UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________

FORM 10-Q

_______________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~February~~May 2931, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______.

Commission File Number: 000-52403

___________________________________________________

CNBX PHARMACEUTICALS INC.

(Exact name of registrant as specified in its charter)

___________________________________________________

Nevada		46-5644005
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

#3 Bethesda Metro Center, Suite 700 Bethesda, MD		20814
(Address of principal executive offices)		(Zip Code)

(877) 424-2429

(Registrant’s telephone number, including area code)

~~Securities registered under Section 12(b) of the Act:~~____________________________________________________

~~Title~~(Former ofname, ~~each~~former ~~class~~address ~~Name~~and offormer ~~each~~fiscal year, ~~exchange~~if onchanged ~~which~~since ~~registered~~last ~~N/A N/A~~report)

Securities registered under Section 12(g) of the Act:

Common Stock, $.0001 Par Value

(Title of class)

_____________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company," and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~April~~July 1214, 2024, the registrant had 31,111,352 shares of its Common Stock, $0.0001 par value, outstanding.

When used in this quarterly report, the terms “CNBX,” “the Company,” “we,” “our,” and “us” refer to CNBX Pharmaceuticals Inc. and its wholly- owned ~~subsidiary~~subsidiaries, G.R.I.N Ultra Ltd., and Digestix Bioscience Inc.

CNBX PHARMACEUTICALS INC.

FORM 10-Q

~~FEBRUARY~~MAY 2931ST, 2024

INDEX

Cautionary Note Regarding Forward-Looking Statements		3
PART I – FINANCIAL INFORMATION		4
Item 1.	Consolidated Financial Statements	4
	Consolidated Balance Sheets as of February 29, 2024 (unaudited) and August 31, 2023	4
	Consolidated Balance Sheets as of May 31st, 2024 (unaudited) and August 31, 2023	4
	Consolidated Statements of Operations for the Three and Six Months Ended February 29, 2024 and February 28, 2023 (unaudited)	5
	Consolidated Statements of Operations for the Three and Nine Months Ended May 31st, 2024 and 2023 (unaudited)	5
	Consolidated Statements of Stockholder’s Equity for the Three and Six Months Ended February 29, 2024 and February 29, 2023 (unaudited)	6
	Consolidated Statements of Stockholders’ Equity (Deficit) for the Three and Nine Months Ended May 31st, 2024 and 2023 and the Year Ended August 31, 2023	6
	Consolidated Statements of Cash Flows for the Six Months Ended February 29, 2024 and February 28, 2023 (unaudited)	8
	Consolidated Statements of Cash Flows for the Nine Months Ended May 31st, 2024 and 2023 (unaudited)	8
	Notes to Consolidated Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3417
Item 4.	Controls and Procedures	3417
PART II – OTHER INFORMATION		36
PART II -- OTHER INFORMATION		18
Item 1.	Legal ~~Proceeding~~Proceedings	3618
Item 1A.	Risk Factors	3618
Item 2.	Recent Sale of Unregistered Securities	3618
Item 5.	Other Information	3618
Item 6.	Exhibits	3618
SIGNATURES		3719

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information set forth in this Quarterly Report on Form 10-Q, including in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere herein may address or relate to future events and expectations and as such constitutes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements which are not historical reflect our current expectations and projections about our future results, performance, liquidity, financial condition, prospects and opportunities and are based upon information currently available to us and our management and their interpretation of what is believed to be significant factors affecting our business, including many assumptions regarding future events. Such forward-looking statements include statements regarding, among other things:

	·	the size and growth of the potential markets for our products and the ability to serve those markets;

	·	our expectations regarding our expenses and revenue, the sufficiency of our cash resources and needs for additional financing;

	·	the rate and degree of market acceptance of any of our products;

	·	our expectations regarding competition;

	·	our anticipated growth strategies;

	·	our ability to attract or retain key personnel;

	·	our ability to establish and maintain development partnerships;

	·	regulatory developments in the U.S. and foreign countries, especially those related to change in, and enforcement of, cannabis laws;

	·	our ability to obtain and maintain intellectual property protection for our products; and

	·	the anticipated trends and challenges in our business and the market in which we operate.

Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “should,” “would,” “could,” “scheduled,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “seek,” or “project” or the negative of these words or other variations on these words or comparable terminology. Actual results, performance, liquidity, financial condition and results of operations, prospects and opportunities could differ materially and perhaps substantially from those expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors. These statements may be found under the section of our Annual Report on Form 10-K for the year ended August 31, ~~2023 (filed on November 29th~~2022, ~~2023)~~ entitled “Risk Factors” as well as in our other public filings.

In light of these risks and uncertainties, and especially given the start-up nature of our business, there can be no assurance that the forward-looking statements contained herein will in fact occur. Readers should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

PART I –- FINANCIAL INFORMATION

Item 1. Financial Statements

CNBX PHARMACEUTICALS INC.

Consolidated Balance Sheets

	February 29,			August 31,
	May 31,			August 31,
	2024			2023
	Unaudited			Audited
ASSETS
Current assets:
Cash and cash equivalents	$	3773,~~142~~406		$	129,696
Prepaid expenses and other receivables		~~126~~6,~~775~~621			94,612
Total current assets		~~163~~80,~~917~~027			224,308
Equipment, net		–			274,731
Total assets	$	~~163~~80,~~917~~027		$	499,039
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	~~231~~189,~~379~~820		$	335,915
Convertible loan		1,~~292~~293,~~588~~847			1,343,584
Due to a related party		~~998~~1,~~484~~050,731			836,829
Total current liabilities		2,~~522~~534,~~451~~398			2,516,328
Stockholders' equity (deficit):
Preferred stock, $.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding		–			–
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding		–			–
Common stock, $.0001 par value, 900,000,000 shares authorized, 3,111,352 and 22,611,352 shares issued and outstanding at February 29, 2024 and August 31, 2023 respectively		3,111			2,261
Common stock, $0.0001 par value, 900,000,000 shares authorized, 3,111,352 and 22,611,352 shares issued and outstanding at May 31, 2024 and August 31, 2023 respectively		3,111			2,261
Additional paid-in capital		22,~~401~~436,~~539~~334			22,239,652
Accumulated deficit		(24,~~763~~893,~~184~~816	)		(24,259,202	)
Total stockholders' equity (deficit)		(2,~~358~~454,~~534~~371	)		(2,017,289	)
Total liabilities and stockholders' equity	$	~~163~~80,~~917~~027		$	499,039

See accompanying notes to consolidated financial statements.

* On May 12, 2023, the Company effected a reverse-split of its common stock on a 1:120 basis.

CNBX PHARMACEUTICALS INC.

Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

	For the Three Months Ended						For the ~~Six~~Nine Months Ended
	February 29,			February 28,			February 29,			February 28,
	May 31,			May 31,			May 31,			May 31,
	2024			2023			2024			2023
Revenues
	Unaudited
Services	$	40,637		$	–		$	130,074		$	–
Revenues	$	–		$	310,165		$	130,074		$	310,165
Cost of services		6,220			–			17,570			–
Gross Profit		34,417			–			112,504			–
Operating expenses:
Research and development expense	$	~~107~~42,~~199~~884		$	12263,~~328~~115		$	~~208~~268,~~267~~722		$	75338,~~215~~330
General and administrative expenses		~~133~~109,~~646~~394			~~237~~220,~~683~~132			~~282~~391,~~565~~958			~~521~~741,~~585~~716
Total operating expenses		~~240~~152,~~845~~278			~~250~~483,~~010~~247			~~490~~660,~~832~~680			~~596~~1,~~800~~080,046
Loss from operations		(~~206~~152,~~428~~278	)		(~~250~~173,~~010~~082	)		(~~378~~530,~~328~~606	)		(~~596~~769,~~800~~881	)
Other income (loss)
Other income
Capital loss		(123,711	)		(2,395,298	)		(123,711	)		(2,395,298	)
Capital Gain (loss)		–			–			(88,934	)		(2,395,298	)
Financial income (Loss), net		4,680			20,987			(1,943	)		10,108
Financial Income (loss)		21,646			18,392			(15,074	)		28,499
Net (loss)		(325,459	)		(2,624,321	)		(503,982	)		(2,981,990	)
Net loss		(130,632	)		(154,690	)		(634,614	)		(3,136,680	)
Profit (loss) from available for sale assets		–			–			–			(59,870	)
Total comprehensive income (loss)	$	(325,459	)	$	(2,624,321	)	$	(503,982	)	$	(3,041,860	)
Total comprehensive (income) loss	$	(130,632	)	$	(154,690	)	$	(634,614	)	$	(3,196,550	)
Net loss per share - basic and diluted:	$	(0.0100	)	$	(10.3302	)	$	(0.02	)	$	(10.4278	)
Weighted average number of shares outstanding - Basic and Diluted		3031,~~988~~111,~~275~~352			19,~~962~~265,~~999~~865			29,~~374~~964,~~538~~272			24,~~086~~030,~~873~~048

See accompanying notes to consolidated financial statements.

CNBX PHARMACEUTICALS INC.

