOR” the election of each Director nominee noted under proposal 1 and “FOR” all of the proposals noted under items 2 – 6.

Who can vote at the Meeting?

Our Board of Directors has fixed the close of business on November 18, 2024, as the Record Date for the determination of the shareholders entitled to notice of, and to vote at, the Meeting or any adjournment. If you were a shareholder of record on the Record Date, you are entitled to vote at the Meeting.

As of the Record Date, 17,452,594, shares of our common stock were issued and outstanding and no other voting securities were issued and outstanding. Therefore, a total of 17,452,594 votes are entitled to be cast at the Meeting.

How many votes do you have?

On each proposal to be voted upon, you have one vote for each share of our common shares that you owned on the Record Date. There is no cumulative voting.

How can you Vote?

If you hold shares in your own name as a stockholder of record:  Common shares can be voted at our Meeting by way of a proxy over the internet or by telephone by following the instructions in the Notice and/or proxy card, or, if you requested to receive printed proxy materials, you may vote by marking, dating and signing the enclosed proxy card and returning it to the address provided.  Additionally, you may vote your shares by way of attending the Meeting via Event Conferencing and calling into the toll free line at 1-888-886-7786 or if you reside in Toronto, at 416-764-8658 and voting by way of selecting the appropriate option for each proposal.  Shareholders voting by internet or telephone should understand that, while we and the party providing the service through which you may vote by internet or by telephone do not charge any fees to our shareholders for voting in such manner, there may be usage charges from the internet access providers and telephone companies for which you are responsible.

If your shares are held in the name of a stock brokerage account or by a bank, or other nominee (that is, in “street name”):  You will receive instructions from the holder of record that you must follow for your shares to be voted.  The availability of telephonic or internet voting will depend on your broker’s (or other nominee’s) voting process.  Please check with your broker or other nominee and follow the voting procedure your broker or other nominee provides to vote your shares.  If you wish to vote in person via attending the Event Conference Meeting, you must request a legal proxy from your broker or other nominee that holds your shares and email that proxy and proof of identification 48 hours prior to the Meeting to Vanessa Carle, Head of Legal at [email protected].   

YOUR VOTE IS VERY IMPORTANT.  We are encouraging our shareholders to vote by proxy even if you plan to attend the Meeting via Event Conferencing and to appoint the nominees noted in our proxy, namely Richard Christopher, our Chief Executive Officer, or John Docherty, our President, to represent such shareholder at our Meeting.

Valid proxies will be voted at our Meeting and at any postponements or adjournments thereof as you direct in the proxy, provided that they are received at least 48 hours (excluding Saturdays, Sundays and statutory holidays) prior to the scheduled time of the Meeting, or any adjournment thereof.

The common shares represented by the proxy will be voted, or withheld from voting, as directed in the proxy.  If no direction is given and the proxy is validly executed, the proxy will be voted: (1) FOR the election of the nominees for our Board of Directors; (2) FOR the approval and ratification of the appointment of MaloneBailey LLP as our Company’s auditors for the 2025 fiscal year and the approval to allow the Directors to set the remuneration; (3) FOR the approval, on a non-binding advisory basis, of the compensation of our named executive officers; (4) FOR the approval, on a non-binding advisory basis, of the frequency for approving compensation of our named executive officers to be made every three years; (5) FOR the approval of the Warrant Exercise Proposal, namely the issuance of aggregate 4,608,209 share purchase warrants entitling the holders thereof to purchase up to 4,551,019 shares of common stock at an exercise price of $3.06 per share and up to 57,190 shares of common stock at an exercise price of $3.825 per share; and (6) FOR the ratification and approval of all lawful acts of the Directors. 

If any other matters properly come before our Meeting, the persons authorized under the proxies will vote upon such other matters in accordance with their best judgment, pursuant to the discretionary authority conferred by the proxy.

Quorum

A quorum of shareholders is necessary to take action at our Meeting.  Currently, the holders of at least 33.33% of our issued shares entitled to vote as at the Record Date, present in person (via Event Conferencing) or by proxy, shall constitute a quorum for the transaction of business at our Meeting.  However, if a quorum is not present, then the holders of a majority of the common shares of our Company who are present at the Meeting, in person (via Event Conferencing) or by proxy, may adjourn such meeting from time to time until it is determined that holders constituting the required quorum of the issued common shares of the capital stock shall attend.  At any such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the original meeting.  Broker non-votes occur when a nominee holding common shares for a beneficial owner of those common shares has not received voting instructions from the beneficial owner with respect to a particular matter and such nominee does not possess or choose to exercise discretionary authority with respect thereto.  Broker non-votes and abstentions will be included in the determination of the number of common shares present at our Meeting for quorum purposes but neither broker non-votes nor abstentions will be counted as votes cast on any matter presented at our Meeting.

YOUR VOTE IS IMPORTANT. ACCORDINGLY, YOU ARE ASKED TO COMPLETE AND RETURN YOUR PROXY PURSUANT TO ONE OF THE METHODS AVAILABLE WHETHER OR NOT YOU PLAN TO ATTEND OUR MEETING VIA EVENT CONFERENCING. 

Dissenting Shareholder Rights

Dissenting shareholders have no appraisal rights under Nevada law or under our Articles of Incorporation or bylaws in connection with the matters to be voted on at the Meeting.

What does it mean if I receive more than one proxy card?

If you receive more than one proxy card, it means that you hold shares registered in more than one name or in different accounts. To ensure that all of your shares are voted, please vote by proxy by following instructions provided in each proxy card. If some of your shares are held in “street name,” you should have received voting instructions with these materials from your broker, bank or other nominee. Please follow the voting instructions provided to ensure that your vote is counted.

What vote is required for the election of Directors or for the approval of a proposal?

The vote of a simple majority of our stock held by shareholders present in person or represented by proxy and entitled to vote at the Meeting will be sufficient to elect Directors. For the election of Directors, the nominees who receive more “For” votes than the “Withheld” votes, will be elected as Directors. There is no cumulative voting in the election of Directors.

The vote of a simple majority of our stock held by shareholders present in person or represented by proxy and entitled to vote at the Meeting will be sufficient to ratify the appointment of MaloneBailey LLP as our independent registered public accounting firm for the fiscal year ending August 31, 2025 and to allow Directors to set the remuneration.

The vote of a simple majority of our stock held by shareholders present in person or represented by proxy and entitled to vote at the Meeting will be sufficient to approve on a non-binding, advisory basis, the compensation of our named executive officers.

The vote of a simple majority of our stock held by shareholders present in person or represented by proxy and entitled to vote at the Meeting will be sufficient to approve on a non-binding advisory basis, of the frequency for approving compensation of our named executive officers.

The vote of a simple majority of our stock held by shareholders present in person or represented by proxy and entitled to vote at the Meeting will be sufficient to approve the issuance of aggregate 4,608,209 share purchase warrants entitling the holders thereof to purchase up to 4,551,019 shares at an exercise price of $3.06 per share and up to 57,190 shares at an exercise price of $3.825 per share.

The vote of a simple majority of our stock held by shareholders present in person or represented by proxy and entitled to vote at the Meeting will be sufficient to ratify and approve all lawful acts of the Directors effected since the last shareholder meeting.

Counting of Votes

All votes will be tabulated by Vanessa Carle, the Company’s Secretary who will serve as the inspector of elections appointed for the Meeting, and in that capacity will separately tabulate affirmative and negative votes and abstentions. Shares represented by proxies that reflect an abstention or broker “non-vote” will be counted as present and entitled to vote for purposes of determining a quorum.  Abstentions and a broker “non-vote” will be treated as not-voted for purposes of determining approval of a proposal and will not be counted as “for” or “against” that proposal.  A broker “non-vote” occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary authority or does not have instructions from the beneficial owner.

Can I change my vote after submitting my proxy?

Yes. You may revoke your proxy and change your vote at any time before the final vote at the Meeting. If you are a shareholder of record, you may vote again on a later date via the Internet or by telephone (only your latest Internet or telephone proxy submitted prior to the Meeting will be counted) or by signing and returning a new proxy card with a later date. You may also request that your prior proxy be revoked by delivering to our Company, at the address on the Notice of Meeting, Attention: Secretary, a written notice of revocation prior to the Meeting being held at the offices of Lexaria.  Any revocation of proxy or later dated proxy MUST BE RECEIVED by 9:00 a.m. PT prior to the commencement of the Meeting.

If you hold your shares in street name, you will need to follow the voting instructions provided by your broker, bank or other nominee regarding how to revoke or change your vote.

How can I attend the Event Conferencing Meeting?

You may call (416) 764-8658 if you live in Toronto, Ontario, otherwise you can call toll-free at 1-888-886-7786 if you wish to participate in the Event Conferencing Meeting to hear the business of the Meeting, to vote on the proposals and to listen to the question and answer session.  A limited amount of questions will be allowed to be submitted on the proposals to be voted on during the Meeting.

You will be asked to provide your name, and if different, the name that your shares are registered under, the number of shares you hold as well as an email address, should we need to follow up with you regarding any unanswered questions.  

How can I ask questions?

We welcome the opportunity to respond to your questions and encourage you to email any questions that you may have regarding the proposals to the Company in advance of the Meeting.  Please provide your questions to our Head of Legal, Vanessa Carle at [email protected] as we will only have time to answer questions on proposals that are submitted in advance and a maximum of two (2) questions per proposal during the Meeting.  When we come to each proposal that requires a vote, we will have the moderator provide instructions on the process for asking questions for the purposes of discussion on the proposal.  Once the questions have been responded to, the moderator will provide instructions on the method of voting on the proposal.

