Lexaria Announces $5 Million Registered Direct Offering Priced At-The-Market Under Nasdaq Rules

Rhea-AI Summary

Lexaria Bioscience Corp. (NASDAQ:LEXX)(NASDAQ:LEXXW) has announced a $5 million registered direct offering priced at-the-market under Nasdaq rules. The company will sell 1,633,987 shares of common stock at $3.06 per share. Additionally, Lexaria will issue unregistered warrants to purchase up to 4,551,019 shares at the same price in a concurrent private placement.

The warrants will be exercisable after stockholder approval and expire five years later. H.C. Wainwright & Co. is the exclusive placement agent. The offering is expected to close around October 16, 2024. Lexaria plans to use the net proceeds for working capital and general corporate purposes. Upon closing, 2,917,032 outstanding warrants issued in April 2024 will be cancelled.

Positive

• Secured $5 million in gross proceeds through a registered direct offering
• Priced at-the-market under Nasdaq rules, potentially indicating fair market value
• Additional potential funding through warrant exercise
• Strengthens working capital position

Negative

• Potential dilution of existing shareholders due to new share issuance
• Additional potential dilution if warrants are exercised
• Cancellation of previously issued warrants may impact existing warrant holders

Insights

Financial Analyst

This $5 million registered direct offering is a significant development for Lexaria Bioscience Corp. The company is issuing 1,633,987 shares at $3.06 per share, along with warrants for an additional 4,551,019 shares at the same price. This capital raise is substantial, considering Lexaria's market cap of about $48.8 million.

The offering is priced at-the-market, which suggests fair valuation. However, the dilutive effect is considerable, potentially increasing the share count by over 10% initially and up to 40% if all warrants are exercised. This could pressure the stock price in the short term.

Positively, the funds will bolster Lexaria's working capital, potentially accelerating their drug delivery platform development. The concurrent cancellation of 2,917,032 warrants from April 2024 partially offsets the dilution, showing management's effort to balance shareholder interests.

Investors should monitor how effectively Lexaria deploys this capital to drive growth and advance its technology. The success of this offering in supporting the company's strategic objectives will be important for long-term value creation.

KELOWNA, BC / ACCESSWIRE / October 15, 2024 / Lexaria Bioscience Corp. (NASDAQ:LEXX)(NASDAQ:LEXXW) (the "Company" or "Lexaria"), a global innovator in drug delivery platforms, today announced that it has entered into a definitive agreement for the purchase and sale of 1,633,987 shares of common stock at a purchase price of $3.06 per share in a registered direct offering priced at-the-market under Nasdaq rules. In a concurrent private placement, the Company will issue unregistered warrants to purchase up to 4,551,019 shares of common stock at an exercise price of $3.06 per share. The warrants will be exercisable beginning on the effective date of stockholder approval of the issuance of the shares issuable upon exercise of the warrants (the "Stockholder Approval Date") and will expire five years from the Stockholder Approval Date. The closing of the offering is expected to occur on or about October 16, 2024, subject to the satisfaction of customary closing conditions.

H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering.

The gross proceeds to the Company from the offering are expected to be approximately $5 million before deducting placement agent fees and other offering expenses payable by the Company. The Company intends to use the net proceeds from the offering for working capital and other general corporate purposes.

The common stock (but not the unregistered warrants and the shares of common stock underlying the warrants) described above are being offered by the Company pursuant to a "shelf" registration statement on Form S-3 (File No. 333-262402) that was declared effective by the Securities and Exchange Commission (the "SEC") on February 4, 2022. The offering of the shares of common stock in the registered direct offering is being made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. A final prospectus supplement and accompanying prospectus relating to the registered direct offering will be filed with the SEC. Electronic copies of the final prospectus supplement and accompanying prospectus may be obtained, when available, on the SEC's website at http://www.sec.gov and may also be obtained, when available, by contacting H.C. Wainwright & Co., LLC at 430 Park Avenue, 3rd Floor, New York, New York 10022, by phone at (212) 856-5711 or e-mail at placements@hcwco.com.