Consolidated Statements of ~~Stockholder’s~~ Stockholders' Equity (Deficit)

(Unaudited)


	Common stock				Additional paid in				Unrealized gain (loss) on available-for sale financial		Accumulated			Total stockholders’ equity
	Shares		Amount		capital		Warrants		gain		deficit			(deficit)
Balance, August 31, 2023		22,611,352	$	2,261	$	22,239,652	$	–	$	–	$	(24,259,202	)	$	(2,017,289	)

Share based payment		–		–		104,745		–		–		–			104,745

Exercise of a Convertible loan to shares of common stock.		8,500,000		850		91,937		–		–		–			92,787

Net loss		–		–		–		–		–		(634,614	)		(634,614	)

Balance, May 31, 2024		31,111,352	$	3,111	$	22,436,334	$	–	$	–	$	(24,893,816	)	$	(2,454,371	)

For the six months ended February 29, 2024

	Common stock				Additional paid in				Unrealized gain (loss) on available-for sale financial		Accumulated			Total stockholders’ equity
	Shares		Amount		capital		Warrants		gain		deficit			(deficit)
Balance, February 28, 2024		31,111,352	$	3,111	$	22,401,539	$	–	$	–	$	(24,763,184	)	$	(2,358,534	)

Share based payment		–		–		34,795		–		–		–			34,795

Net Loss		–		–		–		–		–		(130,632	)		(130,632	)

Balance, May 31, 2024		31,111,352	$	3,111	$	22,436,334	$	–	$	–	$	(24,893,816	)	$	(2,454,371	)

	Common Stock				Additional Paid In				Other Comprehensive		Accumulated			Total Stockholders’ Equity
	Shares		Amount		Capital		Warrants		Gain		Deficit			(Deficit)
Balance, August 31, 2023		22,611,352	$	2,261	$	22,239,652	$	–	$	–	$	(24,259,202	)	$	(2,017,289	)
Share based payment		–		–		69,950		–		–		–			69,950
Exercise of a Convertible loan to shares of common stock.		8,500,000		850		91,937		–		–		–			92,787
Net loss		–		–		–		–		–		(503,982	)		(503,982	)
Balance, February 29, 2024		31,111,352	$	3,111	$	22,401,539	$	–	$	–	$	(24,763,184	)	$	(2,358,534	)

For the three months ended February 29, 2024

	Common Stock				Additional Paid In				Other Comprehensive		Accumulated			Total Stockholders’ Equity
	Shares		Amount		Capital		Warrants		Gain		Deficit			(Deficit)
Balance, November 30, 2023		28,311,352	$	2,831	$	22,339,965	$	–	$	–	$	(24,437,725	)	$	(2,094,929	)
Share based payment		–		–		34,975		–		–		–			34,975
Exercise of a Convertible loan to shares of common stock.		2,800,000		280		26,599		–		–		–			26,879
Net loss		–		–		–		–		–		(325,459	)		(325,459	)
Balance, February 29, 2024		31,111,352	$	3,111	$	22,401,539	$	–	$	–	$	(24,763,184	)	$	(2,358,534	)

See accompanying notes to consolidated financial statements.

CNBX PHARMACEUTICALS INC.

Consolidated Statements of ~~Stockholder’s~~ Stockholders' Equity (Deficit)

(~~Unaudited~~continued)

For the six months ended February 28, 2023


	Common stock				Additional paid in				Unrealized gain (loss) on available-for sale financial			Accumulated			Total stockholders’ equity
	Shares		Amount		capital		Warrants		gain			deficit			(deficit)
Balance, August 31, 2022		1,238,659	$	124	$	18,031,869	$	3,459,510	$	(2,574,846	)	$	(20,548,968	)	$	(1,632,311	)

Exercise of CLA to shares		14,795,073		1,479		468,652		–		–			–			470,131

Share based payment		–		–		145,505		–		–			–			145,505

Realization of available for sale asset		–		–		–		–		2,243,913			–			2,243,913

Net loss		–		–		–		–		–			(3,136,680	)		(3,136,680	)

Balance, May 31, 2023		16,033,732	$	1,603	$	18,646,026	$	3,459,510	$	(330,933	)	$	(23,685,648	)	$	(1,909,442	)

	Common Stock				Additional Paid In				Other Comprehensive			Accumulated			Total Stockholders’ Equity
	Common stock				Additional paid in				Unrealized gain (loss) on available-for sale financial			Accumulated			Total stockholders’ equity
	Shares		Amount		~~Capital~~capital		Warrants		~~Gain~~gain			~~Deficit~~deficit			(~~Deficit~~deficit)
Balance, August 31, 2022		1,238,659	$	124	$	18,031,869	$	3,459,510	$	(2,574,846	)	$	(20,548,968	)	$	(1,632,311	)
Balance, February 28, 2023		2,190,138	$	222	$	18,390,628	$	3,459,510	$	(330,933	)	$	(23,530,958	)	$	(2,011,531	)
Share based payment		–		–		~~110~~34,~~530~~975		–		–			–			~~110~~34,~~530~~975
Exercise of CLA to shares		~~951~~13,~~479~~843,594		981,381		~~248~~220,~~230~~423		–		–			–			~~248~~221,~~326~~804
Other comprehensive loss		–		–		–		–		2,243,913			–			2,243,913
Net Loss		–		–		–		–		–			(154,690	)		(154,690	)
Net loss		–		–		–		–		–			(2,981,990	)		(2,981,990	)
Balance, May 31, 2023		16,033,732	$	1,603	$	18,646,026	$	3,459,510	$	(330,933	)	$	(23,685,648	)	$	(1,909,442	)
Balance, February 28, 2023		2,190,138	$	222	$	18,390,628	$	3,459,510	$	(330,933	)	$	(23,530,958	)	$	(2,011,532	)

For the three months ended February 28, 2023

	Common Stock				Additional Paid In				Other Comprehensive			Accumulated			Total Stockholders’ Equity
	Shares		Amount		Capital		Warrants		Gain			Deficit			(Deficit)
Balance, November 30, 2022		1,238,659	$	124	$	18,107,426	$	3,459,510	$	(2,634,716	)	$	(20,906,637	)	$	(1,974,293	)
Share based payment		–		–		34,973		–		–			–			34,973
Exercise of CLA to shares		951,479		98		248,229		–		–			–			248,327
Other comprehensive loss		–		–		–		–		2,303,783			–			2,303,783
Net loss		–		–		–		–		–			(2,624,321	)		(2,624,321	)
Balance, February 28, 2023		2,190,138	$	222	$	18,390,628	$	3,459,510	$	(330,933	)	$	(23,530,958	)	$	(2,011,532	)

See accompanying notes to consolidated financial statements.

CNBX PHARMACEUTICALS INC.

Consolidated Statements of Cash Flows

(Unaudited)

	For the Six month Ended
	For the Nine Months Ended,
	February 29,			February 28,
	May 31,			May 31,
	2024			2023
Cash flows from operating activities:
Net (Loss)	$	(503,982	)	$	(2,981,990	)
Net Loss	$	(634,614	)	$	(3,136,680	)
Adjustments required to reconcile net loss to net cash used in operating activities:
Depreciation		72,320			83123,~~575~~569
Interest on convertible loans		16,798			9,034
Interest on loans		16,798			–
Capital loss		123,711			2,395,298
Capital Loss		88,934			2,395,298
Convertible loan valuation		–			9,033
Share based payment		104,745			145,505
Changes in operating assets and liabilities:
Share based payment		69,950			110,530
Accounts Receivable and pre paid expenses		87,991			(223,873	)
Accounts Receivable and prepaid expenses		(32,163	)		19,685
Accounts payable and accrued liabilities		67,807			554,110
Accounts payable and accrued liabilities		57,122			249,421
Net cash used in operating activities		(196,019	)		(133,038	)
Net cash used in operating activities		(196,244	)		(114,447	)
Cash flows from investing activities:
Realization of Available for sale investment		–			24,702
Proceeds from sale of available for sale investments		–			24,702
Sale of equipment		114,673			–
Acquisition of equipment		(1,196	)		–
Realization of equipment		20,000			–
Net cash gain in investing activities		113,477			24,702
Net cash from (used) in investing activities		18,804			24,702
Cash flows from financing activities:
Proceeds from convertible loan agreement		24,993			19,978
Convertible loan		26,252			34,972
Net cash provided by financing activities		24,993			19,978
Proceeds from sale of common stock		–			–
Effect of exchange rate changes on cash, cash equivalents		59,893			–
Costs of raising capital		–			–
Net increase (Decrease) in cash		(92,554	)		(69,767	)
Net cash provided by financing activities		26,252			34,972
Effect of exchange rate fluctuations on cash		–			–
Net decrease in cash		(56,290	)		(73,364	)
Cash and cash equivalents at beginning of the Period		129,696			117,515
Cash and cash equivalents at end of the Period	$	3773,~~142~~406		$	4744,~~748~~151
Significant non-cash transactions:
Exercise of a Convertible loan to shares of common stock.	$	92,787		$	470,131

See accompanying notes to consolidated financial statements.

CNBX PHARMACEUTICALS INC.

Notes to Consolidated Financial Statements

(Unaudited)

Note 1 – Nature of Business, Presentation and Going Concern

Organization

CNBX Pharmaceuticals Inc. (the “Company”), was incorporated in the State of Nevada, on September 15, 2004, under the name of Thrust Energy Corp.

On September 30, 2010, we increased our authorized capital to 900 million shares of common stock (par value $0.0001) and 100 million shares of preferred stock (par value $0.0001) and effected a 20-for-1 reverse split of our issued and outstanding common stock. As a result of the reverse split, our issued and outstanding common stock was reduced from 13,604,000 shares to 680,202 common shares, 100,000,000 preferred shares were unaffected.

On April 25, 2014, the Company experienced a change in control. Cannabics, Inc. (“Cannabics”) acquired a majority of the issued and outstanding common stock of the Company in accordance with stock purchase agreements. On the closing date, April 25, 2014, pursuant to the terms of the Stock Purchase Agreement, ~~Cannabics~~CNBX Pharmaceuticals Inc. purchased 41,000,000 shares of the Company’s outstanding restricted common stock for $198,000, representing 51%.

On May 21, 2014, the Company changed its name, via merger in the state of Nevada, to CNBX Pharmaceuticals Inc. The Company’s principal offices are in Bethesda, Maryland. The Company changed its course of business to laboratory research and development.

On June 19, 2014, FINRA granted final approval of Change of Name & Ticker Symbol of the Corporation from American Mining Corporation to CNBX PHARMACEUTICALS INC., with the new Ticker Symbol of “CNBX”. Said approval was predicated upon CNBX Pharmaceuticals Inc.’s filing of Articles of Merger with American Mining Corporation with the Nevada Secretary of State on May 21st, 2014. Under the laws of the State of Nevada, CNBX Pharmaceuticals Inc. was merged with and into the Registrant, with the Registrant being the surviving entity. The Merger was completed under Section 92A.180 of the Nevada Revised Statutes, Chapter 92A, as amended, and as such, does not require the approval of the stockholders of either the Registrant or CNBX Pharmaceuticals Inc.