In addition to the matters described in the Notice of Annual and Special Meeting of Shareholders and the Proxy Statement, we will be conducting a question and answer session after the termination of the meeting (the “Q & A Session”).  The Q & A Session will entail the Chief Executive Officer answering questions that were submitted in advance of the Meeting; it should be noted that no new questions will be taken from attendees during the Q & A session.  In order to ensure that we are able to address as many general questions as possible, we encourage you to forward your questions in advance of the meeting by emailing our Head of Legal, Vanessa Carle at [email protected] who will then ensure that they are answered at the end of the Meeting.

How do I Access Technical Support?

If you are having difficulties connecting to the Meeting, you can access technical support by emailing [email protected].  If you are having difficulties hearing or participating during the Meeting, you can access technical support by the above-noted email or by pressing “0” for immediate support.

Who pays for the cost of proxy preparation and solicitation?

We will pay for the cost of proxy preparation and solicitation, including the reasonable charges and expenses of brokers, banks or other nominees for forwarding proxy materials to street name holders.

We are soliciting proxies for use at our Event Conferencing Meeting primarily by mail. In addition, our Directors, officers and regular employees may solicit proxies by telephone, facsimile, mail, other means of communication or personally. These individuals will receive no additional compensation for such services. We will ask brokers, banks, and other nominees to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. We will reimburse them for their reasonable charges and expenses, however we will not be paying for delivery to OBOs.

Voting Securities and Principal Holders Thereof

We are authorized to issue 220,000,000 common shares with full voting rights and a par value of $0.001 per share.  As of the Record Date a total of 17,452,594 common shares were issued and outstanding.  Each share of common stock carries the right to one vote at the Meeting. 

Only registered shareholders as of the Record Date are entitled to receive notice of, and to attend and vote at, the Meeting or any adjournment or postponement of the Meeting.

To the best of our knowledge, no person or company beneficially owns, directly or indirectly, or exercises control or direction over, common shares carrying more than 10% of the voting rights attached to the outstanding common shares of our Company other than set forth in the section “Security Ownership of Certain Beneficial Owners and Management” below.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth, as of the Record Date, certain information with respect to the beneficial ownership of our common shares by each shareholder known by us to be the beneficial owner of more than 5% of our common shares, as well as by each of our current Directors and executive officers as a group. Each person has sole voting and investment power with respect to the common shares, except as otherwise indicated. Beneficial ownership consists of a direct interest in the common shares, except as otherwise indicated.

* denotes a holding of less than 1%

Notes:

Changes in Control

We are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change in control of our Company.

DIRECTOR NOMINEES

The following information pertains to our Director Nominees for the purposes of voting on Proposal 1 located at page 28 and includes the name, age, positions held, length of time serving as a director of Lexaria and business experience of each nominee:

Board Diversity

The Company and its management are highly supportive of the initiatives taken by the Securities and Exchange Commission and the Nasdaq Group to encourage diversity within the board of directors of reporting companies. Lexaria annually reviews its board composition and evaluates areas of expertise that would provide additional benefits to the Company and its shareholders. As the Company transitions its technology towards pharmaceutical applications, should the Company feel it is beneficial to expand its board, the Company will endeavour to engage individuals who will be able to enhance the board with their expertise in this industry sector and who also will enrich the board with their diverse perspectives.  Our current board’s diversity data is provided below:

Our previous years’ board diversity data is provided below:

Business Experience

The following is a brief account of the education and business experience of the nominees during at least the past five years, indicating their principal occupation during the period, and the name and principal business of the organization by which they were employed.

Christopher Bunka

From 2006 Mr. Bunka has served many executive roles with our Company, including CEO, CFO, and more; until September 1, 2024, when his final executive role as Chief Executive Officer ended. Mr. Bunka continues to serve as Chairman of the Board currently, a role he has held since 2006. Mr. Bunka successfully transitioned the Company into the bioscience industry during 2014 to 2016, after identifying the then-unknown technology since named DehydraTECH. Mr. Bunka repeatedly sourced capital to fund corporate operations and develop DehydraTECH which has since undergone extensive laboratory, animal, and human clinical testing that ultimately resulted in a “Study May Proceed” letter from the Food and Drug Administration related to a planned upcoming Phase Ib human clinical trial in hypertension. In 2020, Mr. Bunka directed the Company’s up-listing to the Nasdaq stock exchange. In 2023, he was the pivotal force focusing the Company’s energies towards DehydraTECH enhancement of GLP-1/GIP molecules for weight loss and diabetes control. Mr. Bunka is a named inventor on roughly half of the Company’s current portfolio of 46 granted patents.

Since 1988, Mr. Bunka has been the CEO of C.A.B. Financial Services Ltd., a private holding company located in Canada.  C.A.B. Financial Services Ltd. is not an affiliate or subsidiary of the Company. He is a venture capitalist, corporate consultant and has roughly thirty-five years’ experience in executive management.

John Docherty

Mr. Docherty dedicates all of his professional time to our Company and its subsidiaries serving as President of Lexaria since April 15, 2015 and as a director of Lexaria since April 29, 2016.  Prior to Lexaria, Mr. Docherty was former President and Chief Operating Officer of Helix BioPharma Corp. (TSX: HBP), where he led the company’s pharmaceutical development programs for its plant and recombinantly derived therapeutic protein product candidates. Mr. Docherty is a senior operations and management executive with over 20 years’ experience in the pharmaceutical and biopharmaceutical sectors. He has worked with large multinational companies and emerging, private and publicly held start-ups. At Helix, Mr. Docherty was also instrumental in the areas of investor/stakeholder relations, capital raising, capital markets development, strategic partnering, regulatory authority interactions and media relations, and he also served as a management member of its Board of Directors. Prior to this, Mr. Docherty was President and a board member of PharmaDerm Laboratories Ltd., a Canadian drug delivery company that developed unique microencapsulation formulation technologies for use with a range of active compounds.

Mr. Docherty has also held positions with companies such as Astra Pharma Inc., Nu-Pharm Inc. and PriceWaterhouseCoopers’ former global pharmaceutical industry consulting practice. He is a named inventor on issued and pending patents, including ones owned by the Company, and he has a M.Sc. in pharmacology and a B.Sc. in Toxicology from the University of Toronto.

None of the companies that previously employed Mr. Docherty, are subsidiaries or affiliates of Lexaria. 

Nicholas Baxter

Mr. Baxter joined the Board of Lexaria Corporation in 2009. He holds a Bachelor of Science (Hons.) in Geophysics from the University of Liverpool, graduating in 1975. He has since worked on a wide range of oil & gas, natural resources, and renewable energy projects in many parts of the world. Notably, in 1998, he spearheaded negotiations securing the first onshore oil & gas production sharing agreement with the State Oil Company of Azerbaijan. Since the 1980s, he has established and served as a CEO, officer, and director with companies in both the private and public markets in the U.K., the USA and Canada, and has participated in numerous financings to fund their growth. Mr. Baxter brings a wealth of varied real-world experience as a board member.

Ted McKechnie

Mr. McKechnie is a well-recognized thought leader in the Canadian food industry. In the past, Mr. McKechnie was president of Maple Leaf Foods, an owner and president at Humpty Dumpty and a senior leader at PepsiCo & Kraft Heinz General Foods. After a distinguished career as an executive and marketer specializing in food manufacturing, he now focuses on moving the Canadian food sector into the future. Besides being the former chairman of Food Starter’s board, Mr. McKechnie is also the Chairman/CEO of The Davies Group and William Davies Consulting Inc. Mr. McKechnie is also a chairman of the board for Advanced Technology For Food Manufacturing and formerly served on the Board Of Governors for St Jeromes University. Mr. McKechnie was awarded Philip Morris Chairman’s Award for “recognition of extraordinary contributions having a significant and lasting impact on the Corporation”.

Albert Reese Jr.

Mr. Reese has over 40 years of experience in public and private businesses including as CFO of a formerly Nasdaq-listed energy company where he arranged finance transactions totaling over $10 billion dollars during his 20-year tenure. Mr. Reese was a Director and Chairman of the Audit Committee of a community bank in Texas for ten years until such time as it was acquired by a larger banking group in 2018.  He currently serves as an Independent Director and Chairman of the Audit Committee for a privately held insurance company headquartered in The Woodlands, Texas. In September 2024, Mr. Reese became an Independent Director, member of the Executive Committee and Chairman of the Audit Committee for a newly chartered community bank in Texas. Mr. Reese is also President and Chairman of a family charitable 501(c)-3 foundation and Interim Chairman of a charitable 501(c)-3 entity that focus on Bible literacy.

Mr. Reese is a Certified Public Accountant (1974), received his Bachelor of Business Administration degree from Texas A&M University in 1971, and his MBA from University of Houston in 1977. He has extensive experience at a senior level in financial services, finance transactions, investor relations, and more.

Richard Christopher

Mr. Christopher joined Lexaria on August 31, 2024 to succeed Christopher Bunka as CEO, utilizing his extensive experience with pharmaceutical and medical device companies to further assist with the transition of Lexaria into the pharmaceutical sector.  He was the Chief Financial Officer of Invivo Therapeutics Holdings Corp. (“InVivo”) from 2019 to 2024.  InVivo Therapeutics was a pioneering biomaterials and biotechnology company with a focus on the treatment of spinal cord injuries. Its goal was to develop and commercialize groundbreaking technologies and treatments for spinal cord injury (SCI). At the core of InVivo’s technology portfolio was the Neuro-Spinal Scaffold™ a novel and proprietary biomaterial that is implanted into the epicenter of the injury to modulate the healing environment and serve as a support for neuroregeneration. As the Neuro-Spinal Scaffold failed to advance through clinical trials, InVivo delisted from the Nasdaq Stock Market around March 20, 2024.

