Lexaria Bioscience Corp. Investor Presentation October 2016 - PowerPoint PPT Presentation

Lexaria Bioscience Corp. Investor Presentation October 2016 CSE:LXX; OCTQB:LXRP www.lexariaenergy.com 1

Disclaimer This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements which are not historical facts are forward-looking statements. The Company makes forward-looking public statements concerning its expected future financial position, results of operations, cash flows, financing plans, business strategy, products and services, evaluation of medical marijuana projects, alternative health projects or products, and cannabidiol-fortified products or services for participation and/or financing, competitive positions, growth opportunities, plans and objectives of management for future operations, including statements that include words such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may," "could," "should," "will," and other similar expressions that are forward-looking statements. 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 other factors will not affect the accuracy of such forward-looking statements including, without limitation, foreign exchange and other financial markets; changes of the interest rates on borrowings; whether or not the Company will be successful in executing its business plan in whole or in part; hedging activities; changes in commodity prices; changes in the marketing or capital project expenditure levels; litigation; legislation; environmental, judicial, regulatory, political and competitive developments in areas in which Lexaria Corp. operates. These and other risks and uncertainties are more fully described in our periodic reports and other disclosure documents filed by Lexaria Corp. from time to time with regulatory authorities available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov, and the reader is encouraged to review these documents. Planned dates stated herein are estimates only, based on best information available. Dates are not assured and are subject to revision without notice. The Company assumes no obligation, except as required by law, to update any forward-looking statement, whether as a result of new information, future events or otherwise. This presentation is not an offer to sell or a solicitation of an offer to buy securities of Lexaria Bioscience Corp. It is a short summary of certain information for introductory purposes only and is not to be relied upon for investment purposes. No statement within has been evaluated by the Food and Drug Administration, and no product or service is intended to diagnose, treat, cure or prevent any disease. 2 >>> Advanced Delivery for Bioactive Consumer Goods >>>

Lexaria Bioscience Corp. • Lexaria is a bioscience technology disruptor for edible cannabinoids, – Masks taste, improving consumer satisfaction, – Faster acting, enhancing outcome, – Increased potency, lower overall dosing. • THC effects are felt within 15-20 min of consumption, – Compared to industry norm of 60-120 min. • CBD absorption within 15 min, – Evidenced by nitric oxide surrogate biomarker test. • Lab tested - 5X higher absorption and faster effectiveness. • Cannabinoid edibles - a high growth segment within a high growth market. • Customers demands: – Healthy alternatives to smoking, especially for medical use, – Better tasting, faster acting and more potent edible cannabinoid products. • Patent-allowed and patent-pending technology covers many molecules: – Cannabinoids (e.g., CBD and THC), Nicotine, vitamins, NSAIDs - Non-steroidal anti-inflammatory drugs, (such as ibuprofen), • Out-license (royalty) model & sales of Lexaria products. 3 >>> Advanced Delivery for Bioactive Consumer Goods >>>

Growth of Cannabis Edibles • Cannabis: a high growth industry – now $7B, – On Nov 8th – 9 States vote on legalization, – If passed, California’s legal cannabis market to grow from $2.7B to $6.6B by 2020. (Arcview) • Edibles – high growth within the Cannabis industry, – Healthier alternative to smoking, – Medical patients show a preference to edibles, – 53% YOY growth in edibles. (Marijuana Business Daily) • Consumers and patients are seeking inconspicuous and healthier consumption methods. • THC/CBD is absorbed differently in edibles, – Normally takes 30 – 120 min to feel effects, – More difficult to dose. • Lexaria’s disruptive technology improves experience of edibles, – Higher bioavailability (5X increase), – Faster acting (within 15-20 min), – Masks taste. 4 >>> Advanced Delivery for Bioactive Consumer Goods >>>

Transforming entry into the body Many active Lexaria’s Technology compounds are: Enables: Bad tasting upon Flavor masking for oral intake poor tasting LOW Bioavailability HIGH Bioavailability compounds Largely destroyed by Protection during stomach acid stomach transit 5-10X amplified Unable to significantly intestinal absorption! cross intestinal wall Ability to bypass first pass liver Broken down by metabolism when the liver desired 5 >>> Advanced Delivery for Bioactive Consumer Goods >>>