On August 25, 2014, the Company organized G.R.I.N. Ultra Ltd. (“GRIN”), an Israeli corporation, as a wholly-owned subsidiary. GRIN will provide research and development activities for the Company’s products in Israel.

On July 24, 2017, the Company announced its establishment of a genetics laboratory to develop diagnostic tools based on human genome, tumor genetics and specific cannabinoids.

On August ~~20th~~20, 2020, the Company announced ~~the~~ the creation of a new Division for its Anti-Tumor drug candidate RCC-33, for the treatment of colorectal cancer. The emanates from the Company’s focus on a clinical validation path, including in-vivo experiments, collaborations with key medical centers, and the preparation of a product dossier with which the company plans to schedule a Pre IND-Meeting with the US FDA.

On October ~~18th~~18, 2021, the Company filed 2 new Provisional Patent applications on Compositions and Methods for treating cancer, including colorectal cancer and early intervention ~~therapy~~ therapy for colorectal cancer patients.

On February 13, 2022, the company established a Nomination and Governance Committee.

On May 10, 2022, the Company filed a certificate of change (the “Certificate”) with the Secretary of State of the State of Nevada. Pursuant to the Certificate, the Company effectuated a one-for-one hundred twenty (1:120) reverse split of the issued and outstanding shares of common stock of the Company without changing the par value of the stock.

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial statement presentation and in accordance with Form 10-Q. Accordingly, they do not include all of the information and footnotes required in annual financial statements. In the opinion of management, the unaudited financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position and results of operations and cash flows. The results of operations presented are not necessarily indicative of the results to be expected for any other interim period or for the entire year.

These unaudited financial statements should be read in conjunction with our August 31, 2023 annual financial statements included in our Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on November ~~30th~~30, 2023.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries GRIN Ultra and Digestix Bioscience Inc. All significant inter-company balances and transactions have been eliminated in consolidation.

Going Concern

The accompanying unaudited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. While the Company has incurred a net loss of $~~503~~634,~~982~~614 for the ~~six~~nine months ended ~~February~~May 2931, 2024, it has incurred ~~cumulative~~ cumulative losses since inception of $24,~~763~~893,~~184~~816. These conditions raise substantial doubt about the ability of the Company to continue as a going concern.

The ability of the Company to continue as a going concern is dependent upon its abilities to generate revenues, to continue to raise investment capital, and develop and implement its business plan. No assurance can be given that the Company will be successful in these efforts.

Research and Development Costs

The Company accounts for research and development costs in accordance with Accounting Standards Codification 730 “Research and Development” (“ASC 730”). ASC 730 requires that research and development costs be charged to expense when incurred. Research and development costs charged to expense were $~~208~~268,~~267~~722 and $75338,~~215~~330 for the ~~six~~nine months ended ~~February~~May 2931, 2024 and ~~February 28~~ 2023, respectively.

Reclassifications

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported losses, total assets, or stockholders’ equity as previously reported.

Note 2 – Related Party Transactions

As of February 29, 2024, the Company had 2 employees our Directors Gabriel Yariv and Eyal Barad. Aside from counsel, all employees reside in Israel.

During the six months ending February 29, 2024, the Company paid $50,979 in salaries expenses, including socials benefits, to two directors, compared to $6,950 for the for the six months ending February 28, 2023.

In addition, during the six months ending February 29, 2024, the Company accrued $161,655 in salaries, including socials benefits, to two directors, compared to accrued expenses of $227,894 for the six months ending February 28, 2023.

~~During~~Note ~~the~~2 ~~six~~– ~~months~~Related ~~ending~~Party ~~February 29, 2024, the Company recorded a non-cash expense of $69,950 in share-based payment, to the company chairman compared to $110,530 for the six months ending February 28, 2023.~~Transactions

AsDuring ofthe ~~February~~nine 29months ending May 31, 2024, the Company ~~had~~paid ~~a balance~~$73,732 ~~outstanding~~in ~~payable~~salaries, toincluding ~~two~~socials ~~directors:~~benefits, ~~Gabriel~~to ~~Yariv~~two ~~and Eyal Barad in the total of $774~~directors,~~839~~ compared to $~~424~~7,~~580~~000 for the ~~six~~nine months ending ~~February~~May 2831, 2023.

~~The~~During ~~Company~~the ~~had~~nine amonths ~~balance~~ending ~~outstanding~~May ~~on February 29~~31, 2024 the ~~and~~Company ataccrued ~~February~~$242,500 in 28salaries, ~~2023~~including ofsocials ~~$223~~benefits,~~645~~ ~~payable~~ to ~~Cannabics,~~two ~~Inc.~~directors ~~The~~compared ~~advance~~to is$334,658 ~~due~~for onthe ~~demand~~nine ~~and~~months ~~bears~~ending noMay ~~interest~~31, 2023.

As of May 31, 2024, the Company had a balance outstanding payable to two directors: Gabriel Yariv and Eyal Barad in the total of $824,389 under Accounts payable and accrued liabilities.

The Company had a balance outstanding at May 31, 2024 and at May 31, 2023 of $223,645, payable to Cannabics, Inc. The advance is due on demand and bears no interest.

During the nine months ending May 31, 2024, the Company recorded a non-cash expense of $104,745 in share-based payment, to the company chairman, board members and advisor.

Note 3 – Stockholders’ Equity (Deficit)

Authorized Shares

The Company is authorized to issue up to 900,000,000 shares of common stock, par value $0.0001 per share. There is also 5,000,000 shares of Preferred stock, none of which has been issued. Each outstanding share of common stock entitles the holder to one vote per share on all matters submitted to a stockholder vote. All shares of common stock are non-assessable and non-cumulative, with no pre-emptive rights.

For the period ~~of the six months~~ ending ~~on February~~at 29May 31, 2024, the company issued 8,500,000 shares as a result of a convertible of a loan at a total of $92,787.

Note 4 – Realization of fixed assets

On February 15, 2024, the Company realized ~~all~~ all of its fixed assets in consideration of $~~113~~114,~~972.~~673 ~~To the report date, $20,000 was received~~ and ~~the rest was received during March 2024. The company~~ recorded a capital loss of $~~123~~88,~~711~~934.

Note 5 – Private Placement of Notes and Warrant

On December 16, 2020, we entered into a Securities Purchase Agreement (“SPA”) with an institutional investor for a private placement of senior secured convertible notes totaling up to an aggregate of $2,750,000 to be issued in three tranches subject to the achievement of certain milestones. The convertible notes include a conversion right, at the Investor’s option, to convert the convertible notes into shares of our Common Stock at a conversion price equal to the lower of (i) $42 per share or (ii) eighty percent (80%) of the average of the two lowest daily volume-weighted average price for the Company’s Common Stock during the ten (10) consecutive trading days preceding the conversion date (the “notes”). The investor has the right to have the conversion price reduced if we issue Common Stock or convertible notes at a lower conversion price than $42 during the period that the notes are outstanding. The notes are due one year from issuance. The notes will be interest free, but in the event of a default, they will bear annual interest at a rate of 18.00%. The SPA and the notes contain events of default, including, among other things, failure to repay the notes by the maturity date, and bankruptcy and insolvency events, that would result in the imposition of the default interest rate.

On December 21, 2020, we closed the first tranche and issued a note in the amount of $825,000 (the “Initial Note”). On February 22, 2021, we closed the second tranche and issued a second note in the amount of $550,000 (the “Second Note”). On April 23, 2021, we closed the third tranche and issued a third note in the amount of $1,375,000 (the “Note”). The Initial Note was issued at a discount of $75,000; the Second Note was issued at a discount of $50,000; and the Note was issued at a discount of $125,000. In addition, we issued to the Investor 32,614 shares of Common Stock as pre-delivery shares in accordance with the terms of the SPA, which shares will be deducted from the total number of shares to be issued to the Investor upon conversion of the Initial Note.

On April 23, 2021, we entered into a senior secured promissory note (the “Senior Secured Note”) for $1,375,000 with the institutional investor. This follows the SPA, a restated securities purchase agreement dated as of February 22, 2021, as well as accompanying documents for an aggregate principal amount of $2,750,000 having an aggregate original issue discount of 10%, and ranking senior to all outstanding and future indebtedness of the Company. In addition, the SPA granted the investor a right to receive 100% warrant coverage, and we issued a warrant to the investor for up to 45,833 shares of our Common Stock, which expires three years from the issuance date of the warrant, with an exercise price of $60 per share. The warrant may be exercised and converted to Common Stock at the investor’s option at any time until the expiration date. These securities were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act, and Regulation D promulgated thereunder, as these securities were sold to “accredited investors” within the meaning of Regulation D. During 2021, The Senior Secured was converted into 9,300,000 shares. The said warrants expired on August 24, 2023.

On February 15, 2022, we entered into a forbearance agreements with the institutional investor relating to that certain Senior Secured Note. Pursuant to the forbearance agreement, the investor, through March 7, 2022, agreed to forbear from exercising any rights and remedies against the Company related to the outstanding payments and to waive certain other defaults under the Senior Secured Note and related rights pursuant to the registration rights agreement entered into in December 2020 between the Company and the investor.

On November 28, 2022, we entered into a forbearance agreements with the institutional investor relating to that certain Senior Secured Note. Pursuant to the forbearance agreement, the investor, through December 12, 2022, agreed to forbear from exercising any rights and remedies against the Company related to the outstanding payments and to waive certain other defaults under the Senior Secured Note and related rights pursuant to the registration rights agreement entered into in December 2020 between the Company and the investor.