Mr. Christopher was the Chief Financial Officer of iCAD, Inc. from December 2016 through January 2019.  iCAD, Inc. is a Nasdaq-listed company with a focus on therapies and solutions for the early identification and treatment of cancer, where he held both financial and operational responsibilities.  Prior to iCAD, Inc., Mr. Christopher was Chief Financial Officer from March 2014 through December 2016 and Chief Operating Officer from October 2015 through December 2016 of Caliber Imaging & Diagnostics, Inc., a medical technology company focused on cancer detection imaging solutions, with primary applications in dermatology. Prior to Caliber and starting in 2000, Mr. Christopher held various positions of increasing responsibility at DUSA Pharmaceuticals, Inc., a Nasdaq-listed dermatology company focused on the treatment of precancerous skin lesions, where he ultimately served as Chief Financial Officer from January 2005 through its acquisition and integration into Sun Pharmaceuticals Industries Ltd in April 2013. 

Mr. Christopher holds a Master of Science in Accounting from Suffolk University and a Bachelor of Science in Finance from Bentley University.

Bal Bhullar

Ms. Bal Bhullar brings over 20 years of executive experience in diversified business, investor relations, investment banking, financial modelling, financial & risk management, internal controls and ERP and has acted as CFO and Director of ElectraMeccanica Vehicles Corp. NASDAQ:SOLO, CFO of ReCar (ReBuild Manufacturing), President of BC Risk Management Association and CEO/Founder/Director of KISMET Nutrients/American e-Commerce Solutions LLC. Ms. Bhullar is currently the CFO and Director of Damon Inc. NASDAQ:DMN (pending) and CEO/Founder/Director of BKB Management Ltd.

Ms. Bhullar has proven expertise with increasing market capitalization, raising capital, overseeing corporate governance, SOX, ESG, diversity and regulatory compliance, financial & strategic planning, as well as successfully completing initial public offerings, reverse mergers, business expansions, start-up operations, program development and product development.

Ms. Bhullar is a Chartered Professional Accountant, Certified General Accountant, a CRM designation from Simon Fraser University and a diploma in Financial Management from British Columbia Institute of Technology.

Executive Officers

Our executive officers are appointed by our Board of Directors and serve at the pleasure of our Board of Directors.

The names of our executive officers, their ages, positions held, and durations of are as follows:

For information regarding Messrs. Christopher and Docherty, see “Director Nominees” beginning on page 7.

Michael Shankman

Mr. Shankman joined Lexaria on October 1, 2024 as its Chief Financial Officer, filling the vacancy created by the resignation of Nelson Cabatuan.  Mr. Shankman is a Certified Public Accountant holding an MBA, Finance from California State University who previously worked with NOW CFO from 2021 to 2024.  During his time with NOW CFO, Mr. Shankman provided outsourced CFO and Controller services gaining extensive experience and familiarity with both public and private companies in a wide variety of industry fields.  Prior to his engagement with NOW CFO, Mr. Shankman was the Corporate Controller for The Arcticom Group, a $160M provider of refrigeration and HVAC design, installation, maintenance and repair services to national grocery chains, as its Corporate Controller from 2020-2021.  And from 2019 to 2020 Mr. Shankman was the Controller for Change.Org, a $35M public benefit corporation.

Family Relationships

There are no family relationships between any Director or executive officer.

Involvement in Certain Legal Proceedings

We know of no material proceedings in which any of our Directors, officers, affiliates or any shareholder of more than 5% of any class of our voting securities, or any associate thereof is a party adverse or has a material interest adverse to Lexaria or its subsidiaries.

Other than as noted below, to the best of our knowledge, none of our Directors or executive officers has, during the past ten years:

Mr. Richard Christopher, the newly appointed CEO of Lexaria, was formerly the Chief Financial Officer of InVivo Therapeutics Corporation (“InVivo”).  Following a failed clinical trial, InVivo filed for relief under chapter 11 of the bankruptcy code in the state of Delaware on February 1, 2024.  On June 21, 2024, the court entered a Confirmation Order confirming the Plan.  The Effective Date of the Plan occurred on July 12, 2024.  On the Effective Date, a Liquidation Trust was established and a Trustee was appointed.  The Liquidation Trust is in the process of liquidating assets and making distributions. On October 9, 2024 a motion was filed by the Trustee to extend the Claims Objection deadline to February 7, 2025.

Corporate Governance

Public Availability of Corporate Governance Documents

Our key corporate governance document is our Code of Ethics which is:

Code of Ethics

We adopted a Code of Ethics applicable to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, which is a “code of ethics” as defined by applicable rules of the Securities and Exchange Commission (the “SEC”).  Our Code of Ethics is attached as an exhibit to our Registration Statement on Form SB-2 filed on September 20, 2007.  The Code of Ethics is intended to meet the requirements for a code of ethics under the Sarbanes-Oxley Act of 2002, or “SOX” and is specifically applicable to our principal executive officer, principal financial and accounting officer and controller or persons performing similar functions. Among other matters, the Code of Ethics is designed to deter wrongdoing and to promote:

If we make any amendments to our Code of Ethics other than technical, administrative, or other non-substantive amendments, or grant any waivers, including implicit waivers, from a provision of our Code of Ethics to our chief executive officer, chief financial officer, or certain other finance executives, we will disclose the nature of the amendment or waiver, its effective date and to whom it applies in a Current Report on Form 8-K filed with the SEC.  

Employee Handbook

In addition to the Code of Ethics, we have also adopted an employee handbook that governs all of our team members, regardless of their position with our Company.  This includes an internal code of conduct (the “Code”) which was created to deter wrongdoing and to promote:

Our Employee Handbook is posted on our website http://www.lexariabioscience.com under our Investors/Governance/Governance Documents tab.

Insider Trading Policy

The Company maintains a policy on insider trading that applies to any and all transactions in the Company’s securities held by any director, officer, or employee. The policy prohibits all directors, officers, and employees of the Company from trading in the Company’s securities while in possession of material nonpublic information (“MNPI”) about the Company and from giving MNPI to others who may trade on the basis of such information. Under the policy, insiders may enter into a Rule 10b5-1 trading arrangement in order to comply with the affirmative defense provided under Rule 10b5-1 promulgated under the Exchange Act.  To date none of our insiders have advised the Company that they have entered into a Rule 10b5-1 trading arrangement.  The Company’s Insider Trading Policy was filed as Exhibit 19.1 to our Annual Report on Form 10-K for the year ended August 31, 2024. 

Prohibition against Short Sales and Hedging

Pursuant to our Insider Trading Policy, we prohibit our employees, officers and directors from trading in any interest or position relating to the future price of Company securities, such as a put, call or short sale (including a short sale “against the box”).

Meetings

Our Board of Directors held at least ten (10) formal meetings during the year ended August 31, 2024.  During such formal meetings, all Directors were in attendance.  All proceedings of the Board of Directors were conducted either at such formal meetings and evidenced by way of minutes of such proceedings or by way of resolutions consented to in writing by all the Directors. Such resolutions consented to in writing by the Directors entitled to vote on that resolution at a meeting of the Directors are, according to the Nevada Revised Statutes and our Bylaws, as valid and effective as if they had been passed at a meeting of the Directors duly called and held.

It is our policy to invite Directors to attend the Meeting of shareholders.  However, in order to reserve cash resources, only our Chairman shall physically be at our head office attending the Meeting, with our other Directors and Executive Officers attending the Meeting via Event Conferencing.  For the Company’s 2024 shareholder meeting, the Chief Executive Officer attended in person with the remaining Board of Directors attending via Event Conferencing.

Committees of the Board of Directors

Compensation Committee

The Company created a Compensation Committee on July 2, 2020 and during the fiscal year ended August 31, 2024 the Compensation Committee held eight (8) meetings.  Currently the Compensation Committee consists of Nicholas Baxter, Dr. Catherine C. Turkel and Ted McKechnie, all Directors being “independent” pursuant to Nasdaq independence standards. 

The Compensation Committee’s purpose is to review, consider, research and recommend compensation for the Company’s executive management, taking into consideration achieved milestones, the compensation issued by companies of similar size and the overall financial health of the Company.  In addition, the Compensation Committee is also responsible for approving and reviewing employment agreements and benefits agreements as well as any executive compensation information that is incorporated into the Company’s periodic reports.  The Compensation Committee operates pursuant to a written charter adopted by our Board of Directors, which was most recently created on July 2, 2020.  A copy of the Compensation Committee charter can be downloaded from the Company’s website http://www.lexariabioscience.com under our Investors/Governance/Governance Documents tab.

Governance and Nominating Committee

The Company created a Governance and Nominating Committee (the “G & N Committee”) on December 8, 2020 and during the fiscal year ended August 31, 2024 the G & N Committee held five (5) meetings.  Currently the members of the G & N Committee are Dr. Catherine C. Turkel and Albert Reese Jr., both of whom qualify as independent Directors of the Company.  The purpose of the G & N Committee is to assist the Board of Directors with fulfilling its responsibilities by: (i) being satisfied that corporate governance guidelines are adopted, disclosed and applied including director qualification standards, director responsibilities, director access to management and independent advisors, director compensation, director orientation and continuing education, and annual performance evaluation of the Board; (ii) identifying individuals qualified to become new Board members and recommending to the Board the nominees for each Annual and Special Meeting of shareholders of the Corporation; and (iii) such other matters delegated to the Committee by the Board.  The G & N Committee operates pursuant to a written charter adopted by our Board of Directors which was most recently amended on November 13, 2023.  A copy of the G & N Committee charter can be downloaded from the Company’s website http://www.lexariabioscience.com under our Investors/Governance/Governance Documents tab.

