On August 12, 2022, Lexaria Bioscience Corp. (the “Company”) entered into an equity distribution agreement (the “Agreement”) with Maxim Group LLC (the “Distribution Agent”) under which the Company may offer and sell, from time to time through the Distribution Agent, at its sole discretion, shares of its common stock, par value $0.001 per share (the “Common Stock”), having an aggregate offering price of up to $5,925,000. The issuance and sale, if any, of Common Stock by the Company under the Agreement will be pursuant to the Company’s Registration Statement on Form S3 (File No. 333262402) filed with the Securities and Exchange Commission (the “SEC”) and declared effective on February 4, 2022 (the “Registration Statement”), the prospectus supplement relating to the Offering filed with the SEC on August 12, 2022, and any applicable additional prospectus supplements related to the Offering that form a part of the Registration Statement.
Subject to the terms and conditions of the Agreement, the Distribution Agent may sell the Common Stock by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended. The Distribution Agent will use commercially reasonable efforts with its normal trading and sales practices to sell the Common Stock from time to time, based upon instructions from the Company (including any price, time or size limits or other customary parameters or conditions the Company may impose). The Company will pay the Distribution Agent a commission equal to up to three percent (3%) of the gross sales proceeds of any Common Stock sold through the Distribution Agent under the Agreement, and also has provided the Distribution Agent with certain indemnification rights. The Company will also reimburse the Distribution Agent for certain specified expenses in connection with entering into the Agreement. The Agreement contains customary representations and warranties and conditions to the sale of the Common Stock pursuant thereto.
Under the terms of the Agreement, in no event will the Company issue or sell through the Distribution Agent such number or dollar amount of Common Stock that would (i) exceed the number or dollar amount of Common Stock registered and available on the Registration Statement, (ii) exceed the number of authorized but unissued Common Stock, (iii) exceed the number or dollar amount of Common Stock permitted to be sold under Form S3 (including General Instruction I.B.6 thereof, if applicable), or (iv) exceed the number or dollar amount of Common Stock for which the Company has filed a prospectus supplement to the Registration Statement.
The Company is not obligated to make any sales of Common Stock under the Agreement. The offering of shares of Common Stock pursuant to the Agreement will terminate upon the earlier of (i) the sale of all Common Stock subject to the Agreement or (ii) termination of the Agreement in accordance with its terms.
The foregoing description of the Agreement is not complete and is qualified in its entirety by reference to the full text of the Agreement, a copy of which is filed herewith as Exhibit 1.1 to this Current Report on Form 8K and is incorporated herein by reference.
This Current Report on Form 8K shall not constitute an offer to sell or the solicitation of an offer to buy the securities discussed herein, nor shall there be any offer, solicitation, or sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
The opinion of Sichenzia Ross Ference LLP, the Company’s legal counsel, regarding the validity of the Shares is filed as Exhibit 5.1 hereto. This opinion is also filed with reference to, and is hereby incorporated by reference into, the Registration Statement.