On March 16, 2022, we issued to the investor a demand promissory note (the “Demand Note”) in the principal amount of $280,000 (the “Principal”) with an original issue discount of $40,000. The Demand Note is payable on demand at any time after the earlier to occur of (i) May 16, 2022, and (ii) the public or private offering of any securities by the Company (the “Next Subsequent Placement”). Any amount of Principal due under the Demand Note which is not paid when due shall result in a late charge being incurred and payable by the Company in an amount equal to interest on such amount at the rate of fifteen percent (15%) per annum from the date such amount was due until the same is paid in full (the “Late Charges”). With the agreement, the Principal and accrued and unpaid Late Charges under the Demand Note and amounts owed under the Senior Secured Note may be applied to all, or any part, of the purchase price of securities to be issued upon the consummation of an offering of securities by the Company to the investor. So long as any amounts remain outstanding under the Demand Note or the Senior Secured Note, all cash proceeds received by the Company on or after issuance of the Demand Note from the Next Subsequent Placement or any other sales of any securities of the Company shall be used to (x) first, repay the Demand Note and (y) second, repay the Senior Secured Note.

We entered into a forbearance agreements with the institutional investor relating to that certain Senior Secured Note. Pursuant to the forbearance agreement, the investor, through January 31, 2023, agreed to forbear from exercising any rights and remedies against the Company related to the outstanding payments and to waive certain other defaults under the Senior Secured Note and related rights pursuant to the registration rights agreement.

On June 15, 2022, the Company entered into a Securities Purchase Agreement providing for the issuance of the Convertible Promissory Note in the principal amount of $154,250.00. ($154,000 net of issuance expenses). The Convertible Promissory Note carry interest of 9% and due on June 15th 2023. On May 2023 the loan was convertible into 7,481,233 shares.

In the period of January through March 2023, the Company entered into a Securities Purchase Agreement providing for the issuance of the Convertible Promissory Note in the principal amount of $35,000.00. ($35,000 net of issuance expenses). The Convertible Promissory Note carry interest of 5% and due on June 15th 2023.

On June 1215, ~~2023~~2022, the Company entered into a ~~Securities~~ Securities Purchase Agreement providing for the issuance of the Convertible Promissory Note in the principal amount of $65154,~~000~~250.00. ($~~165~~154,000 ~~net~~ net of issuance expenses). The Convertible Promissory Note carry interest of 59% and due on ~~August~~June ~~85th~~15, 2023. On May 2023 the loan was convertible into 7,481,233 shares.

OnIn ~~October~~the ~~13,~~period of January through March 2023, the Company entered into a Securities Purchase Agreement providing for the issuance of the Convertible Promissory Note in the principal amount of $2435,~~993~~ 000.00. ($2535,000 net of issuance expenses). The Convertible Promissory Note carry interest of 5% and due on ~~January~~June ~~1st~~15, ~~2024~~2023.

~~Interest~~On ~~expenses~~June ~~amounted~~12, ~~to $16~~2023,~~798~~ the Company entered into a Securities Purchase Agreement providing for the issuance of the Convertible Promissory Note in the principal amount of $65,000.00. ($165,000 net ~~six~~of ~~months~~issuance ~~ended~~expenses). ~~February~~The 29Convertible Promissory Note carry interest of 5% and due on August 1, ~~2024~~2023.

On October 13, 2023, the Company entered into a Securities Purchase Agreement providing for the issuance of the Convertible Promissory Note in the principal amount of $24,993 ($25,000 net of issuance expenses). The Convertible Promissory Note carry interest of 5% and due on January 1, 2024.

Interest expenses amounted to $18,058 for the nine months ended May 31, 2024.

Note 6 – Commitments and Contingencies

The company had a lease of laboratory in Rehovot, Israel, the monthly lease was $6,500 per month.

The lease was terminated at the end of February 2024.

Note 7 – Subsequent Events

~~During~~On ~~March~~June 1, 2024, the company ~~received~~issued ~~$93~~1,~~972~~000, 000 shares as a result of a ~~the~~convertible ~~Fixed~~of ~~assets~~a ~~realization~~loan onat ~~February~~the ~~15,~~total ~~2024~~of $11,491.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Company Overview

We are a pre-clinical-stage, platform technology biopharmaceutical company which has developed proprietary innovative medicines in areas of significant unmet medical needs in oncology, with a current focus on colorectal cancer ("CRC"). Our drug candidate under development for colon cancer is RCC-33, a first-in-class therapy being developed primarily in two settings: one to reduce tumor cell activity in colon cancer patients as a standalone in neoadjuvant treatment or "window of opportunity" at the time after colonoscopy, prior to cancer staging; and another for patients with refractory to therapy and adjuvant to surgery also at the time after colonoscopy. The Company hopes to start first in human Phase I/II clinical trials in 2024. Neoadjuvant treatment is the administration of a therapy before the surgical treatment to improve patient outcome, and our business strategy is to advance our programs through clinical studies including with partners, and to opportunistically add programs in areas of high unmet medical needs through acquisition, collaboration, or internal development.

CNBX Pharmaceuticals Inc. is a clinical stage pharmaceutical company primarily focused on the development of novel cannabinoid-based products and innovative technologies for the treatment of cancer.

The company is currently preparing to launch Phase I/II (a) clinical study in 2024, for the evaluation of its lead drug candidates Cannabics SR for the treatment of patients with advanced cancer and cancer anorexia cachexia syndrome (CACS) and RCC-33 for the treatment of colorectal cancer. The company’s activities are centered around the company’s biological laboratory facilities located in Rehovot Israel, where our scientific team leads the company’s research and development efforts.

Our company’s core activities consist of:

· Drug Discovery: development of novel molecular formulations and drug candidates; · Intellectual Property: filing of corresponding IP to protect our products; and · Regulatory Affairs: initiation of the regulatory pathway for each drug candidate in our development pipeline

Our current business model is to undertake an FDA regulatory pathway for each of the new drug candidates under IND (Investigational New Drug) classification and complete a successful Phase I/II(a) clinical study (toxicity and proof of concept in humans). In reaching this milestone, where an initial feasibility in humans was demonstrated, the company will have gained several commercial opportunities for capitalizing on each such product candidate, including entering into commercial agreements with larger pharma corporations. Accordingly, our company does not engage in any manufacturing, distribution, or sales of products, nor is it foreseeable to expect that we will in the near future.

2. Development pipeline:

2.1. Cannabics SR for Cancer Anorexia-Cachexia Syndrome

Overview

We are developing Cannabics SR as a product candidate for the treatment of CACS. Cannabics SR is a sustained-release oral capsule containing a standardized compound of cannabinoids that has demonstrated a clinically significant weight increase in CACS patients in a peer-reviewed pilot study conducted by Dr. Gil Bar-Sela of the Rambam Hospital Health Care Campus, Division of Oncology, in Haifa, Israel. Our patent-pending technology provides for a convenient, once or twice daily administration, with rapid onset and a steady state of therapeutic effect for a 6 to 8-hour duration.

Cancer Anorexia-Cachexia Syndrome

CACS is a common complication of cancer associated with high morbidity and mortality. It is a complex metabolic syndrome in which a persistently elevated basal metabolic rate is not compensated for by adequate calorie or protein intake, causing involuntary and progressive weight loss leading to increasing functional impairment in cancer patients, especially in advanced stages of the disease. Once established, CACS cannot presently be reversed using available pharmacological or nutritional support techniques.

Unlike starvation, body-weight loss in CACS patients arises mainly from loss of muscle mass, characterized by increased catabolism of skeletal muscle and decreased protein synthesis. This weight loss is associated with important clinical outcomes such as increased morbidity, diminished effectiveness of chemotherapy, muscle wasting, inflammation, fatigue, and reduced survival expectations. The impact of CACS on the patient is not, however, limited to the effect of weight loss. Quality of life, functional abilities, symptoms, psychological outcomes, and social aspects are all affected by CACS.

According to the National Cancer Institute, nearly one-third of cancer deaths can be attributed to the severe weight loss and “metabolic mutiny” associated with CACS, and more than 50% of patients with cancer die with cachexia being present. The overall prevalence of CACS is currently estimated to range from 40% at cancer diagnosis to 70-80% in advanced phases of the disease (Source: Critical Reviews in Oncology/Hematology, 2013;88(3):625-636), while the overall prevalence of weight loss in cancer patients may be as high as 86% in the last 1-2 weeks of life (Source: Journal of Pain and Symptom Management 2007;34:94–104).

The cause and subsequent development of CACS is still poorly understood, but several factors and biological pathways are known to be involved, including inflammation, decreased secretion of anabolic hormones, and altered metabolic response. While there have been important advances in the study of CACS over the past decade, including progress in understanding its mechanisms and the development of promising pharmacologic and supportive care interventions, there is presently no effective pharmacologic therapy for CACS.

Current treatments for CACS are generally based on nutritional support and CACS pathophysiology-modulating drugs, with the most common being the progestogens, megestrol and medroxyprogesterone, and corticosteroids. Progestogens appear to stimulate appetite and improvements in body weight by increasing adipose tissue, but have not been confirmed to augment lean body mass. Megestrol also carries an increased risk of mortality and thromboembolism. Nonetheless, megestrol is the only FDA approved treatment option for CACS and no drug to date has been shown to be superior to it in efficacy and tolerability. Corticosteroids are also considered effective in stimulating appetite and reducing fatigue but should only be used for short periods and in selected cases because of side effects from longer term use, such as insulin resistance, fluid retention, steroidal myopathy, skin fragility, adrenal insufficiency, and sleep and cognitive disorders. Other drugs are being investigated or are in development. Given the dearth of approved therapies, we believe that CACS remains a significant area of unmet medical need.

Cannabinoid Therapies for CACS

Cannabis has long been suggested as a well-tolerated, safe, and effective option to help patients cope with cancer related symptoms with fewer serious side effects than most prescription drugs currently used as anti-emetics, analgesics, and the like. As such, cannabinoids are finding application in palliative care for reducing nausea and vomiting, alleviating cancer pain, and stimulating appetite, as well as improving quality of life in cancer patients. Dronabinol (Marinol®) and nabilone (Cesamet®), two drugs based on synthetic cannabinoids, have each been approved by the FDA for the treatment of chemotherapy-related nausea in patients who do not respond to conventional antiemetic therapy. Another drug, nabiximols (Sativex®), a specific cannabis extract, is approved in Canada and the United Kingdom for symptomatic relief of pain in advanced cancer patients.