The Board of Directors has a critical role in guiding our strategic direction and overseeing the management of our business, and accordingly, we seek to attract and retain highly qualified directors who have sufficient time to engage in the activities of the Board of Directors and to understand and enhance their knowledge of our industry and business plans. In evaluating the suitability of individual candidates, the G & N Committee and Board of Directors may take into account many factors, including: relevant education, experience and expertise; knowledge of the Company and the issues facing the Company; whether the candidate will strengthen the Board, as a whole, and remedy any perceived deficiencies in the specific criteria; moral and ethical character; diversity of expertise and experience in substantive matters pertaining to our business relative to other board members; diversity of background and perspective, including, but not limited to, with respect to age, gender, race, sexual orientation, place of residence and specialized experience; and any other relevant qualifications, attributes or skills. The core competencies of directors should address accounting or finance experience, market familiarity, business or management experience, industry knowledge, customer-base experience or perspective, crisis response, leadership, and/or strategic planning. 

Audit and Finance Committee

The Company has an Audit and Finance Committee that has conducted four (4) formal meetings during the fiscal year ended August 31, 2024.  Currently our Audit and Finance Committee consists of Albert Reese Jr., Nicholas Baxter, and Ted McKechnie.  Our Audit and Finance Committee is fully independent from the Company and Mr. Reese satisfies the requirement of having an “Audit Committee financial expert” as defined in Item 407(d)(5) of Regulation S-K. 

The Audit and Finance Committee operates pursuant to a written charter adopted by our Board of Directors, which was most recently updated and replaced on December 8, 2020 and a copy of which can be downloaded from the Company’s website http://www.lexariabioscience.com under our Investors/Governance/Governance Documents tab.

It is not the duty of our Audit and Finance Committee to determine that our financial statements are complete and accurate and in accordance with generally accepted accounting principles.  Our management is responsible for preparing our financial statements, and our independent registered public accounting firm is responsible for auditing those financial statements.  Our Audit and Finance Committee does, however, consult with management and our independent registered public accounting firm prior to the presentation of financial statements to shareholders and, as appropriate, initiates inquiries into various aspects of our financial affairs. In addition, our Audit and Finance Committee is responsible for retaining, evaluating and, if appropriate, recommending the termination of our independent registered public accounting firm and approving professional services provided by them.

AUDIT AND FINANCE COMMITTEE REPORT

Our Audit and Finance Committee oversees our financial reporting process. Management has the primary responsibility for the financial statements and the reporting process, including the system of internal accounting controls.

Our Audit and Finance Committee has reviewed and discussed the audited financial statements for the year ended August 31, 2024 with management.

Our Audit and Finance Committee has discussed with MaloneBailey LLP, Chartered Accountants, our independent registered public accounting firm for the year ended August 31, 2024, the matters required to be discussed by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU Section 380) as adopted by the Public Accounting Oversight Board in Rule 3200T.

Our Audit and Finance Committee has received written disclosures and the letter from MaloneBailey LLP required by Independence Standards Board Standard No. 1 (Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees) as adopted the Public Company Accounting Oversight Board in Rule 3600T, and has discussed with MaloneBailey LLP its independence.

Based on the reviews and discussions referred to above, our Audit and Finance Committee recommended to our Board of Directors that the audited financial statements referred to above to be included in our annual report on Form 10-K for the year ended August 31, 2024 for filing with the Securities and Exchange Commission.

Respectfully submitted,

The Audit and Finance Committee of Lexaria Bioscience Corp.

Albert Reese Jr., Ted McKechnie and Nicholas Baxter

Not “Soliciting Material” The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of our Company under the Securities Act of 1933 or the Exchange Act whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

Director Independence

We currently act with six Directors, consisting of Christopher Bunka, John Docherty, Ted McKechnie, Nicholas Baxter, Albert Reese Jr. and Dr. Catherine C. Turkel.  We have determined that Ted McKechnie, Nicholas Baxter, Albert Reese Jr. and Dr. Catherine C. Turkel are each an “independent director” as defined in Nasdaq Rules.

Dr. Turkel has advised that she will not be standing for re-election.

We are nominating the following persons for election as Directors:  Christopher Bunka, John Docherty, Ted McKechnie, Nicholas Baxter, Albert Reese Jr., Richard Christopher and Bal Bhullar.  Of these nominees, we have determined that Ted McKechnie, Nicholas Baxter, Albert Reese Jr. and Bal Bhullar are each an “independent director” as defined in Nasdaq Rules.

Shareholder Communications with Our Board of Directors

Because of our Company’s small size, we do not have a formal procedure for shareholder communication with our Board of Directors. In general, members of our Board of Directors and executive officers are accessible by telephone or mail. Any matter intended for our Board of Directors, or for any individual member or members of our Board of Directors, should be directed to our Head of Legal, Vanessa Carle by:

Email at: [email protected]

Fax at: 250-765-2599

Mail at: 100 – 740 McCurdy Road, Kelowna, BC V1X 2P7

with a request to forward the communication to the intended recipient.

Board Leadership Structure

The Chairman of our Board of Directors is Christopher Bunka, who was also our Chief Executive Officer until August 31, 2024.  Mr. Bunka currently acts as a strategic executive advisor to the current Chief Executive Officer of the Company, Richard Christopher, during this period of transition.  We have determined that the leadership structure of our Board of Directors is appropriate, especially given the early stage of our development and the size of our Company.

Risk Oversight

The Board of Directors oversees our exposure to risk through its interaction with management and receipt from management of periodic reports outlining matters related to financial, operational, regulatory, legal and strategic risks. Risk assessment and oversight are an integral part of our governance and management processes. Our Board of Directors encourages management to promote a culture that incorporates risk management into our corporate strategy and day-to-day business operations. Management discusses strategic and operational risks at regular management meetings, and conducts specific strategic planning and review sessions during the year that include a focused discussion and analysis of the risks facing us. Throughout the year, senior management reviews these risks with the Board of Directors at regular board meetings as part of management presentations that focus on particular business functions, operations or strategies and presents the steps taken by management to mitigate or eliminate such risks.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our executive officers and Directors, and persons who own more than 10% of our common stock, to file reports regarding ownership of, and transactions in, our securities with the SEC and to provide us with copies of those filings. Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during the fiscal year ended August 31, 2024, all filing requirements applicable to our executive officers, Directors and persons who own more than 10% of our common stock were complied with, other than the inadvertent late filing of the Form 4 – Statement of Changes in Beneficial Ownership of Securities for all of the Company’s directors and officers with respect to their stock option allotment of April 26, 2024, with such Form 4’s being filed on May 10, 2024.  

Executive Compensation

The following table sets forth all compensation received during the year ended August 31, 2024 and 2023 by our Chief Executive Officer, former Chief Financial Officer and each of the other most highly compensated executive officers whose total compensation exceeded $100,000 in such fiscal year. These officers are referred to as the “Named Executive Officers” in this proxy statement. 

Summary Compensation

The particulars of compensation paid to the following persons:

who we will collectively refer to as the Named Executive Officers, for our fiscal years ended August 31, 2024 and 2023, are set out in the following summary compensation table:  

Notes:

Employment and Consulting Agreements

For the 2023 and 2024 fiscal years the following agreements were effective between the Company and the Named Executive Officers:

Christopher Bunka, Former Chief Executive Officer.  The Company negotiated a 3-year term renewable management contract with Mr. Bunka effective January 1, 2022 which replaced the historical agreement of similar terms which expired on January 1, 2022. The base annual compensation payable is C$356,472 per year with an annual increase of 1.25 times the annual Canadian inflation rate. A performance bonus equal to 50% of the annual compensation may be payable upon the completion of certain performance criteria as determined by the Board of Directors and he is also entitled to participate in the Company’s approved stock option plan.  An annual professional development allowance of C$15,000 is also available to Mr. Bunka.

Mr. Bunka is entitled to compensation equal to 2% of the consideration received by the Company from the sale of a subsidiary, excluding certain circumstances. Upon the occurrence of a change of control, subject to certain exemptions, Mr. Bunka will also be entitled to a lump payment of twenty-six times his monthly fee. The termination clause of Mr. Bunka’s contract states that fifteen (15) months’ notice must be given for terminating his contract without cause or in lieu of such notice a break fee payment equal to fifteen (15) times his monthly fee must be paid.  Both the termination notice period or the break fee in lieu thereof will increase by one month for each year of service completed.  Pursuant to Mr. Bunka’s termination as CEO in order to engage Richard Christopher as the Company’s new CEO, Mr. Bunka was provided with a break fee equal to 17 months of his monthly fee.

John Docherty, President.  The Company, via KMSC, has negotiated a three-year renewable executive employment agreement with Mr. John Docherty, effective January 1, 2022 which replaced the historical agreement of similar terms which expired on January 1, 2022.  The base annual compensation payable is C$310,001.28 per year with an annual increase of 1.25 times the annual Canadian inflation rate. A performance bonus equal to 50% of the annual compensation may be payable upon the completion of certain performance criteria as determined by the Board of Directors and he is also entitled to participate in the Company’s approved stock option plan. An annual professional development allowance of C$15,000 is also available to Mr. Docherty.

The agreement for the services of the President also includes the following performance incentives: entitlement to compensation equal to 2% of the consideration received by the Company from the sale of a subsidiary, excluding certain circumstances. Upon the occurrence of a change of control, subject to certain exemptions, Mr. Docherty will also be entitled to a lump payment of twenty-one (21) times his monthly fee.  The termination clause of Mr. Docherty’s contract states that twelve (12) months’ notice must be given for terminating his contract without cause or in lieu of such notice a break fee payment equal to twelve (12) times his monthly fee must be paid.  Both the termination notice period or the break fee in lieu thereof will increase by one month for each year of service completed.

