Lexaria Bioscience Corp (LEXX)

[Shawking]

Ted Ohashi
"One bit of news is that the U.S. Food and Drug Administration (FDA) has banned the sale of Juul ecigarettes from the United States market. Apart from the fact that Juul did not provide the data needed to convince the FDA to allow marketing to continue. There may have been a little bit of vindictiveness in the FDA’s action as it also mentioned that Juul had a disproportionate impact on youth vaping. Altria also has an interest in Lexaria Bioscience (NASDAQ: LEXX) (NASDAQ: LEXXW) nicotine. Although having their $12.8 billion investment in Juul effectively incinerated it may change Altria’s direction toward ingested delivery of nicotine.

"Lexaria Bioscience (NASDAQ: LEXX) (NASDAQ: LEXXW) announced signing two agreements with
Atlanta-based BevNology LLC ("BevNology").

1. The first agreement is a manufacturing operating agreement that expands production capabilities for LEXX’s own growing list of business-to-business (B2B) clientele interested in
purchasing DehydraTECH-powered active ingredients for consumer packaged-goods
brands. A new, state-of-the-art processing facility custom-built by BevNology is operational
that increases and broadens production capacity and is currently serving Lexaria's corporate clients. Lexaria has moved and installed all required commercial DehydraTECH manufacturing equipment into BevNology's new facility as it prepares for future growth in its B2B ingredient processing business.
2. The second agreement is a commercial license empowering BevNology to offer DehydraTECH products with active ingredients derived from hemp including cannabidiol (CBD) under BevNology and partnered brands. For powdered DehydraTECH formulations this agreement is non-exclusive. For liquid
ehydraTECH formulations, where BevNology has
highly specialized skills and capabilities, the license is non-exclusive in most areas of the
world but includes limited exclusivity rights in the U.S. only that require certain minimum
fee payments in order to maintain those rights. Lexaria will receive royalties from BevNology as a result of their utilization of this license. The only countries specifically excluded
under this license are Japan, the Republic of Korea, and the People's Republic of China.

"These are two separate agreements. The first is a new agreement to have BevNology manufacture the products that LEXX sells to commercial customers in facilities that LEXX CEO describes as “class leading.” The second is a more conventional commercial contract that licenses BevNology to use LEXX’s technology in return for royalties on sales.
Conclusion: I recently described the series of recent commercial agreements announced by Lexaria
Bioscience (NASDAQ: LEXX) (NASDAQ: LEXXW) as adding grains of sand on the scales measuring LEXX’s valuation in the market. You never know which deal causes the scale to turn sharply in LEXX’s favour. It is clear, however, that shift is taking place."
Here is some news that impacted LEXX just this month.
• June 21, 2022: BevNology commercial and manufacturing contract.
• June 17, 2022: I reported between June 6 - 17, 2022 the number of LEXX reported short sales divided by the total volume of off exchange trading declined sharply from a Short Volume Ratio of 43.67 to 8.18. The Short Volume Ratio is the Short Volume divided by Total off exchange Volume reported.
• June 8, 2022: AnodGen Bioceuticals commercial sales agreement
• June 6, 2022: Pre-IND meeting request letter with U.S. Food and Drug Administration
• June 3, 2022: Premier Wellness Science sales agreement including Premier’s worldwide independent assessment of DehydraTECH™ as their technology of choice
• June 2, 2022: Valcon Medical in the European Market
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Conclusion: It appears to me that the recent acceleration in LEXX’s B2B commercial sales have not
been lost on investors. At the same time, the even more explosive growth potential comes from the steps taken on the hypertension front with the U.S. FDA.
What investors see is the increasing credibility of LEXX’s business model to generate sufficient B2B royalty revenue to sustain operations. It should not be forgotten that royalty revenue is the equivalent of gross profit for other operators because there is no ‘cost of goods sold’ associated.
Finally, investors should remember that the business plan always contemplated separating the different
applications of the technology. This means the DehydraTECH™ application in CBD is separate from its application in nicotine that is separate from antiviral drugs that is separate from PDE5 inhibitors and more. The “blue sky” implication is with hypertension it is possible that LEXX could replicate the GW
Pharma success or see it completed by a partner and it is within the realm of possibility that it could be repeated many times over. All of this is speculative but it is, at least, within the realm of possibilities.
https://4495825a-d729-4d8f-ade8-e78f828e1c8d.usrfiles.com/ugd/449582_c36ce2a24ea94e54bae68b89f35a09f2.pdf