Despite interest in cannabinoid-based therapies as a treatment for CACS, their use has been limited by impediments beyond the legal status of cannabis. The most significant obstacle is the lack of clinical research demonstrating their efficacy. While there is evidence that cannabinoids improve appetite, body weight, body fat level, caloric intake, mood, and quality of life in cancer patients, the few studies on these effects have yielded mixed and inconclusive findings. In addition, some of these studies have suffered from methodological constraints that limit any ability to draw firm conclusions.

The therapeutic use of cannabinoids has also been inhibited by limitations associated with traditional administration routes that reduce their effectiveness. Smoking and ingestion of cannabis suffer from wide variability in potency due to a lack of standardized and reproducible formulations. The ingestion of unformulated cannabis has also been associated with poor absorption and low bioavailability versus other administration routes, requiring higher doses and a greater risk of negative side effects. Additionally, the lack of available information on cannabinoid strains has made it difficult for healthcare providers to establish dosing rates. In our experience, however, the principal concern of patients with respect to medical cannabis lies in the undesirable side effects, such as disorientation and dizziness, which result from significant variability in peak blood levels of active cannabinoids soon after administration. We further believe that these side effects, which are common among immediate release methods, are a significant factor in the failure of patients to adhere to recommended treatment regimens and are therefore a pervasive threat to their health and wellbeing.

Cannabics SR

Cannabics SR is an oral composition in the form of a hydroxypropylmethylcellulose (HPMC) capsule containing a patent-pending formulation of cannabinoid extracts suspended in a lipid emulsion. It provides a relatively rapid onset of action, typically within 30-40 minutes, followed by a gradual and sustained release of active cannabinoids, resulting in a steady state level of beneficial effects for up to 6 to 8 hours with each capsule. Cannabics SR provides a consistent, predictable concentration of cannabinoids with an absorption profile and bioavailability of active ingredients that we believe to be superior to other oral cannabinoid administrations. We believe that the multifactorial benefits of the active pharmaceutical ingredients in Cannabics SR address an unmet medical need for a safe and effective treatment of CACS, leading to improved patient adherence and better health outcomes.

Cannabics SR capsules contain only food grade materials without any artificial additives. The active ingredients of each capsule are standardized in composition, formulation, and dose, and are comprised of only pure, natural extracts of active cannabinoids from selected strains of medical cannabis. All excipients are recognized by the FDA as Generally Regarded as Safe.

In addition to the therapeutic potential of Cannabics SR as a treatment for CACS, we believe that our SR technology may be formulated to serve the unique needs of patients suffering from other indications for which a sustained release of a cannabinoid formulation may be beneficial.

Clinical Development

In 2016, we commenced a two-year pilot study to evaluate the influence of Cannabics SR capsules on CACS, and, in particular, on weight loss in advanced cancer patients. The study was led by Professor Gil Bar-Sela, the former Deputy Director of the Division of Oncology at Rambam Health Care Campus, Head of the Palliative and Supportive Oncology Unit, and Head of Service for Melanoma and Sarcoma Patients.

Patients were administered 2 × 10 mg of Cannabics SR per 24 hours for six months. During the study, after some patients reported several psychoactive side effects, the dosage of each capsule was reduced to 5 mg. Almost no side effects were reported with the 5 mg dosage. Participants were weighed at each physician visit. The primary objective of the study was a weight gain of ≥10% from baseline. Of 24 patients who agreed to participate in the study, 17 started the Cannabics SR treatment, but only 11 received the capsules for more than two weeks. Three of six patients who completed the study period met the primary end-point. The remaining three patients had stable weights. In quality-of-life questionnaires patients reported less appetite loss after the Cannabics SR treatment (p=0.05). According to patients’ self-reports, improvement in appetite and mood as well as a reduction in pain and fatigue was demonstrated.

Despite various limitations, the preliminary study demonstrated a weight increase of ≥10% in 3 out of 17 (17.6%) of patients with doses of 5 mg × 1 or 5 mg × 2 capsules daily, without significant side effects. The remaining patients had stable weights. Also, all patients who remained in the study for at least 4.5 months reported an increase in appetite, as did 83% of the patients who completed the study. For 50% of the patients who completed the study, there were reports of pain reduction and sleep improvement. Additional results showed a significant decrease of appetite loss complaints among 83% of the patients who completed the study. (See Bar-Sela, Gil et al. “The Effects of Dosage-Controlled Cannabis Capsules on Cancer-Related Cachexia and Anorexia Syndrome in Advanced Cancer Patients: Pilot Study.” Integrative Cancer Therapies vol. 18 (2019): 1534735419881498. doi:10.1177/1534735419881498.)

Figure 1: Appetite loss among the six patients who completed Cannabics SR treatment, as reported on European Organization of Research and Treatment of Cancer Quality of Life Questionnaire (EORTC QLC-C30)

Commercialization

The results of our planned pilot studies may permit us to commercialize Cannabics SR in Israel under license by the Israeli Ministry of Health. If we are granted such a permit, we intend to engage a GMP manufacturer in Israel to produce Cannabics SR capsules for national distribution.

On May 13, 2020, the Israeli Ministry of Economy signed a Free Export Order, authorizing the export of GMP certified medical cannabis products from Israel. We are currently evaluating our export opportunities and optimal commercialization path for Cannabics SR across all available international markets, particularly with regard to the European Union, Canada, and Australia.

Cancer and Cancer Anorexia Cachexia Syndrome (CACS) Market Analysis

The dynamics of the cancer cachexia market are expected to shift in the coming years as a result of the positive outcomes of some of the rare candidates during the development stage by key players that are in the early stages of clinical development have the potential to create a significant positive shift. The emerging therapies are projected to be launched during the forecast period. In addition, the dearth of effective therapies for this condition presents a great opportunity for pharma companies to create novel drugs because there is less competition in the cancer cachexia market. Moreover, the rising awareness about the condition is also impacting the growth of the cancer cachexia market positively.

The Global Cancer Cachexia Market Size is projected to reach USD 2.93 billion by 2027, exhibiting a CAGR of 4.8% during the forecast period [2020-2027].

https://www.fortunebusinessinsights.com/cancer-cachexia-market-103262

North America region holds the largest market share of the global Cancer Anorexia-Cachexia Syndrome Drug North America is expected to hold a large market share in the global Cancer Anorexia-Cachexia Syndrome Drug Market due to the growing incidence of cancer cases. The International Agency for Research on Cancer (IARC) claims 13 million new cancer cases worldwide. The World Cancer Report provides that the incidence rate of new cancer cases is increased by 50% to 15 million in 2020. The existence of a highly developed healthcare system, the high degree of acceptance by medical practitioners of novel products, the total availability of advanced technological tools, FDA approval of new drugs and many companies are developing oncology products ( https://www.datamintelligence.com/research-report/ cancer-anorexia-cachexia-syndrome-drug-market)

2.2 RCC-33: colorectal cancer treatment drug candidate:

Our anti-neoplastic flagship product under development, RCC-33, is an antitumor drug candidate for the treatment of colorectal cancer, which is the 3rd most diagnosed and 2nd most lethal of all cancers, with approximately 2M new cases being diagnosed annually worldwide and a current market estimated at $12B, and which is expected to reach $17B by 2027.

The RCC-33 proprietary formula consists of a specific synthetic cannabinoid molecular composition that has demonstrated the potential to reduce colorectal cancer tumor volume by over 30% in repeated in-vivo studies performed.

Overview

Cancer and Cannabinoids

Cancer is a general term used to describe a group of more than 100 related diseases characterized by uncontrolled growth and spread of abnormal cells, leading to the development of a mass commonly known as a tumor, followed by invasion of the surrounding tissues and subsequent spread, or metastasis, to other parts of the body. Despite enormous investment in research and the introduction of new treatments, cancer remains a critical area of unmet medical need. According to the World Health Organization, cancer is the second leading cause of mortality worldwide, responsible for an estimated nearly 10 million deaths in 2021. As of January 1, 2019, there were more than 16.9 million people with a history of cancer living in the United States, with 1.9 million new cases and 609,360 cancer deaths expected in 2023 (Source: American Cancer Society. Cancer Facts & Figures 2023).

Over the past decade, there has been growing interest in the therapeutic value of cannabinoid compounds in oncology. Cannabis has long been suggested as a well-tolerated, safe, and effective option to help patients cope with cancer related symptoms by reducing nausea and vomiting, alleviating cancer pain, stimulating appetite, and improving quality of life. Beyond their palliative benefits, however, cannabinoids have also been receiving increased attention for their anti-cancer potential, which we believe may one day revolutionize cancer therapy.

Cannabinoids are a diverse class of chemical compounds that occur naturally within cannabis plants and are pharmacologically similar to cannabinoids produced by the human body, known as endocannabinoids. Endocannabinoids form part of the human endocannabinoid system (ECS), a complex biological network that also includes cannabinoid receptors and enzymes involved in cannabinoid formation, transport, and degradation. The ECS is regarded as an important endogenous system implicated in regulation of the most vital biological processes to maintain homeostasis, assisting the body to remain stable and balanced despite external, or environmental, fluctuations (Source: Current Pharmaceutical Design, 2016;22(12):1756-1766).

Dysregulation of the ECS owing to variation in the expression and function of cannabinoid receptors or enzymes or the concentration of endocannabinoids has been associated with several diseases, including cancer (Source: International Journal of Molecular Sciences, 2020;21(3):747). Indeed, the mechanisms involved in the regulation of the ECS as well as the processes that it regulates include practically every pathway important in cancer biology. Expression of the ECS is altered in numerous types of tumors, compared to healthy tissue, and this aberrant expression has been related to cancer prognosis and disease outcome, depending on the origin of the cancer (Source: British Journal of Pharmacology, 2018;175(13):2566-2580). Recent studies suggest that endocannabinoids contribute to maintaining balance in cell proliferation and that targeting the ECS can affect cancer growth (Source: Canadian Urological Association Journal, 2017;11(3-4):E138-E142).