Nelson Cabatuan, Former Chief Financial Officer.  On March 14, 2024, the Company, via KMSC, entered into an employment contract with Mr. Cabatuan providing a base annual salary of US$198,000, subject to annual increases of US$12,000 for the first and second anniversary of employment with any subsequent increase being subject to negotiation, an option grant for the issuance of up to 200,000 common shares vested over three years, and annual performance milestone bonuses of up to 35% during the first year, 40% during the second year and thereafter up to 50% of the base salary.  Upon the resignation by Mr. Cabatuan, 150,000 of the 200,000 options issued to him were cancelled and returned to the option pool. 

Greg Downey, Former Chief Financial Officer.  On April 15, 2021, the Company, via KMSC, entered into an employment contract with Mr. Downey providing annual compensation of C$144,000 with a 10% annual increase. A performance bonus equal to 50% of the annual compensation may be payable upon the completion of certain performance criteria as determined by the Board of Directors and he was also entitled to participate in the Company’s approved stock option plan. An annual professional development allowance of C$5,000 was also available to Mr. Downey.   Pursuant to the termination provisions of Mr. Downey’s employment contract, on June 6, 2023, the Company agreed to pay Mr. Downey four months of salary in lieu of notice, two additional months salary as a retiring allowance and accrued vacation entitlement.

All compensation paid pursuant to the above-noted agreements that is paid in Canadian currency but reported in US currency is calculated using the Bank of Canada interbank rate as at the last day of the applicable month.

There are no arrangements or plans in which we provide pension, retirement or similar benefits for our executive officers, except that our executive officers may receive stock options at the discretion of our Board of Directors.

Compensation Discussion and Analysis

Our Philosophy on Compensation

At Lexaria, our goal is to positively impact human health and lifestyles through consumer and pharmaceutical products that reduce onset times, reduce dosage quantities, provide healthier administration methods and minimize severe side effects though the incorporation of Lexaria’s patented DehydraTECH technology.  In order to accomplish this goal, we must attract, engage and retain highly qualified individuals who are able, due to our small size, to fulfil a broad range of business development responsibilities, while also creating long-term shareholder value and embracing Lexaria’s core values of innovation, high-performance and expertise.  Our compensation incentives are designed to align our goals with the long-term interests of our shareholders and partners.

Objectives

When determining compensation payable to our Named Executive Officers, Lexaria considers the following:

Relationship between individual efforts and company performance: We reinforce a high-performance culture by linking annual bonuses payable to our executive officers with company performance. These performance-based milestone bonuses are dependent on the successful completion or partial completion of certain corporate objectives determined by the Compensation Committee and approved by the Board of Directors. These corporate objectives encompass a broad spectrum of improvement, including, advancements in Lexaria’s technology as evidenced through patents granted or successful results from clinical trials and/or research studies, material financings or strategic partnerships and increased share value.

Attract and retain talented executives: Compensation opportunity is market competitive and reflects the level of job impact and responsibilities. Retention of talent is an important factor in the milestones set for our performance milestones.

Consider shareholder input: Management and the Compensation Committee consider the results of our say-on-pay vote and other sources of shareholder feedback when considering the executive compensation payments.

Review of Peer Companies:  The Compensation Committee engaged a third party service provider to assist them with conducting a peer analysis of compensation provided to the directors and executive officers of similar companies to Lexaria.

Say-on-Pay Results for 2022

The last shareholder advisory vote on the executive compensation was provided at the 2022 Annual and Special Meeting of shareholders whereby the executive compensation described in the Named Executive Officer’s employment and/or consulting agreements was approved by a vote of 93.52% with the next shareholder advisory vote being scheduled for our current 2025 annual shareholder meeting.  As the shareholders had indicated to the Company, by way of their substantial vote in favour, that the compensation being provided to the Named Executive Officers was acceptable and approved, the Company has maintained the forms of compensation as detailed in the above noted employment/consultant agreements. 

Compensation Committee’s Processes and Analyses

Setting Compensation

Due to the small size of Lexaria, the CEO and the President consider the business objectives and goals of the Company for the ensuing calendar year and provide recommendations to the Compensation Committee for the establishment of performance milestones for the Company’s executives and other key employees which will assist in the accomplishment of such objectives and goals at a high level of success. 

The Compensation Committee then considers the recommendations of the CEO and President and independently accepts, rejects or amends them, as they deem appropriate, based on their internal discussions, research and/or consultation with the Company’s outside lawyers, accountants or any third party consultants.  The final performance milestones are then inputted into the compensation matrix that the Compensation Committee formalized for the calendar year in order to establish the associated weight of each performance milestone.

Payment of Bonus Compensation Based on Success of Performance Milestones

At the end of the calendar year, or shortly thereafter, the CEO and President provide the Compensation Committee with a summary of the Company’s overall performance along with the completed performance milestone matrix, identifying whether a performance milestone was met and if so, the value of the executive’s contribution for the completion of such milestone along with validating evidence.  The Compensation Committee then considers the performance milestone matrix and the validating evidence to confirm the applicable rate of the performance milestone bonus, with such bonus being no greater than 50% of the annual salary of the CEO, President and CFO, respectively.

Competitive Pay Assessment

In 2019, the Company, with the assistance of its legal counsel and after reviewing other publicly listed corporations of similar size, established the annual salary for its executives (the “Base Salary”).  Based on that analysis, the Base Salary was increased annually (the “Annual Increase”) by an amount that is equal to 1.25 times the inflation rate as published by the Bank of Canada.  Since the initial pay negotiation, the former CEO and the current President have not received any salary pay increases other than the Annual Increase.  The Company has now engaged, for the first time in its history, US residents to act in the capacity of executive officers.  Accordingly, in conjunction with the Compensation Committee’s review of the third party provided peer analysis report and a review by the Company’s US employment legal counsel, compensation for the Company’s new Chief Financial Officer and Chief Executive Officer was established.  The Annual Increase for the Chief Financial Officer is based on 1.25 times the inflation rate as published by the US Federal Reserve Board and the Annual Increase for the Chief Executive Officer is based on 5% for each of Jan. 1, 2025 and Jan. 1, 2026 with additional Annual Increases being based on normal business practices and in the sole discretion of the Company.  The Company expects that the renegotiation of its contract with its President, John Docherty, which expires on December 31, 2024, will be updated to reflect the recent results from the compensation analysis and implementation for the Company’s US executives. 

Components of our Compensation

Our 2024 executive compensation was composed of three components:

Base Salary

As noted under Employment and Consulting Agreements and Competitive Pay Assessment above, each of our Named Executive Officers receives a Base Salary that is increased pursuant to their respective Annual Increase formula.

Cash Bonus – Performance Milestone

As noted under Employment and Consulting Agreements and above, each of our Named Executive Officers has certain performance milestone goals set for them pursuant to the successful completion of which they are eligible to qualify to be paid a bonus of not more than 50% of their Base Salary.

For the calendar year ended December 31, 2024, the Performance Based Incentives established by the Compensation Committee focused on the advancement of the Company’s DehydraTECH technology with GLP-1 and GIP molecules through the completion of animal and human pilot studies.  As well, commercial success metrics were established for the completion of a strategic commercial transaction, completing successful financing(s) of $15 million or more, without negative effects to shareholders and meeting certain financial performance metrics.  The Compensation Committee then presented the milestones and timeframes for the completion of same to the independent Board for approval.  The approved milestones and timeframes then set a basis for the compensation payable pursuant to the Performance Based Incentives to the Named Executive Officers, with such payments being made by March 31, 2025.  All of the milestones established for the payment of Performance Based Incentives contained a high level of difficulty to achieve due to various unpredictable outside factors.

For the calendar year ended December 31, 2023, the Performance Based Incentives established by the Compensation Committee focused on: (1) the successful filing of the IND application with the FDA for DehydraTECH-CBD with completion of first in-patient dosing; (2) successful completion of 4 animal and/or human studies clearly evidencing statistically or clinically significant test results; (3) expansion of patent portfolio; (4) commercial success of the Company by way of the completion of a strategic commercial transaction with committed revenues of at least $1m; (5) obtaining a share price of $5.00 for twenty consecutive trading days; (6) completing a successful financing of $10 million or more, without negative effects to shareholders; (7) cost savings or research grant(s) valued at 50% or more of the recipient’s annual salary; and (8) completing a strategic partner transaction with value of $10 million or more in either up-front fees, staged milestone fees, royalties or contracted payments.  The Compensation Committee presented these milestones and timeframes for the completion of same to the independent Board for approval.  The approved milestones and timeframes then set a basis for the compensation payable pursuant to the Performance Based Incentives to the Named Executive Officers, with such payments made by March 31, 2024.  The milestones established for the payment of Performance Based Incentives exceed what is expected of the Named Executive Officers in their management capacity and contain a high level of difficulty for successful achievement.

Cash Bonus – Affiliate Sale

With respect to the compensation to be issued to the fiscal year end Named Executive Officers for the sale of an affiliate of the Company, it was determined that compensation for these transactions was justified as the sale of an affiliate, (or the material assets of an affiliate), was deemed to represent the development of a strategic asset, namely a subsidiary representing a branch of the Company’s technology, that became a desirable acquisition for an established company which would result in significant cash revenue for the Company.  The ability of a successful completion of an affiliate sale is subject to several outside factors that require mitigation by the Named Executive Officers, namely, shareholder approvals, valuations, regulatory filings and approvals, negotiation of the terms of the sale, tax considerations and cross border legal considerations for both the Company and the acquiring party.  It is anticipated that any such affiliate sale would require active and dedicated contributions from the Named Executive Officers for between three to six months.  This bonus was not included in the current CEO or CFO employment agreements and will be subject to negotiation with the President’s upcoming contract renewal.

