Lexaria Announces Closing of $2 Million Registered Direct Offering of Common Stock

Rhea-AI Summary

Lexaria Bioscience (NASDAQ: LEXX) has successfully closed a $2 million registered direct offering of common stock with a single institutional investor. The deal was structured at $1.00 per share for 2,000,000 shares, with an option for pre-funded warrants in lieu of shares.

Key highlights of the offering:

• H.C. Wainwright & Co. served as the exclusive placement agent
• The offering was made under an effective S-3 shelf registration
• No additional warrants were issued except for pre-funded warrants
• Net proceeds will support working capital and general corporate purposes

CEO Richard Christopher emphasized the achievement of securing funding in challenging market conditions while minimizing shareholder dilution by avoiding additional warrant issuance. The offering was completed through a shelf registration statement that received SEC approval on January 30, 2025.

Positive

• Successfully raised $2 million in gross proceeds through registered direct offering
• No additional warrants issued beyond pre-funded warrants, minimizing dilutive impact on existing shareholders
• Secured investment from institutional investor in difficult market conditions

Negative

• Share offering price at $1.00 indicates low stock valuation
• Need for additional funding suggests cash flow concerns
• Dilution of existing shareholders through 2 million new shares issuance

Insights

Financial Capital Markets Analyst

Lexaria secured $2M funding but at potential dilution cost, with management mitigating impact by avoiding additional warrants during difficult market conditions.

Lexaria Bioscience has successfully closed a $2 million registered direct offering with a single institutional investor, priced at $1.00 per share. This financing represents the issuance of 2 million new shares, which introduces dilution for existing shareholders. However, management appears to have structured the deal with shareholder interests in mind, as CEO Richard Christopher explicitly highlighted their efforts to "minimize the dilutive impact" by avoiding the issuance of additional warrants beyond the pre-funded warrants included in the transaction.

The CEO's candid acknowledgment that this capital was raised in "an extremely difficult market" provides important context about the challenging financing environment Lexaria is navigating. Despite these headwinds, securing a clean $2 million investment from a single institutional investor rather than a more complex financing vehicle demonstrates some level of investor confidence in the company.

H.C. Wainwright & Co.'s involvement as the exclusive placement agent adds credibility to the transaction, as they're a recognized investment bank in the small-cap biotech space. The company's stated use of proceeds for "working capital and other general corporate purposes" is relatively broad and doesn't provide specific insights into strategic initiatives that might drive growth.

While securing funding provides operational flexibility and extends the company's runway, the $1.00 per share price point and CEO's market commentary suggest challenging circumstances. The balance between securing necessary capital and managing dilution appears to have been a key consideration in this financing.

KELOWNA, BC / ACCESS Newswire / April 28, 2025 / Lexaria Bioscience Corp. (NASDAQ:LEXX)(NASDAQ:LEXXW) (the "Company" or "Lexaria"), a global innovator in drug delivery platforms, today announced the closing of its previously announced registered direct offering with a single institutional investor for the purchase and sale of 2,000,000 shares of common stock (or pre-funded warrants in lieu thereof) at a purchase price of $1.00 per share (or per pre-funded warrant in lieu thereof) Other than the pre-funded warrants, no other warrants were issued to the institutional investor in the registered direct offering.

"We are pleased to have raised funds in what is an extremely difficult market," stated Richard Christopher, CEO of Lexaria. "Despite the related market challenges, we were able to successfully complete a transaction, during a particularly uncertain market period, which consciencely minimized the dilutive impact on our existing shareholders by avoiding the issuance of any new warrants in the deal, other than the pre-funded warrants."

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

The gross proceeds to the Company from the offering were $2.0 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 securities described above were offered by the Company pursuant to a "shelf" registration statement on Form S-3 (File No. 333-284407) that was declared effective by the Securities and Exchange Commission (the "SEC") on January 30, 2025. The offering of the securities 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 have been 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 and may also be obtained 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.

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. & DehydraTECH

DehydraTECH™ is Lexaria's patented drug delivery formulation and processing platform technology which improves the way a wide variety of drugs enter the bloodstream, always through oral delivery. DehydraTECH has repeatedly evidenced the ability to increase bio-absorption, reduce side-effects, and 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 48 patents granted and additional 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 use of proceeds from the offering and relating to 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 ACCESS Newswire

FAQ

How much did Lexaria (LEXX) raise in their April 2025 direct offering?

Lexaria (LEXX) raised $2 million in gross proceeds through a registered direct offering of common stock at $1.00 per share with a single institutional investor on April 28, 2025.

What is the price per share for Lexaria's (LEXX) April 2025 direct offering?

Lexaria's direct offering was priced at $1.00 per share (or per pre-funded warrant) for 2,000,000 shares of common stock.

How will Lexaria (LEXX) use the proceeds from their 2025 direct offering?

Lexaria plans to use the net proceeds from the offering for working capital and other general corporate purposes, after deducting placement agent fees and other offering expenses.

Who was the placement agent for Lexaria's (LEXX) 2025 direct offering?

H.C. Wainwright & Co. acted as the exclusive placement agent for Lexaria's direct offering.

What type of warrants were included in Lexaria's (LEXX) April 2025 offering?

Only pre-funded warrants were included in the offering. No other warrants were issued to the institutional investor in the registered direct offering.