Cannabinoids can interact with the cannabinoid receptors in the ECS, sometimes with a higher affinity than endocannabinoids. As a consequence, all the processes regulated by endocannabinoids are susceptible to interference by cannabinoids. The ability to use cannabinoids to modulate the ECS encompasses several attractive pharmacotherapeutic targets for systemic anti-cancer treatment and has sparked considerable research examining cannabinoid action on cancer cells (Source: Pharmacological Reviews, 2006;58(3):389-462).

Cannabinoids have demonstrated selective anti-tumor properties in preclinical studies, exerting anti-proliferative, proapoptotic, anti-angiogenic, and anti-metastatic and anti-inflammatory effects depending on tumor type and specific setting (Source: Cancer Medicine, 2018:7(3):765-775). These effects appear to be more pronounced when cannabinoids are used together versus being administered separately, a mechanism known as the entourage effect. We believe, therefore, that cannabinoid combinations may hold promise for an improved anti-proliferative strategy for cancer management.

In addition to their potential role as anti-cancer agents, cannabinoids have been observed to act synergistically with some conventional antineoplastic drugs, such as chemotherapeutic agents, enhancing their effectiveness (Source: Cancer Medicine, 2018;7(3)765-775). This raises the potential for combinational therapies that may increase the range of chemotherapeutic options available to patients and enable targeting of tumor progression at different levels while also permitting dosages of cytotoxic drugs to be dramatically reduced without compromising efficacy.

Figure 2: Synergistic effects of cannabis extracts and chemotherapies on cancer biopsy after treatment with the same extract and three different chemotherapy combinations

As of the date of this filing, we are not aware of any cannabinoid-based therapies approved for the anti-cancer treatment.

Our lead product candidate is RCC-33, which we are developing as a treatment for CRC. RCC-33 is an oral capsule containing a proprietary formulation of cannabinoids that have demonstrated synergistic efficacy in reducing the viability of human colon cancer cell lines in preclinical studies.

Colorectal Cancer

CRC is one of the more common forms of cancer worldwide, representing a significant challenge to the global healthcare system. According to the World Health Organization, CRC is the third most diagnosed cancer in the world and the second-leading cause of cancer-related mortality. In the United States, there were approximately 1,369,005 people living with CRC in 2019(Source: National Cancer Institute. “Cancer Stat Facts: Colorectal Cancer”). In 2023, an estimated 151,030 cases of colon cancer and 44,850 cases of rectal cancer will be diagnosed in the US, and a total of 52,580 people will die from these cancers (Source: American Cancer Society. “Cancer Facts & Figures 2023”).

Most CRCs begin as a noncancerous growth called a polyp that develops on the inner lining of the colon or rectum. The most common kind of polyp is called an adenomatous polyp or adenoma. According to the American Cancer Society, an estimated one-third to one-half of all individuals will eventually develop one or more adenomas. Although all adenomas have the capacity to become cancerous, fewer than 10% are estimated to progress to invasive cancer. The likelihood that an adenoma will evolve into cancer increases as it becomes larger or when it acquires certain histopathological characteristics. Adenomas that become cancerous, called adenocarcinomas, comprise nearly 96% of all CRCs (Source: American Cancer Society. “Colorectal Cancer Facts & Figures 2020-2023”). Adenocarcinomas may grow into blood vessels or lymph vessels, increasing the chance of metastasis to other anatomical sites.

CRC usually develops slowly, over a period of 10 to 20 years. The complex sequence of events occurring during initiation, development and propagation of adenocarcinomas is likely the result of a lifelong accumulation of mutations caused by both genetic and environmental factors known as the adenoma to carcinoma sequence. While the specific cause of any particular case of CRC is often unknown, more than one-half of all cases and deaths are attributable to lifestyle and environmental factors, such as smoking, unhealthy diet, high alcohol consumption, physical inactivity, and excess body weight (Source: American Cancer Society. “Cancer Facts & Figures 2020”).

CRC does not usually cause symptoms until the disease is advanced, therefore early detection of adenomas by screening is vital. If not treated or removed, an adenoma can become a potentially life-threatening cancer.

Current Standard of Care

Treatment options for CRC patients depend on several factors, including the type and stage of cancer, possible side effects, and the patient’s preferences and overall health. Surgical removal of the tumor is the most common form of treatment, particularly in the early stages of malignancy. Patients with more advanced stages of CRC may be given adjuvant chemotherapy to kill any cancer cells remaining after surgery, though standard chemotherapy is associated with severe side effects and provides marginal benefit to the majority of patients. While radiation therapy is often used to treat rectal cancer, it is not generally recommended for colon cancer patients except in the later stages of the disease (Source: American Cancer Society. “Treating Colorectal Cancer”).

CRC is a heterogeneous disease with distinct clinical, molecular, and pathophysiological characteristics. As a result, the response to treatment is variable between patients, even when they are diagnosed at the same clinical stage. Such heterogeneity remains an obstacle to the optimization of treatment for each individual. Researchers are continuing to investigate new treatment options, such as immunotherapy and targeted therapy, that focus upon the genes, proteins, and other factors in a particular tumor (Source: American Cancer Society. “Advances in Colorectal Research”).

Immunotherapy uses the body’s own immune system to kill cancer cells. There are already several FDA-approved immunotherapy options for CRC, such as pembrolizumab (Keytruda®), nivolumab (Opdivo®), and ipilimumab (Yervoy®). Many immunotherapies that have shown promise in addressing other types of cancer are also being tested for CRC. While immunotherapy has had some encouraging results, significant limitations remain. Its efficacy is often unpredictable, and the treatment can lead to the body becoming resistant or result in off-target toxicities where the body’s immune system attacks healthy tissue. Immunotherapy may take longer than other protocols and it is substantially more expensive than classical treatments (Source: Pharmacy & Therapeutics, 2017;42(8):514-521).

Targeted therapy uses drugs to target specific molecules inside cancer cells or on their surface to slow the growth of cancer, destroy cancer cells, and relieve cancer symptoms. There are different types of targeted therapy drugs, each working differently depending on what molecule the drug is targeting. A treatment is chosen based on the types of molecules expressed on the patient’s tumor cells, which allows doctors to tailor cancer treatment for each person. Several targeted therapy drugs, such as bevacizumab (Avasin®) and cetuximab (Erbitux®), are already used to treat advanced CRC. Despite showing clinical promise, targeted therapy has challenges, such as tumor heterogeneity, off-target toxicity, and acquired resistance (Source: Medical Research Journal, 2019;4(2):99-105). The lack of biomarkers by which to identify patients having a high probability of response is also a particularly significant obstacle. As with immunotherapy, the cost of targeted therapy is substantially higher than classical treatments.

We believe that there is no “magic bullet” to cure cancer and that a personalized combination of cancer treatments may be the best course for long term survival benefits in each case. To that end, the development of more prevention strategies and novel agents will be essential.

Cannabinoids and Colorectal Cancer

One area of increasing interest in the treatment of CRC lies in the development and use of cannabinoid therapeutics. The ECS is regarded as an important regulatory system in the gastrointestinal tract, being involved in several important functions such as motility, secretion, sensation, inflammation, and carcinogenesis. Recent studies advocate that the ECS plays a critical role in the development of CRC and should therefore be considered as an appropriate target for CRC inhibition (Source: Frontiers in Pharmacology, 2016;7:361). The expression of ECS components in CRC has been found to be increased and associated with poorer prognosis and advanced stages of disease (Source: Cannabis and Cannabinoid Research, 2018, 3(1):272-281). For example, cannabinoid receptors have been found to be overexpressed in tumor cells of the colon and this up-regulation has been postulated to be an indicator of cancer outcome (Source: British Journal of Pharmacology, 2018; 175(13): 2566-2580).

Research on the effects of cannabinoid compounds on CRC has demonstrated an ability to reduce the viability of CRC cell lines in vitro (Source: Cancer Medicine, 2018;7(3):765-775), while there is also convincing scientific evidence that cannabinoids are able to prevent or reduce carcinogenesis in different animal models of colon cancer (Source: Expert Review of Gastroenterology & Hepatology, 11:10, 871-873).

We believe that cannabinoids are a promising therapeutic agent for the treatment of CRC. We have conducted several in vitro unpublished studies using our bioinformatics platform to confirm that cannabinoids cause necrosis in colon cancer cells. While many cannabinoids demonstrate levels of toxicity on cancer cells, we have found that certain cannabinoid extracts and combinations show increased levels of toxicity relative to other isolated or combined cannabinoids. These findings have spurred the development of RCC-33, our product candidate for the treatment of CRC.

Figure 3: Synergistic effects of different cannabinoid combinations on viability of a colon cancer cell line.

RCC-33

We are developing RCC-33 as an oral capsule or solution containing high concentrations of the cannabinoids CBDV and CBGA in a novel formulation, which we believe may be effective in the treatment of adenocarcinomas of the colon. The cannabinoids in RCC-33 have demonstrated complex synergistic anti-tumor effects in combination, with no psychoactive effect. In our preclinical in vitro studies evaluating the influence of 15 different cannabinoids on human colon cancer cell lines (RKO, HCT116), alone and in combination, RCC-33 demonstrated clear efficacy in reducing the viability of colon cancer cells versus alternative cannabinoid combinations. Importantly, we could detect significant reduction effect on tumor development in mice inoculated with human colorectal cancer cells.

Development Plan

The company is currently preparing to launch Phase I/II (a) clinical study in 2024, for the evaluation of its lead drug candidates Cannabics SR for the treatment of patients with advanced cancer and cancer anorexia cachexia syndrome (CACS) and RCC-33 for the treatment of colorectal cancer. We plan to conduct further preclinical studies to establish the safety and efficacy before proceeding with first-in-human clinical testing.

