Financial Analysis

13. Commitments, Significant Contracts and Contingencies Right of Use Assets - Operating Lease The corporate office and R&D laboratory are located in Kelowna, British Columbia, Canada. The related lease was renewed until November 15, 2028. In addition to minimum lease payments, the lease requires us to pay property taxes and other operating costs which are subject to annual adjustments. May 31, 2026 August 31, 2025 Right of use assets - operating leases $ 106,816 $ 134,843 Amortization (22,401 ) (28,027 ) Total lease assets $ 84,415 $ 106,816 Liabilities: 109,319 137,366 Lease payments (28,009 ) (37,094 ) Interest accretion 5,403 9,047 Total lease liabilities $ 86,714 $ 109,319 Total operating lease cost $ 84,415 $ 106,816 Operating cash flows for lease $ (28,009 ) $ (37,094 ) Remaining lease term 2.46 Years 3.21 Years Discount rate 7.25 % 7.25 % Pursuant to the terms of the Companys lease agreements in effect, the following table summarizes the Companys maturities of operating lease liabilities as of May 31, 2026: 2026 $ 9,336 2027 38,642 2028 38,901 2029 8,104 Thereafter - Total lease payments 94,983 Less: imputed interest (8,269 ) Present value of operating lease liabilities 86,714 Less: current obligations under leases (33,035 ) Total $ 53,679 …

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Nine months Ended May 31 2026 2025 IP Licensing $ 20,000 $ 522,000 B2B - 9,923 Total $ 20,000 $ 531,923

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11. Income Taxes For the nine months ended May 31, 2026, the Company recognized a provision for income taxes of $4,403 for its Kelowna Management Services Corp. subsidiary. Net deferred tax assets are fully offset by a valuation allowance as the Company believes it is more likely than not that the benefit will not be realized.

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10. Revenues A breakdown of our revenues by type for the nine months ended May 31, 2026, and May 31, 2025, are as follows: Nine months Ended May 31 2026 2025 IP Licensing $ 20,000 $ 522,000 B2B - 9,923 Total $ 20,000 $ 531,923 The Company recognized $20,000 and $522,000 in licensing revenue for the nine months ended May 31, 2026, and May 31, 2025, respectively. Licensing revenue consists of IP licensing fees for transfer of the DehydraTECH technology in line with definitive agreements and includes non-refundable minimum performance fees. During the nine-month period ended May 31, 2026, and May 31, 2025, the Company recognized B2B product revenues of $0 and $9,923, respectively, that relate to sales of our intermediate products for use by B2B customers in their products.

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14. Segment Information The Company has one reportable segment: IP licensing. The IP licensing segment generates revenue from customers by licensing its proprietary DehydraTECH technology. The IP licensing segment's accounting policies are the same as those described in the summary of significant accounting policies at Note 2. The chief operating decision maker, our Chief Executive Officer, assesses performance of the IP Licensing segment and makes resource allocation decisions based on cash flows that are also reported on the Consolidated Statements of Cash Flows. The measure of segment assets is reported on the balance sheet as consolidated total assets. The measure of segment profit or loss is net loss as per the Consolidated Statements of Operations and Comprehensive Loss. The Company invested in additions to intellectual property and purchases of equipment totaling $46,445 and $40,816, respectively, during the nine months ended May 31, 2026, and $60,496 and $24,645, respectively during the nine months ended May 31, 2025. Nine months Ended May 31, IP Licensing Segment 2026 2025 Licensing revenue $ 20,000 $ 522,000 less: Research and Development 2,117,562 6,356,637 Consulting 333,355 453,690 Wages & Salaries 1,086,706 1,468,759 Legal and professional 483,164 295,252 Accounting and audit 178,299 154,638 Advertising and promotions 279,467 388,128 Depreciation and amortization 55,166 66,426 Office and miscellaneous (a) 466,828 454,739 Travel 28,691 50,171 Impairment Loss …

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2. Significant Accounting Policies The significant accounting policies of the Company are consistent with those of our audited financial statements on Form 10-K for the year ended August 31, 2025. Basis of Consolidation These unaudited interim consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries: Lexaria CanPharm ULC, Lexaria CanPharm Holding Corp., PoViva Corp., Lexaria Hemp Corp., Kelowna Management Services Corp., Lexaria Nutraceutical Corp., Lexaria (AU) Pty Ltd., and Lexaria Pharmaceutical Corp., and our 83.333% owned subsidiary Lexaria Nicotine LLC with the remaining 16.667% owned by Altria Ventures Inc., an indirect wholly owned subsidiary of Altria Group, Inc. All significant intercompany balances and transactions have been eliminated upon consolidation. Basis of Presentation The Companys unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with United States generally accepted accounting principles (US GAAP) have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of results for a full year or for any subsequent period. These unaudited interim consolidate …

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12. Stockholders' Equity During the nine months ended May 31, 2026, the Company completed the following issuances of common shares and warrants: 1. On September 26, 2025, the Company, pursuant to a Securities Purchase Agreement, issued 2,666,667 shares of common stock at a purchase price of $1.50 per share for gross proceeds of $4.0 million. Share issuance costs of $0.5 million were charged to additional paid in capital. The shares were registered pursuant to a take down of the Companys Form S-3 registration statement. Concurrently, the Company issued 2,666,667 share purchase warrants, entitling the holders thereof to purchase up to 2,666,667 shares of common stock at a price of $1.37 per share for a period of five years from the effective date of the S-1 Registration Statement registering the shares of common stock issuable upon exercise of the warrants. We also issued H.C. Wainwright, the exclusive placement agent for the offering, warrants to purchase up to 93,333 shares at an exercise price of $1.875 per share. HCW was paid 7% of the gross proceeds and was reimbursed $70,000 for its expenses and $15,950 in closing fees. 2. On December 14, 2025, the Company, pursuant to a Securities Purchase Agreement, issued 2,661,600 shares of common stock at a purchase price of $1.315 per share for gross proceeds of $3.5 million. Share issuance costs of $0.5 million were charged to additional paid in capital. The shares were registered pursuant to a take down of the Companys Form S-3 re …

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