The unregistered warrants described above are being offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and/or Regulation D promulgated thereunder and, along with the shares of common stock underlying such unregistered warrants, have not been registered under the Securities Act, or applicable state securities laws. Accordingly, the unregistered warrants and underlying shares of common stock may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws.

In addition, effective on the closing of the offering certain outstanding warrants to purchase 2,917,032 shares of the Company's common stock issued in April 2024 will be cancelled.

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

About Lexaria Bioscience Corp.
Lexaria Bioscience Corp.'s patented drug delivery technology, DehydraTECH™, improves the way active pharmaceutical ingredients (APIs) enter the bloodstream by promoting more effective oral delivery. Since 2016, DehydraTECH has repeatedly demonstrated the ability to increase bio-absorption with cannabinoids, antiviral drugs, GLP-1 and more. DehydraTECH has also evidenced an ability to deliver some drugs more effectively across the blood brain barrier. Lexaria operates a licensed in-house research laboratory and holds a robust intellectual property portfolio with 46 patents granted and many patents pending worldwide. For more information, please visit www.lexariabioscience.com.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This press release includes forward-looking statements. Statements as such term is defined under applicable securities laws. These statements may be identified by words such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may," "could," "should," "will," and other similar expressions. Such forward-looking statements in this press release include, but are not limited to, statements by the Company relating to the completion of the offering, the satisfaction of customary closing conditions related to the offering, the intended use of proceeds from the offering, receipt of Stockholder Approval and the Company's ability to carry out research initiatives, receive regulatory approvals or grants or experience positive effects or results from any research or study. Such forward-looking statements are estimates reflecting the Company's best judgment based upon current information and involve a number of risks and uncertainties, and there can be no assurance that the Company will actually achieve the plans, intentions, or expectations disclosed in these forward-looking statements. As such, you should not place undue reliance on these forward-looking statements. Factors which could cause actual results to differ materially from those estimated by the Company include, but are not limited to, market and other conditions, government regulation and regulatory approvals, managing and maintaining growth, the effect of adverse publicity, litigation, competition, scientific discovery, the patent application and approval process, potential adverse effects arising from the testing or use of products utilizing the DehydraTECH technology, the Company's ability to maintain existing collaborations and realize the benefits thereof, delays or cancellations of planned R&D that could occur related to pandemics or for other reasons, and other factors which may be identified from time to time in the Company's public announcements and periodic filings with the US Securities and Exchange Commission on EDGAR. The Company provides links to third-party websites only as a courtesy to readers and disclaims any responsibility for the thoroughness, accuracy or timeliness of information at third-party websites. There is no assurance that any of Lexaria's postulated uses, benefits, or advantages for the patented and patent-pending technology will in fact be realized in any manner or in any part. No statement herein has been evaluated by the Food and Drug Administration (FDA). Lexaria-associated products are not intended to diagnose, treat, cure or prevent any disease. Any forward-looking statements contained in this release speak only as of the date hereof, and the Company expressly disclaims any obligation to update any forward-looking statements or links to third-party websites contained herein, whether as a result of any new information, future events, changed circumstances or otherwise, except as otherwise required by law.

INVESTOR CONTACT:
George Jurcic - Head of Investor Relations
ir@lexariabioscience.com
Phone: 250-765-6424, ext 202

SOURCE: Lexaria Bioscience Corp.

View the original press release on accesswire.com

FAQ

What is the size and price of Lexaria's (LEXX) registered direct offering?

Lexaria Bioscience Corp. (LEXX) announced a $5 million registered direct offering, selling 1,633,987 shares of common stock at $3.06 per share.

When is the expected closing date for Lexaria's (LEXX) offering?

The offering is expected to close on or about October 16, 2024, subject to customary closing conditions.

How does Lexaria (LEXX) plan to use the proceeds from the offering?

Lexaria intends to use the net proceeds from the offering for working capital and other general corporate purposes.

What warrants are included in Lexaria's (LEXX) concurrent private placement?

Lexaria will issue unregistered warrants to purchase up to 4,551,019 shares of common stock at an exercise price of $3.06 per share in a concurrent private placement.