Preclinical Studies

We plan to conduct non-clinical safety studies following Good Laboratory Practice (GLP) to evaluate the systemic and local toxicity of escalating doses of RCC-33 and establish dosing parameters. The results of these preclinical studies, which are expected in 2024, will guide our planned Phase I/II(a) clinical trial. The non-clinical requirements to support the development program will be verified with the FDA at a pre-IND meeting. Such studies may include repeated dose toxicity studies, male and female fertility studies, embryofetal development studies, animal abuse related studies, pharmacokinetics studies, drug-drug interaction studies, and others.

Clinical Trials

We plan to evaluate the safety, tolerability, and pharmacokinetic properties of Cannabis SR and RCC-33 in a Phase I/II(a) ascending dose clinical trial in CRC patients, commencing in the first quarter 2024. The clinical trial will examine the tolerability, pharmacokinetics, pharmacodynamics, and efficacy of multiple doses of RCC-33 in CRC patients. We are currently identifying potential contract research organizations and clinical trial centers to conduct the Phase I/II(a) human proof of concept study, which is estimated to cost $6,500,000. As of the date of this filing, however, the Company does not have sufficient funds to complete the Phase I/II(a) study.

Subject to the results from our Phase I trials, we plan to submit an IND to the FDA for RCC-33 with the clinical protocol for a Phase II double-blind placebo controlled clinical trial evaluating RCC-33 in patients with CRC at various dosing levels versus placebo. The outcomes from the planned Phase II human proof of concept trial will inform our decision regarding further steps in the clinical development of RCC-33.

Our Pipeline:

In addition to RCC-33, our colorectal cancer treatment drug candidate, the company has several other drug candidates under development, including PLP-33 for the local treatment of Lateral Spreading, or Sessile, colorectal polyps during colonoscopy, BRST-33 for the treatment of breast cancer, MLN-33 for the treatment of Melanoma and PRST-33 for the treatment of prostate cancer. These additional drug candidates are in the early stage of development and the company expects to complete the in-vivo research for each product by end of 2024.

Fig. 4

2.3 Product lines currently not actively developed:

The company has several product lines that are currently not being actively developed following company’s decision to focus its resources and attention exclusively on the development of its FDA route drug candidates, and SR Capsule described above. The product lines not actively developed include:

Cannabics CDx (evaluate) Drug Sensitivity Test

Cannabics CDx is an ex-vivo drug sensitivity test under development to provide healthcare providers with clinical decision support data from which they can identify, for a particular cancer patient undergoing cannabinoid therapy, which cannabinoids or cannabinoid combinations may have the most beneficial anti-cancer effects, and which cannabinoids may be contraindicated.

Company may revisit this decision at a later stage after launching the first in human clinical studies for the validation of its colorectal cancer treatment drug candidate RCC-33.

3. Market opportunity for cancer treatment drug candidates:

3.1. Neoadjuvant therapy:

According to the National Cancer Institute, Neoadjuvant Therapy is a "treatment given as a first step to shrink a tumor before the main treatment, which is usually surgery”.

Limitations:

· Mild to severe side effects · Suppressed immune system · Potential resistance of tumor residues to postoperative chemotherapy *

* “nCRT increases ITGH and may result in the expansion of resistant tumor cell populations in residual tumors”.

Frontiers in Oncology. 2019

The Effects of Neoadjuvant Chemoradiation in Locally Advanced Rectal Cancer—The Impact in Intratumoral Heterogeneity.

3.1.1 Neoadjuvant therapy in rectal cancer

Neoadjuvant chemoradiotherapy has become the standard treatment for locally advanced rectal cancer. Neoadjuvant chemoradiotherapy not only can reduce tumor size and recurrence, but also increase the tumor resection rate and anus retention rate with very slight side effect. Comparing with preoperative chemotherapy, preoperative chemoradiotherapy can further reduce the local recurrence rate and downstage. Middle and low rectal cancers can benefit more from neoadjuvant chemoradiotherapy than high rectal cancer.

3.1.2 Neoadjuvant therapy in breast cancer

In early breast cancer, surgery is the mainstay of curative treatment. Complementary local radiotherapy and systemic - adjuvant endocrine therapy or chemotherapy treatments are associated with the aim of reducing the risk of relapse according to the clinicopathological characteristics of the tumor. However, the possibility of administering these therapies prior to surgery in neoadjuvant setting offers several advantages:

· reduction in tumor size to improve respectability, · increased rate of conservative surgery improving esthetic results, · reduction in the extent of axillary surgery, · early treatment of micrometastatic disease

Fig5. Asco Guidelines for neoadjuvant therapy in breast cancer

According to ASCO guidelines most of the patients are eligible for neoadjuvant chemotherapy and are the end consumers of BRST-33, while the current treatment regimen negates severe side effects.

Side effects and risks of standard of care:

· nausea or vomiting · hair loss · nail or skin changes · appetite loss · weight changes · diarrhea or constipation · mouth sores · fatigue

3.2. Cannabinoid Neoadjuvant Therapy

For some time now, the FDA has promoted clinical studies on Cannabinoids as a growing range of stakeholders has expressed interest in development of drugs that contain cannabis and compounds found in cannabis. Recent legislative changes have also opened new opportunities for medical cannabis clinical research. As this body of research progresses and grows, the FDA is working to support drug development in this emerging scientific arena.

RCC-33 & BRST-33 – Potential safe drugs improving rectal and breast cancer neoadjuvant standard of care

RCC-33 & BRST-33 anticipated advantage over standard of care:

· Non-Suppressed immune system · potential low toxicity which is even more important in neoadjuvant treatment since patients will suffer less side effects. Since the two drug candidates are based on two natural molecules (cannabinoids) found in the Cannabis plant, the safety of the molecules in the short and long run is potentially lower. Not like in a new drug entity in which toxicity could not be predicted. · Overcoming Potential resistance of tumor residues to postoperative chemotherapy

3.3. Cancer Immunotherapy:

Our business strategy is to advance our programs through clinical studies with partners, and to opportunistically add programs in areas of high unmet medical needs through acquisition, collaboration, or internal development. Despite significant advances in oncology, there is still a large unmet need in treating patients with solid tumors, especially those with advanced disease who are refractory or unresponsive to currently available drugs. A business and clinical synergism of CNBX Pharmaceuticals and Tageza Pharmaceuticals is advancing towards unique therapeutics and optimizing their combination to expand oncology treatment options to cancer patients. The team work will be a unique collaboration of experienced scientist, physicians and exceptional healthcare research professionals. Within the partnership, CNBX Pharmaceuticals leverages it’s the cutting-edge infrastructure platform to support Tageza at various stages of drug development, including, target validation, compound validation and pre-clinical and clinical trial optimization. From Tageza Pharmaceutical partnership side, the clinical experience from one of the biggest Oncology Centers, access to data and insights as a result of large cohorts of patients during treatment, can be validated to determine patients who are most likely to benefit from novel cannabinoid treatments. The two companies continue in their collaboration, though no definitive agreement has closed to date.

Patients undergoing most of currently existing treatments benefit a reduction in tumor size but often relapse and develop more aggressive disease. The residual population of chemotherapy-resistant tumor cells is enriched by Tumor Initiating Cells (TIC) previously known as cancer stem cells (CSC). The TaGeza technology is targeting TIC/ CSC by re- purposing small molecules and generating specific antibody generation for targeted immunotherapy ADC (Antibody drug conjugates).

CSCs were first found in colorectal cancer. Because of its heterogeneity, drug resistance etc., it was difficult to completely eliminate CSCs using traditional treatment methods. The remaining CSCs can cause tumor recurrence and invasion, and ultimately the death of the patient. Therefore, developing a therapy that can effectively target CSCs will greatly promote the treatment of GI cancers (Sun, Y., Li, B., Cao, Q. et al. Targeting cancer stem cells with polymer nanoparticles for gastrointestinal cancer treatment. Stem Cell Res Ther 13, 489 (2023). https://doi.org/10.1186/s13287-022-03180-9)

Antibody Drug Conjugates ADC

Antibody–drug conjugate (ADC) is a new emerging class of highly potent pharmaceutical drugs, which is a great combination of chemotherapy and immunotherapy. Antibody–drug conjugate (ADC) is typically composed of a monoclonal antibody (mAbs) covalently attached to a cytotoxic drug via a chemical linker. It combines both the advantages of highly specific targeting ability and highly potent killing effect to achieve accurate and efficient elimination of cancer cells, which has become one of the hotspots for the research and development of anticancer drugs. Since the first ADC, Mylotarg® (gemtuzumab ozogamicin), was approved in 2000 by the US Food and Drug Administration (FDA), there have been 14 ADCs received market approval so far worldwide. Moreover, over 100 ADC candidates have been investigated in clinical stages at present. This kind of new anti-cancer drugs, known as “biological missiles”, is leading a new era of targeted cancer therapy. The target antigen expressed on tumor cells is the navigation direction for ADC drugs to identify tumor cells and it also determines the mechanism (e.g., endocytosis) for the delivery of cytotoxic payloads into cancer cells. Hence, an appropriate selection of target antigen is the first consideration for the designation of ADC. In order to reduce off-target toxicity, the targeted antigen firstly should be expressed exclusively or predominantly in tumor cells, but rare or low in normal tissues.22 The antigen is ideally a surface (or extracellular) antigen (Fu, Z., Li, S., Han, S. et al. Antibody drug conjugate: the “biological missile” for targeted cancer therapy. Sig Transduct Target Ther 7, 93 (2023). https://doi.org/10.1038/s41392-022-00947-7) The ADC Market indicators

Global sales of currently marketed ADCs are forecast to exceed US$16.4 billion in 2026. The market for ADCs is set to grow further beyond 2026, as novel agents enter clinical practice across several oncology indications. https://www.nature.com/articles/d41573-021-

4. Outsourced GMP manufacturing and commercial operation:

4.1. Outsourced GMP manufacturing

Our current position is that all of our Chemistry Manufacturing and Controls (CMC) required for the approval process of our drug candidates is to be outsourced. The RCC-33 formulation, as well as all additional drug candidates in our pipeline, while inspired by natural molecules, could consist only of formulations made from chemically synthesized molecules, or APIs (Active Pharmaceutical Ingredients). Our Company is not engaged in the development of any botanical or botanically based product/s. Additionally, in view of our upcoming submission of a pre-IND meeting request with the FDA, the Company the company will need to enter into an agreement with a manufacturer and supplier of GMP (Good Manufacturing Practice) grade APIs suited for Clinical Stage Products. There are a couple of large and long-established US corporation with a long track record of working with the FDA. Accordingly, the manufacturer will also need to provide support to CNBX throughout an IND filing process, including providing all necessary and related information concerning CMC in the form of a comprehensive technical package to be presented to the FDA. APIs supplied under said agreement will be used by Company in Phase I/II (a) clinical studies that it is planning to launch in 2024.