Cash Bonus – Change of Control

With respect to compensation provided to the fiscal year end Named Executive Officers and the new Chief Executive Officer, in the circumstances of a change of control, it is considered that such change of control will be linked to Lexaria being taken over by a larger successful company, thus creating increased value for its shareholders.  A change of control will be triggered if any of the following events occurs:

Equity Compensation

Equity compensation, namely through the issuance of stock options, to the Named Executive Officers is typically considered in conjunction with each of the Company’s Directors, employees and, if applicable, consultants.  Accordingly, the executive officers review the allotment and value of options currently issued by the Company to its team members and then consider the contributions made by each of the Company’s team members during the year.  The executive officers then present their suggested option issuance allotment to the independent Board of Directors along with an explanation for such suggested allotments for their review and consideration.  After any adjustments are made to the option issuance allotment pursuant to the feedback provided by the independent Board of Directors, the full Board of Directors will then authorize and approve the stock options issuances.  While there are no formalized practices in place with respect to the timing of option issuances, the Company uses its best efforts to refrain from issuing stock options until any material non-public information has been released.  Lexaria uses equity compensation as a further means to align the interests of its Named Executive Officers with those of its shareholders.

Compensation Plans

As of August 31, 2024, we had one active equity compensation plan, a summary of which follows:

Lexaria Bioscience Corp. Equity Incentive Plan (the “Incentive Plan”)

On May 1, 2019, the Board of Directors approved the Incentive Plan which was subsequently approved by the Lexaria shareholders on June 20, 2019 at the Company’s annual and special meeting.  The Incentive Plan permits grants of incentive stock options, nonstatutory stock options, restricted stock, restricted stock units, and stock appreciation rights (collectively the “incentive securities”) to eligible participants.  On June 28, 2021, the shareholders of the Company approved an increase to the maximum number of incentive securities that could be issued under the Incentive Plan so that the Company was authorized to issue up to 510,433 incentive securities, representing 10% of the issued share capital as at the record date of the Company’s 2021 shareholder meeting. 

On May 9, 2023, the shareholders of the Company approved an increase to the maximum number of incentive securities that could be issued under the Incentive Plan to 809,165 shares and further approved an evergreen formula so that the maximum number of incentive securities issuable under the Incentive Plan would adjust as at January 1 of each year, starting in 2024, to be 10% of the issued share capital as at December 31 of the previous year.  The Company did not effect the approved amendments to its Incentive Plan until January 18, 2024, when it filed a Form S-8 Registration Statement (333-276584) with the SEC, registering the Incentive Plan and the incentive securities issuable thereunder.  Accordingly, the Company is currently able to issue an aggregate 1,037,544 incentive securities pursuant to its Incentive Plan and intends to file a new Form S-8 registration statement in January 2025 to increase the number of incentive securities that may be issued to a number equal to 10% of the issued share capital at December 31, 2024.

The purchase price per share deliverable upon the exercise of an incentive security granted under the Incentive Plan shall be determined by the Board of Directors at the time of grant of such incentive security but cannot be less than one hundred percent (100%) of the fair market value per share on the date of the incentive security grant.  Further incentive securities issued to persons who own ten percent (10%) of the voting power of all classes of stock of the Company or any of its subsidiaries, shall bear an exercise price of no less than one hundred ten percent (110%) of the fair market value of the Company’s shares on the date of grant. Incentive securities granted under the Incentive Plan shall expire on such date as determined by the Board of Directors and set forth in the applicable award agreement, provided, that such date shall not be later than (10) ten years after the date on which the incentive security is granted and, in the case of recipients who hold more than ten percent (10%) of the voting power of all classes of stock of the Company or any of its subsidiaries, such date shall not be more than five (5) years from the date on which the incentive security is granted.

Eligible participants to the Incentive Plan shall include Directors, officers, employees and consultants of Lexaria and of Lexaria’s affiliates.  Vesting provisions may be placed on incentive security issuances at the discretion of the Board of Directors, taking into consideration the length of service of the recipient and the number of incentive securities granted.  Specifically, options shall typically terminate on the earlier of:  (i) the expiry date; (ii) one year after disability or death of the optionee; or (iii) three months after termination of the optionee’s services to Lexaria or an affiliate of Lexaria.  As at the Record Date, there are currently 990,269, issued and unexercised options under the Incentive Plan with an allowable 44,775 options available for issuance. 

Other Forms of Compensation

Lexaria has agreed to provide reimbursement for medical and dental benefits to its US Named Executive Officers who joined the Company concurrent with or after the fiscal year end.

Other than as noted above, Lexaria does not provide any benefits associated with pension, retirement, RRSP matching, gym membership, car allowance, life insurance plans or, with respect to its Canadian Named Executive Officer, extended health or dental.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth for each Named Executive Officer certain information concerning the outstanding equity awards as of August 31, 2024: 

(1) options with an exercise price of $3.00 were repriced from between $9.60 to $5.04 pursuant to shareholder approval received on May 9, 2023

Pay Versus Performance

In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we are providing the following table outlining the past two fiscal years’ executive compensation for our principal executive officer (“PEO”) and Non-PEO executive officers (“NEOs”) and comparative Company performance based on total shareholder return.  We are a smaller reporting company (“SRC”), as defined in Rule 12b-2 under the Exchange Act and have elected to provide in this proxy statement certain scaled disclosures permitted under the Exchange Act for SRCs

Compensation of Directors

The following compensation was provided to the Directors of Lexaria who are not also Named Executive Officers during the fiscal year ended August 31, 2024:

Each independent Director entered into a Board of Director Services Agreement with the Company whereby they are paid $30,000 annually as compensation for their director services, $5,000 annually as compensation for their committee services and $5,000 annually as compensation for acting as the Chair on any committee.  In addition, each independent director receives an annual stock option allotment of 5,000 options.  The annual option allowance for 2024 was increased by an additional 12,000 options per independent director in order to align each independent director’s option holdings with those of peer companies to Lexaria, as determined by a third party consultant.  The four independent directors have been granted an aggregate of 68,000 stock options with a calculated fair value of $xx and is included in consulting expense during the fiscal year 2024.

There are no arrangements or plans in which we provide pension, retirement or similar benefits for our independent Directors, except that they may receive additional stock options at the discretion of our Board of Directors.

Securities Authorized for Issuance under Equity Compensation Plans

We have no long-term incentive plans other than the incentive plans described below.

Equity Compensation Plan Information 

The following table sets forth certain information concerning all equity compensation plans previously approved by shareholders and all previous equity compensation plans not previously approved by shareholders, as of the most recently completed fiscal year ended August 31, 2024.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

We did not purchase any of our common shares or other securities during our fiscal year ended August 31, 2024.

Transactions with Related Persons and Related Person Transaction Policy

No Director, executive officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since the beginning of the year ended August 31, 2024, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at the year-end for the last two completed fiscal years.

Under our Code of Ethics, our senior financial officers are required to act with honesty and integrity, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships.  In addition, our Audit and Finance Committee Charter provides that the Audit and Finance Committee will be responsible for the review of any related-party transactions.

Anti-Hedging Policy

We have not established any sort of anti-hedging policy that would prohibit our executive officers and Directors from hedging the economic interest of their stock ownership and holding shares of the Company’s common stock in a margin account or pledging shares as collateral for a loan.

Employment Agreements

For information regarding compensation for our executive officers and Directors, see “Summary Compensation” beginning on page 16.

Fees Paid to Our Independent Registered Public Accounting Firm

Audit Fees

MaloneBailey LLP has been appointed as our independent auditor since 2022 and has conducted the audits for our 2024 and 2023 fiscal years.  The aggregate fees billed for the most recently completed fiscal years ended August 31, 2024 and August 31, 2023 for professional services rendered by the principal accountant and to others for the provision of specialized advice for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:

Audit fees consist of fees billed for professional services rendered for the audits of our financial statements, reviews of our interim financial statements included in quarterly reports, services performed in connection with filings with the SEC and related comfort letters and other services that are normally provided by MaloneBailey LLP for the fiscal years ended August 31, 2024 and August 31, 2023 in connection with statutory and regulatory filings or engagements.  

MaloneBailey LLP will be submitted to the shareholders for ratification as to its continued appointment under Proposal 2 located at page 28. 

Audit related Fees

Audit related fees consist of fees billed for assurance and related services by Lexaria’s principal accountants for the fiscal years ended August 31, 2024 and August 31, 2023 in connection with statutory and regulatory filings or engagements. 

Tax Fees

Tax fees consist of fees billed for professional services for tax compliance, tax advice and tax planning. These services include assistance regarding federal, state and local tax compliance and consultation in connection with various transactions and acquisitions.

All Other Fees

We did not use MaloneBailey LLP for financial information system design and implementation. These services, which include designing or implementing a system that aggregates source data underlying the financial statements or generates information that is significant to our financial statements, are provided internally or by other service providers.

Effective May 6, 2003, the SEC adopted rules that require that before our independent auditors are engaged by us to render any auditing or permitted non-audit related service, the engagement be:

Our Board of Directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the Board of Directors either before or after the respective services were rendered.

Our Board of Directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.

PROPOSALS FOR SHAREHOLDER VOTE

Proposal 1

Election of Directors

Our Board of Directors has nominated the persons previously named under Director Nominees as candidates for Directors at the Meeting. These nominees are all of our current Directors and information regarding their expertise is provided under the Director Nominees section.  Unless otherwise directed, the proxy holders will vote the proxies received by them for the election of:  Christopher Bunka, John Docherty, Ted McKechnie, Nicholas Baxter, Albert Reese Jr., Richard Christopher and Bal Bhullar.

Each Director who is elected will hold office until the next Meeting of Shareholders and until their successor is elected and qualified. Any Director may resign their office at any time and may be removed at any time by the majority of votes of the shareholders given at a special meeting of our shareholders called for that purpose.