How Does The Technology Work? Results: Process: 1) Taste is masked 1) Mix substance Fatty Acid Oil Fatty Acid Oil (eg. Sunflower oil as masks conjugated Active a long chain fatty acid oil) active substance Substance (eg. THC, flavoring CBD) Molecular bond formed 2) Protection against stomach 2) Mix with food/carrier acids and enhanced intestinal Food/carrier absorption particles are Intestines preferentially infused with absorb long chain fatty conjugate acids lymphatically (bypassing liver) and medium chains via the liver 6 >>> Advanced Delivery for Bioactive Consumer Goods >>>

Lab Tests / Human Focus Studies • In vitro Absorption Study – August 2015, 3rd party lab, – 499% increase in CBD bio absorption in human intestinal tissues. • Human Biomarker Study – January 2016, human subjects, – 5-10 X increase in salivary nitric oxide within 15-30 min, – Surrogate indication of proportionate CBD absorption. • Human Focus Study – March 2016, – 15-20 minutes for onset of THC effects in human volunteers, – Test subjects ranked Lexaria formulation as best tasting, most palatable and delivering the best overall THC experience. 7 >>> Advanced Delivery for Bioactive Consumer Goods >>>

Patents - Allowed and Pending • 8 patent applications filed; US and international, under the Patent Cooperation Treaty (PCT), – Patents include both method and composition of matter claims. • The patents name a broad range of bioactive substances that can be formulated and delivered using Lexaria’s technology, – Ability to formulate across many consumer product dosage forms (see table). • USPTO “Notice of Allowance” received July 2016, – “Food and Beverage Compositions Infused with Lipophilic Active Agents and Method of Use Thereof”, – Method claims for combining a lipophilic active agent together with a bioavailability and taste enhancing oil by dehydration or lyophilization, and doing so in contact with a food product substrate material, • Final patent issuance expected shortly. 8 >>> Advanced Delivery for Bioactive Consumer Goods >>>

Business Model: 1)Royalties • Out-licensing technology (royalty) to third-party partners in royalty model. • Deals announced to date: – CBDM LLC., for 5 THC products, • LOI signed Aug 2016. • Access to PA, MA, NV, AZ & Indian Lands. – Undisclosed, for 3 THC products, • Agreement signed May 2016. • Access to CO, WA, CA, OR. – Undisclosed, for THC products, • California based - well-known brand, • LOI signed Aug 2016. – Timeless Herbal Care Ltd., multiple CBD products • Agreement signed Sept 2016. • Access to USA, Canada, Jamaica. • High Margin royalty (5-10% of gross sales). 9 >>> Advanced Delivery for Bioactive Consumer Goods >>>

Business Model: 2)Product sales • Lexaria’s distinguishing hemp oil CBD product benefits: – HIGH ABSORPTION + GREAT TASTING Hemp Oil Formula – Excellent source of Omegas and Essential Fatty Acids – Engineered for physiological performance & recovery • Reduces anxiety/stress and promotes focus • Offsets pain and inflammation • Supports circulation (nitric oxide booster / vasodilator). • Protein Energy Bars – Sports nutrition focus – Excellent for energy, fiber and protein – Two flavours • Exotic Teas – Our ViPova ™ brand premium teas – Anti-oxidant – Seven flavors • TurboCBD ™ COMING SOON! – New Category Entry – Special formulation with Hemp oil, and complementary herbal ingredients 10 >>> Advanced Delivery for Bioactive Consumer Goods >>>

Business Model: 3)White Label • White label of Lexaria’s product offerings (CBD/Herbal products). • Deals announced to date: – Timeless Herbal Care Limited, • Signed August, 2016, • Private label distribution deal for Lexaria’s product offerings USA, Canada and Jamaica. • Lexaria will receive royalties on all gross product sales. 11 >>> Advanced Delivery for Bioactive Consumer Goods >>>