Although there were so many positive research findings with the technology over the years, and included in this report, it was hard not to overlook the current company situation during these troubling COVID-19 times...starting with the forthcoming dilution
The number of shares of common stock shown above to be outstanding after this offering is based on 89,587,090 shares outstanding as of June 3, 2020 and assumes the exercise of the warrants held by the selling stockholders into 11,342,106 shares of common stock.
Common stock outstanding after this offering: 100,929,196
Our revenues now are primarily generated from out licensing of our Technology. We should be considered to be a start-up: the revenue recognized for the fiscal year ended August 31, 2019 was $222,610 and for the six months ended February 29, 2020 was $169,381
The Company is encountering significant challenges in executing its business plan and normal business operations as a result of COVID-19 and does not have sufficient resources to withstand a protracted term during which most business activities are curtailed. We have implemented cost containment initiatives to reduce operating expenses and preserve cash that include dismissal of one employee, termination of contracts with two consultants and reduction of compensation payable to certain other consultants as a result of the COVID-19 pandemic. We have not had to close operations or locations as our contractors and staff can work remotely and our third-party fulfillment centers continue to operate.
We are monitoring our licensees and are working with them, where possible, to prevent default and contract terminations. In some cases we have had to issue termination of contract notices in accordance to provisions within our contracts with licensees. Subsequent to February 29, 2020 these terminations resulted in $25,000 in write offs of accounts receivable.
On May 5, 2020 the Company terminated the definitive 5-year agreement, entered into by its subsidiary Lexaria Canpharm ULC, to provide the Technology to a private California-based company for its utilization in certain THC-based beverages which was originally announced on April 24, 2019.
Because we have generated only minimal revenue from our business and cannot anticipate when we will be able to generate meaningful revenue from our business, we will need to raise additional funds to conduct and grow our business. We do not currently have sufficient financial resources to completely fund the development of our business plan. We anticipate that we will need to raise further financing. We do not currently have any arrangements for financing and we can provide no assurance to investors that we will be able to find such financing if required. The most likely source of future funds presently available to us is through the sale of equity capital. Any sale of share capital will result in dilution to existing security-holders.