Vote Required

If a quorum exists, the nominees for director receiving a majority of the votes cast, will be elected as directors. Abstentions and broker non-votes are not votes cast and will have no effect on the outcome of this vote.

Our Board of Directors recommends that you vote FOR the nominees.

Proposal 2

Ratification of the Continued Appointment of the Independent Registered Public Accounting Firm

Our Audit and Finance Committee has directed our Board of Directors to ask our shareholders to ratify the continued appointment of MaloneBailey LLP, as our independent registered public accounting firm for the fiscal year ending August 31, 2025 at a remuneration to be fixed by the Board.  MaloneBailey LLP was first appointed in November 2022 by the Company as its independent registered public accounting firm to replace Davidson & Company LLP after they advised that they would not be standing for re-appointment, all as previously disclosed in a Form 8-K filed by the Company on November 28, 2022.

Shareholder ratification of the continued appointment of MaloneBailey LLP is not required under Nevada corporate law or pursuant to our bylaws.  However, our Board of Directors is submitting the continued appointment of MaloneBailey LLP as our independent registered public accounting firm to our shareholders for ratification as a matter of corporate practice. If our shareholders fail to ratify the continued appointment, our Board of Directors will reconsider whether or not to retain the firm. Even if the appointment is ratified our Board of Directors, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if our Board of Directors determines that such a change would be in the best interest of our Company and our shareholders.

Representatives of MaloneBailey LLP are not expected to be present at the Meeting. However, we will provide contact information for MaloneBailey LLP to any shareholders who would like to contact the firm with questions and the firm will be expected to respond to any appropriate questions; however, if representatives from MaloneBailey LLP are present at the Meeting, they will have an opportunity to make a statement if they desire to do so.

Unless otherwise directed, the proxy holders will vote the proxies received by them for the ratification of the continued appointment of MaloneBailey LLP as our independent registered public accounting firm for the fiscal year ending August 31, 2025.

At the Meeting the shareholders entitled to vote who are present in person or via proxy will be asked to approve the following resolution by a simple majority:

“RESOLVED THAT the continued appointment of MaloneBailey LLP as our independent registered public accounting firm is ratified, approved and confirmed and that the remuneration be fixed by the Board.”

Vote Required

The ratification of the appointment of MaloneBailey LLP as the Company’s independent registered public accounting firm requires the affirmative vote of a majority of the shares present and entitled to vote thereon.  Abstentions are not votes cast and will have no effect on the outcome of this vote. Broker non-votes are not expected for this proposal because we believe this matter is a routine matter. If there were to be any broker non-votes they would have no effect on this proposal.

Our Board of Directors recommends that you vote FOR the ratification of the continued appointment of MaloneBailey LLP as our independent registered public accounting firm as our auditors for the fiscal year ending August 31, 2025 at a remuneration to be fixed by the Board.

Proposal 3

Advisory Vote to Approve the Compensation of Our Named Executive Officers

Pursuant to Section 14A of the Exchange Act, as amended (the “Exchange Act”), our shareholders are entitled to vote on whether the advisory shareholder vote to approve executive compensation should occur every one, two or three years, and may also choose to abstain from voting. In 2019, the majority of our shareholders voted to approve executive compensation every three years and accordingly, we provided our shareholders with an opportunity to express their views on our named executive officer's compensation for the fiscal year 2021, and are now providing our shareholders with an opportunity to express their views on our named executive officer's compensation for the fiscal year 2024, as disclosed in this Proxy Statement. Assuming there is no change to the Company's current policy regarding the frequency of such advisory vote, it is expected that the next “say-on-pay” vote will occur at our 2028 Annual and Special Meeting of shareholders. Although this advisory vote is non-binding, our Board of Directors will review and consider the voting results when making future decisions regarding our named executive officer compensation and related executive compensation programs.

As described in more detail in the Compensation Discussion and Analysis, our executive compensation program is designed to:

We encourage shareholders to read the Compensation Discussion and Analysis beginning on page 19 of this Proxy Statement, which outlines the current compensation issuable to our named executive officers. The Board of Directors believe that our executive compensation strikes the appropriate balance between utilizing measured pay practices and effectively incentivizing our named executive officers to dedicate themselves fully to create value for our shareholders.

The Board of Directors recommends that shareholders indicate their support for the compensation of our named executive officers. The vote on this resolution is not intended to address any specific element of compensation but rather the overall named executive officer compensation program as described in this Proxy Statement.

Accordingly, we ask our shareholders to vote on the following resolution at the Annual and Special Meeting:

“RESOLVED, that the shareholders approve, on an advisory non-binding basis, the compensation of our named executive officers for the fiscal year 2024, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the compensation table and any other related disclosure in this Proxy Statement.”

Vote Required

The affirmative vote from the holders of a majority of the shares present in person or represented by proxy and entitled to vote at the Meeting on the proposal to approve the Compensation of our Named Executive Officers on a non-binding, advisory basis is required for approval of this proposal. Abstentions and broker non-votes will have no effect on this proposal.

Our Board of Directors recommends a vote in favour for the approval of the compensation of our named executive officers.

Proposal 4

Approval, on an Advisory (Non-Binding) Basis, of the Frequency of Future Advisory Votes on the Compensation of our Named Executive Officers

In accordance with the Dodd-Frank Act, we request that our stockholders cast a non-binding, advisory vote regarding the frequency with which we should include in future annual proxy statements a shareholder advisory vote to approve the compensation of our named executive officers. By voting on this proposal, shareholders may indicate whether they would prefer that we provide for such a shareholder advisory vote at future Annual and Special Meetings every one year, every two years or every three years. Shareholders may also abstain from the vote.

After considering the benefits and consequences of each alternative, our Board recommends that the advisory vote on the compensation of our Company’s Named Executive Officers be submitted to the shareholders once every three years.

Our Board believes that a triennial advisory vote makes sense for our Company and its shareholders for the following reasons:

While our Board believes that its recommendation is appropriate at this time, shareholders are not voting to approve or disapprove that recommendation, but are instead asked to indicate their preference, on an advisory basis, as to whether the non-binding shareholder advisory vote on the approval of our executive officer compensation practices should be held every year, every two years, or every three years. The frequency option that receives votes from the holders of at least a majority of shares present or represented and voting at the Annual and Special Meeting will be considered the preferred frequency of future advisory votes on the compensation of our named executive officers by our shareholders. Our Board values the opinions of our shareholders in this matter, and, to the extent there is any significant vote in favor of one frequency over the other options, even if fewer than a majority of the votes are cast, our Board will consider the shareholders’ concerns and evaluate any appropriate next steps. However, because this vote is advisory and not binding on the Board or Lexaria in any way, the Board may decide that it is in the best interests of our shareholders and Lexaria to hold an advisory vote on executive compensation more or less frequently than the option indicated by our shareholders.

Vote Required

The affirmative vote from the holders of a majority of the shares present in person or represented by proxy and entitled to vote at the Meeting on the frequency of seeking future advisory votes on executive compensation on a non-binding, advisory basis is required for approval of either a one, two or three year frequency. Abstentions and broker non-votes will have no effect on this proposal.

Board Recommendation

The Board of Directors unanimously recommends a vote of “THREE YEARS” regarding the non-binding frequency of future advisory votes on the compensation of our named executive officers.

Proposal 5

The Warrant Exercise Proposal

On October 14, 2024, the Company entered into a securities purchase agreement (the “SPA”) with an institutional investor (such SPA having been attached as an exhibit to the Form 8-K filed by the Company on October 16, 2024) pursuant to which we issued, in a registered direct offering, 1,633,987 shares of common stock and, in a concurrent private placement, warrants to purchase an aggregate 4,551,019 shares of common stock (“Warrants”) at less than the “Minimum Price” as defined in Nasdaq Rule 5635(the “Financing”). The issuance of the Warrants and the shares of common stock that are issuable pursuant to the exercise of the Warrants, represent a “20% Issuance” as defined in Nasdaq Rule 5635 and therefore requires shareholder approval, such requirement also being formalized in the SPA to occur within 90 days of closing the Financing. The Warrants are exercisable at a price of $3.06 per share until five years from the date of shareholder approval of the issuance of the Warrants and the Company must file a registration statement to register the shares issuable upon exercise of the Warrants and use commercially reasonable efforts to keep such registration statement effective at all times until the Warrants have been fully exercised

Of the 4,551,019 Warrants issued, 2,917,032 Warrants represent a replacement of 2,917,032 share purchase warrants initially issued on April 30, 2024 and having an exercise price of $4.75 per share, which were concurrently cancelled as part of the investor’s obligations under the SPA. Should all of the Warrants be exercised for cash, the Company would receive gross proceeds of over $13.9 million.

Pursuant to the Financing, the Company also issued 57,190 share purchase warrants to designees of the placement agent (the “Agent Warrants”). The Agent Warrants are exercisable to purchase up to 57,190 shares of common stock of the Company at an exercise price of $3.285 per share for a period of five years from the date of shareholder approval of the issuance of the Agent Warrants. Should all of the Agent Warrants be exercised for cash, the Company would receive gross proceeds of over $187,000.

Should the Warrants or Agent Warrants be exercised at a time when there is no effective registration statement for the resale of the shares of common stock issuable thereunder, the holder thereof may, at its sole discretion, elect to exercise such warrants through a cashless exercise, in which case the holder would receive upon such exercise the net number of shares of common stock determined according to a formula set out in the certificate representing such warrants (the “Certificate”).

The exercise price of the Warrants and Agent Warrants and the number of shares of common stock issuable thereunder, are subject to adjustment in the event of any stock dividend or split, reverse stock split, recapitalization, reorganization or similar transaction.

