Lexaria’s Licensee Premier Wellness Science Co., Ltd. Launches New Brand In Preparation To Deploy DehydraTECH CBD Products In Japan

Lexaria Bioscience Corp. (NASDAQ:LEXX)(NASDAQ:LEXXW) (the "Company" or "Lexaria"), a global innovator in drug delivery platforms is pleased to announce that its exclusive* Japanese Licensee, Premier Wellness Science Co., Ltd., ("Premier") officially launched its first generation of its new cannabidiol ("CBD") products under the brand "Ko", on July 21, 2022 for the Japanese consumer market.

Premier will create its own e-commerce infrastructure and digital marketing campaigns in collaboration with its parent company, Premier Anti-Aging Co., Ltd. ("Parent") which is listed on the Tokyo Stock Exchange (4934:JP).

For wholesale sales, Premier will work with a large third-party Japanese-based distribution company also listed on the Tokyo Stock Exchange to expand sales channels. Originally founded in 1898, it is a large distributor and logistics supplier for cosmetics, OTC pharmaceuticals and nutraceuticals to wholesalers, retailers and more; and, shipped more than 3.5 billion products in its most recent fiscal year, comprised of over 50,000 products and over 50,000 retail stores of distribution.

The "Ko" brand is focused on the endocannabinoid system and circadian rhythm to support the health and wellness of all people, highlighted by the concept of wellness for all and will contain CBD and other botanical extracts. Ko-branded products containing Lexaria's DehydraTECH™ delivery technology are expected to be introduced during Q2 2023, following rigorous product development and formula optimization.

Premier is working diligently to establish its new brand while also looking towards extensive distribution for the DehydraTECH-enabled products to be developed and sold. Lexaria notes the extensive capabilities of Premier, Parent, and PALTAC – all expected to contribute to the eventual widespread introduction of DehydraTECH-CBD products within the Japanese marketplace.

Under the terms of the license agreement with Lexaria as previously announced on June 3, 2022, Premier purchased the rights to DehydraTECH technology for the Japanese non-pharmaceutical market for use with CBD and hemp ingredients in oral liquid and non-liquid products, as well as for topical, hair-care, lip-care and cosmetics products.

In order to retain ongoing exclusivity, the negotiated minimum quarterly payments ("Payments") to Lexaria begin September 1, 2022 and, during the first five years of the Agreement, amount to US$4,527,500. Additional payments beyond five years are required to keep the license in good standing, in which case the license for the Japanese market is perpetual.

In addition to the Payments, Lexaria will also receive royalty revenue from DehydraTECH licensed product sales, which are anticipated to be significantly greater than the minimum Payments if Premier is capable of meeting its expected revenue targets. If Premier achieves even their worst-case projected penetration into the Japanese non-pharmaceutical CBD market, then based on their projections Lexaria could expect to receive annual payments of over $5 million by the fifth year of the contract.

*The exclusive rights are subject to two previously issued licenses for use of DehydraTECH in Japan, which remain valid. Lexaria will not be issuing any further licenses in Japan for non-pharmaceutical cannabinoid products.