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

Rhea-AI Summary

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

The warrants will be exercisable after stockholder approval and expire five years from that date. H.C. Wainwright & Co. acted as the exclusive placement agent. Lexaria plans to use the net proceeds for working capital and general corporate purposes. The offering was made under a shelf registration statement, and a final prospectus supplement was filed with the SEC.

Positive

• Raised $5 million in gross proceeds through registered direct offering
• Issued additional warrants for potential future funding
• Strengthened working capital position

Negative

• Potential dilution of existing shareholders due to new share issuance
• Cancellation of 2,917,032 previously issued warrants from April 2024

Insights

Financial Analyst

This $5 million registered direct offering is a significant development for Lexaria Bioscience Corp., a small-cap biotech company. The offering, priced at-the-market, includes both common stock and warrants, which could potentially lead to additional capital in the future.

Key points to consider:

• The $5 million gross proceeds will bolster Lexaria's working capital, important for a company with a market cap of only $45 million.
• The offering price of $3.06 per share suggests investor confidence in the current valuation.
• The concurrent private placement of warrants could lead to additional $13.9 million in future funding if fully exercised.
• The cancellation of previously issued warrants may help mitigate potential dilution.

While this financing strengthens Lexaria's balance sheet, investors should monitor the company's burn rate and progress in drug delivery platform development to assess long-term value creation potential.

Legal Expert

This transaction involves complex securities law considerations. Key legal aspects include:

• The use of a shelf registration for the common stock offering, streamlining the process.
• A private placement of unregistered warrants under Section 4(a)(2) of the Securities Act, avoiding immediate registration requirements.
• The need for stockholder approval for the issuance of shares upon warrant exercise, which could delay potential capital inflow.
• Compliance with Nasdaq rules for at-the-market offerings, maintaining listing standards.

The structure demonstrates a balance between immediate capital needs and future flexibility. However, investors should be aware that the unregistered warrants have resale restrictions and the company will need to manage future dilution carefully. The involvement of H.C. Wainwright as placement agent adds credibility to the transaction.

KELOWNA, BC / ACCESSWIRE / October 16, 2024 / Lexaria Bioscience Corp. (Nasdaq:LEXX; LEXXW) (the "Company" or "Lexaria"), a global innovator in drug delivery platforms, today announced that it has closed its previously announced registered direct offering priced at-the-market under Nasdaq rules for the purchase and sale of 1,633,987 shares of common stock at a purchase price of $3.06 per share. In a concurrent private placement, the Company issued 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.

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

The gross proceeds to the Company from the offering were 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 shares of common stock (but not the unregistered warrants and the shares of common stock underlying the unregistered warrants) described above were 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 was 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 were filed with the SEC. Electronic copies of the final prospectus supplement and accompanying prospectus may be obtained on the SEC's website at http://www.sec.gov or 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 were 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, 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 was the price per share in Lexaria's (LEXX) recent offering?

Lexaria Bioscience Corp. (LEXX) sold shares at $3.06 per share in its recent registered direct offering.

How many shares did Lexaria (LEXX) sell in the October 2024 offering?

Lexaria Bioscience Corp. (LEXX) sold 1,633,987 shares of common stock in its October 2024 registered direct offering.

What is the exercise price of the warrants issued by Lexaria (LEXX) in the concurrent private placement?

The warrants issued by Lexaria (LEXX) in the concurrent private placement have an exercise price of $3.06 per share.

How does Lexaria (LEXX) intend to use the proceeds from the October 2024 offering?

Lexaria Bioscience Corp. (LEXX) intends to use the net proceeds from the offering for working capital and other general corporate purposes.