A holder will not have the right to exercise any portion of the Warrants or Agent Warrants, as applicable, if the holder (together with its affiliates) would beneficially own in excess of 4.99% (or, upon election of the holder, 9.99%) of the number of shares of our common stock outstanding immediately after giving effect to the exercise. However, any holder may increase or decrease such percentage, provided that any increase will not be effective until the 61st day after such election.

In the event of a Fundamental Transaction (as such term is defined in the Certificate), any resulting successor entity will succeed to, and be substituted for the Company, and may exercise every right and power that the Company may exercise and will assume all of its obligations under the Warrants or Agent Warrants, as applicable, with the same effect as if such successor entity had been named in the Certificate itself. If holders of Common Stock are given a choice as to the securities, cash, or property to be received in a Fundamental Transaction, then the holder shall be given the same choice as to the consideration it receives upon any exercise of the Warrants or Agent Warrants, as applicable, following such Fundamental Transaction. In addition, the successor entity, at the request of holders of the noted warrants, will be obligated to purchase any unexercised portion of such warrants in accordance with the terms thereof. Notwithstanding the foregoing, in the event of a Fundamental Transaction, the holders of the Warrants or Agent Warrants, as applicable, have the right to require the Company or a successor entity to redeem such warrants for cash in the amount of the Black Scholes Value (as defined in the Certificate) of the unexercised portion of such warrants concurrently with or within 30 days following the consummation of a Fundamental Transaction. However, in the event of a Fundamental Transaction which is not in our control, including a Fundamental Transaction not approved by the Company’s Board, the holders of the Warrants or Agent Warrants, as applicable, will only be entitled to receive from the Company or its successor entity, as of the date of consummation of such Fundamental Transaction, the same type or form of consideration (and in the same proportion), at the Black-Scholes Value of the unexercised portion of such warrants that is being offered and paid to the holders of Common Stock in connection with the Fundamental Transaction, whether that consideration is in the form of cash, stock or any combination of cash, and stock, or whether the holders of our Common Stock are given the choice to receive alternative forms of consideration in connection with the Fundamental Transaction.

Potential Consequences if the Warrant Exercise Proposal is Not Approved

If the Warrant Exercise Proposal is not approved at the Meeting, the holders of the Warrants and Agents Warrants will be unable to exercise their respective warrants and therefore the Company will not be able to receive the gross proceeds from such exercises of approximately $14 million. Loss of these potential funds could delay or prevent our ability to proceed with our intended research study program. Further, the SPA provides that, if shareholder approval is not received for the issuance of the Warrants at this meeting, the Company shall be required to hold additional shareholder meetings each within 90 days of the last meeting to once again seek approval to the issuance of the Warrants, thus resulting in the Company having to incur additional costs and time.

Accordingly, we are asking our shareholders to vote in favour of the following resolution at the Annual and Special Meeting:

“RESOLVED, that the issuance of 4,551,019 Warrants, bearing an exercise price of $3.06 per share of common stock and exercisable for the issuance of up to 4,551,019 shares of common stock until January 14, 2030, for aggregate gross proceeds of over $13.9 million; and the issuance of 57,190 Agent Warrants bearing an exercise price of $3.285 per share of common stock and exercisable for the issuance of up to 57,190 shares of common stock until January 14, 2030 for aggregate gross proceeds of over $187,000, with such issuances constituting a 20% Issuance pursuant to Nasdaq Rule 5635, is hereby authorized, confirmed and approved.”

Required Vote

The affirmative vote from the holders of a majority of the shares present in person or represented by proxy and entitled to vote on the Warrant Exercise Proposal at the Meeting is required for approval of this proposal. Abstentions and broker non-votes will have no effect on this proposal.

Our Board of Directors recommends that you vote FOR the Warrant Exercise Proposal in order to allow the Company to potentially receive ~$14 million in revenues and avoid the time and cost associated with holding a subsequent special meeting of shareholders.

Proposal 6

Ratification and Approval of Acts of the Directors

Since the date of the last meeting of shareholders, the Board of Directors have effected transactions, entered into contracts and have completed other lawful acts by and on behalf of the Company. At the Meeting, the shareholders entitled to vote who are present in person or via proxy will be asked to approve the following resolution by way of a simple majority:

“RESOLVED THAT the lawful acts of the Directors made by and on behalf of the Company and effected since the date of the last shareholders’ meeting are hereby ratified and approved.”

Required Vote

The affirmative vote from the holders of a majority of the shares present in person or represented by proxy and entitled to vote on the Ratification of the Acts of Directors at the Meeting is required for approval of this proposal. Abstentions and broker non-votes will have no effect on this proposal.

Our Board of Directors recommends a vote in favour for the ratification of the Directors’ lawful acts.

INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON

No Director, executive officer, or nominee for election as a Director of the Company and no associate of any of the foregoing persons has any substantial interest, direct or indirect, by security holding or otherwise, in any matter to be acted upon at the Meeting.

“HOUSEHOLDING” OF PROXY MATERIALS

The SEC permits companies and intermediaries such as brokers to satisfy the delivery requirements for proxy statements and Annual Reports with respect to two or more shareholders sharing the same address by delivering a single Proxy Statement or Annual Report, as applicable, addressed to those shareholders. This process, which is commonly referred to as “householding”, potentially provides extra conveniences for shareholders and cost savings for companies.

Although we do not intend to household for our shareholders of record, some brokers household our proxy materials and Annual Reports, delivering a single copy of the Proxy Statement or Annual Report to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that it will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate copy of the Proxy Statement or Annual Report, or if you are receiving multiple copies of either document and wish to receive only one, please notify your broker. Shareholders who currently receive multiple copies of the Proxy Statement at their address from their brokers and would like to request “householding” of their communications should contact their brokers.

SHAREHOLDER PROPOSALS

Shareholders may submit proposals or director nominations for inclusion by the Company in next year’s proxy statement. For your proposal or director nomination to be considered for inclusion in our proxy statement for next year’s Annual and Special Meeting, your written proposal must be received by our corporate secretary at our principal executive office no later than 120 days before the anniversary of the release date of this Proxy Statement, unless the date of next year’s Annual and Special Meeting is changed by more than thirty (30) days from the date of this year’s Meeting. If the date of next year’s Annual and Special Meeting is changed by more than thirty (30) days from the date of this year’s Meeting, then the deadline is a reasonable time before the Company begins to print and mail its proxy materials. After such date, any shareholder proposal will be considered untimely.

If we change the date of next year’s Annual and Special Meeting by more than thirty (30) days from the date of this year’s Meeting, then the deadline is a reasonable time before we begin to print and distribute our proxy materials. You should also be aware that your proposal must comply with SEC regulations regarding inclusion of shareholder proposals in company-sponsored proxy materials, and with any provision in our bylaws regarding the same.

Lexaria Bioscience Corp. expects to hold its next Annual Meeting of shareholders in February 2026 with proxy materials expected to be published in December 2025. Proposals from shareholders intended to be present at the next Annual Meeting of shareholders should be addressed to Lexaria Bioscience Corp., 100 – 740 McCurdy Road, Kelowna, British Columbia, V1X 2P7, Canada, Attention: Corporate Secretary. We must receive the proposals by September 15, 2025. Upon receipt of any such proposal, we shall determine whether or not to include any such proposal in the Proxy Statement and proxy in accordance with applicable law. It is suggested that shareholders forward such proposals by Certified Mail-Return Receipt Requested. After September 15, 2025, any shareholder proposal will be considered to be untimely.

As to any proposal that a shareholder intends to present to shareholders other than by inclusion in our proxy statement for our 2026 Annual Meeting of shareholders, the proxies named in our proxy for that meeting will be entitled to exercise their discretionary voting authority on that proposal unless we receive notice of the matter to be proposed not later than Monday, September 15, 2025. Even if proper notice is received on or prior to that date, the proxies named in our proxy for that meeting may nevertheless exercise their discretionary authority with respect to such matter by advising shareholders of that proposal and how they intend to exercise their discretion to vote on such matter, unless the shareholder making the proposal solicits proxies with respect to the proposal to the extent required by Rule 14a-4(c)(2) under the Securities Exchange Act of 1934.

With respect to business to be brought before the Meeting, we have received no notices from our shareholders that we were required to include in this proxy statement.

WHERE YOU CAN FIND MORE INFORMATION

We file annual and other reports, proxy statements and other information with the SEC and these documents are available to the public from the SEC’s website located at www.sec.gov. Additional information regarding our Company and our business activities is available on the SEDAR+ website located at www.sedarplus.ca and at our Company’s website located at http://www.lexariabioscience.com. Our Company’s financial information is provided in our Company’s audited financial statements and related management discussion and analysis for its most recently completed financial year end may be viewed on the SEDAR+ website.

SOLICITATION OF PROXIES

This solicitation is made on behalf of the Board of Directors. We will bear the costs of preparing, mailing, online processing and other costs of the proxy solicitation made by the Board of Directors. Certain of our officers and employees may solicit the submission of proxies authorizing the voting of common shares in accordance with the recommendations of the Board of Directors. Such solicitations may be made by telephone, facsimile transmission or personal solicitation. No additional compensation will be paid to such officers, directors or regular employees for such services. We will reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for reasonable out-of-pocket expenses incurred by them in sending proxy material to stockholders.

OTHER MATTERS

Our Board of Directors does not intend to bring any other business before the Meeting and, so far as is known to our Board of Directors, no matters are to be brought before the Meeting except as specified in the Notice of Meeting. If any other matters are properly brought before the Meeting, it is the intention of the persons named on the proxy to vote the common shares represented by the proxy on such matters in accordance with their judgment.

BY ORDER OF THE BOARD OF DIRECTORS