4.2. Commercial Operations

We have not established a sales, marketing, or product distribution infrastructure. We plan to commercialize any drugs we develop through licensing arrangements and strategic partnerships with established companies in the pharmaceutical industry having strong marketing capabilities and distribution networks. We generally intend to advance our drug candidates through Phase I and Phase II clinical trials as appropriate in order to establish their clinical and commercial potential before negotiating the terms of any licensing or collaboration. We believe that this approach will achieve the fullest marketing and distribution potential of any drugs or other products that we may develop in the short term.

5. Core activities:

5.1. Drug Discovery

Conduct all screening and pre-clinical research at in-house state of the art laboratory facilities

Our Research and Development:

To address these problems and improve clinical outcomes, CNBX Pharmaceuticals focuses on the development of diagnostics that monitor cancer progression and cannabinoid-cancer sensitivity tests to tailor treatment of cancer with cannabinoid medicine. Utilizing novel High-Throughput Screening (HTS) methods to perform studies on cancer cell lines and on circulating tumor cells (CTC) derived from cannabis medicated patients.

We aim to treat a wide scope of cancers both as the main treatment and as a conjugate to conventional chemotherapy. We believe a significant need remains for novel drugs for patients who do not respond to existing therapies or for whom these therapies bear undesirable side effects. We recognize the potential therapeutic applications of the synergistic effects of these active compounds thus building the methodology and procedures that decipher specific ratios of active compounds in regard to their antitumor activity.

Our government licensed laboratory operates a unique, custom designed and built research and development laboratory which combines high throughput screening, (HTS) capabilities with the most advanced data tools allowing us to enable miniaturization and automation of a variety of biological assays. The automated system is comprised of:

1. High Content Screening (HCS) Platform, which is an automated cellular imaging and analysis platform designed for quantitative microscopy.

2. Flow Cytometry, which enables multi-parametric single cell analysis.

3. Automated workstation, for liquid handling for dispensing accurate and reproducible volumes of liquids and compounds.

4. Multimode microplate reader, designed for fast measurements of numerous biological reactions/processes.

The integration of these instruments is enabled via a robotic arm, which allows a continuous process which utilizes all instruments.

Readouts generated from these instruments provide us with insights to the effect of our cannabinoid library on parameters such as, proliferation inhibition, apoptosis induction, angiogenesis prevention and toxicity on cancerous cells.

These experiments will produce multiplexed data composed of images of cells, cell specific markers and the extent/signal of the biological response. The biological response will be measured using different concentration of cannabinoids and their combinations, thus determining the most effective cannabinoid treatment for a specific cancer type.

In vitro Studies – Drug Screening

We have a proprietary procedure of high throughput screening (HTS) and high content screening (HCS) for the detection of correlations between cannabinoid ratios, dosages and anti-tumor activity using a growing library of human cancer cell lines and creating an enlarged variety of Cannabis-based compounds. We examine the biological activity of these compounds on tumor cell lines of distinct tissue lineage and creating a highly valuable therapeutic data. We Screen for the most potent cannabinoid/natural extracts. Our goal in the invitro studies is to build a library of both shaulfied and natural cannabinoid extracts and to reveal their biological impact on a library of cancer cell lines. The HTS technology enables us to gain this data base in a faster manner and to reveal more mechanisms of action that are related to the genetics of the cancer. We are now in the process of merging our data with sophisticated data mining to help find meaningful insights of both treatment and outcome.

Our core technology is a continuously evolving bioinformatics platform that utilizes high-throughput screening technology, advanced data analytics, and proprietary methodologies to rapidly examine the physiologic effect of multiple cannabinoid compounds on tumor cells. This technology enables us to screen thousands of cannabinoid combinations, generating multiple datasets on the anti-tumor properties of different cannabinoid formulations and ratios. We conduct a broad range of preclinical research on cannabinoids through our bioinformatics platform, which informs the development of our product drug candidates.

We have developed a continuously evolving preclinical bioinformatics platform that enables us to evaluate and classify the physiological impact of multiple cannabinoid compounds on various cancer cells. Utilizing state-of-the-art high-throughput screening and flow cytometry, our platform is capable of testing thousands of compounds weekly, allowing us to rapidly and effectively examine their interactions with a growing library of human cancer cell lines and biopsies. Through the large body of data generated by our platform, we are accumulating in-depth knowledge of the various therapeutic effects of cannabinoids and patterns of cannabinoid ratios that demonstrate meaningful physiologic impact on cancer.

Our bioinformatics platform includes the following:

Ø high-throughput screening, high content screening, flow cytometry, machine learning, robotics, and proprietary methodologies;

Ø a library of human cancer cell lines and thousands of different combinations and ratios of cannabinoid compounds in a costumed matrix;

Ø a growing database of biological response data;

Ø in-house extraction, processing methodologies, and analytical techniques that yield well-characterized and standardized extracts;

Ø collaborations with regulated cannabis producers that may expand our cannabinoid compound library and provide us with access for future proprietary cultivars;

Ø fully integrated in-house research and development; and

Ø regulatory expertise.

Once a series of potentially active cannabinoids is identified for a specific cancer type, we then test and confirm their activity through in vitro and ex-vivo evaluation studies to determine their potential activity. Through this process, we are able to assess their therapeutic potential. The results of our pre-clinical experiments provide starting points for our clinical development programs.

5.2. Intellectual Property

Expand and protect the technology, inventions, and trade secrets that are critical for business development.

Intellectual Property

Our success depends in significant part on our ability to protect the proprietary nature of our Product Prospects, technology and know-how, to operate without infringing on the proprietary rights of others; and to defend challenges and oppositions from others and prevent others from infringing on our proprietary rights, including our provisional patents described below.

We plan to continue to seek patent protection in the United States and other countries for our proprietary technologies. To date, our intellectual property portfolio includes three provisional patents, filed with the USPTO, related to our line of activity (pharmaceutical formulations; drug delivery; therapeutic uses of cannabinoids and other cannabis compounds and personalized cannabinoid diagnostics), as well as know-how and trade secrets.

Scientific Advisory Board:

The development of our drug candidates is taking place with the close guidance and support of our clinical advisory team consisting of world-renowned experts, including doctors and scientists with specific expertise in the fields of cancer research, cancer treatment, Oncology, Hematology, Melanoma, Gastroenterology, AI and FDA regulation. Our team of experts is highly qualified and respected worldwide, some members having numerous publications in their respected names, including in high authority peer reviewed publications such as The New England Journal of Medicine and Nature, to name only a few.

Results of Operations

For the Three Months Ended ~~February~~May 2931, ~~2024~~2023 and ~~February 28, 2023~~2022

Revenues

For the three months ended ~~February~~May 2931, 2024, ~~our~~ ~~total revenues~~ there were ~~$40~~no incomes,~~637~~ compared to ~~non~~$310,165 for the three months ended ~~February~~May 2831, 2023~~. The company revenues were resulted from a lab and development services provided for a third party.~~

~~Cost~~The company revenues are consisting of laboratory services ~~provided~~.

For the three months ended February 29, 2024, our total Cost of services provided were $6,220 compared to non for the three months ended February 28, 2023.

Gross Profit

For the three months ended February 29, 2024, our gross profit was $34,417 compared to non for the three months ended February 28, 2023.

Operating Expenses

For the three months ended ~~February~~May 2931, 2024, our total operating expenses were $~~240~~152,~~845~~278 compared to $~~250~~483,~~010~~247 for the three months ended ~~February~~May 2831, 2023, resulting in a decrease of $9330,~~165~~969. The decrease is attributable to a ~~total~~ decrease of $~~104~~110,~~037~~738 in general administration, and sales and marketing expenses and an ~~increase~~a decrease of $94220,~~871~~ 231 in research and development expenses due to a reduction in the company's activities.

~~The~~We ~~decrease~~realized infinancial ~~general~~loss ~~administration~~of $21,646 ~~and~~for ~~sales~~the ~~and~~three ~~marketing~~months ~~expenses~~ended isMay ~~mostly~~31st, ~~due~~2024, compared to ~~the~~$18,392 ~~termination~~for of the ~~Tel~~three ~~Aviv~~months ~~office~~ended ~~lease~~May 31, 2023.

WeAs ~~incurred~~a ~~other loss of $119~~result,~~031~~ ~~for~~ the ~~three months~~net ~~ended February 29, 2024, compared to other~~ loss ~~of $2,374,311 for the three months ended February 28, 2023. The decrease in other loss~~ was ~~mainly attributable to a capital loss from a realization of equipment of~~ $~~123~~130,~~711~~632 for the three months ended ~~February~~May 2931st, 2024, compared to a ~~capital~~net loss ~~due to a realization~~ of ~~the Company’s shares held in Sativus Inc of~~ $2154,~~395,298~~690 infor the three months ended ~~February~~ 28May 31, 2023.

As a result, the net loss was $325,459 for the three months ended February 29, 2024, compared to a net loss of $2,624,321 for the three months ended February 28, 2023.

Net Loss

Net loss ~~for the three months ended February 29, 2024~~ was $~~325~~130,~~459~~632 compared to net loss $2154,~~624,321~~ 690 for the three months ended ~~February~~May 2831st, ~~2023~~2024, for the reasons ~~explained~~noted ~~above~~supra.

For the ~~Six~~nine Months Ended ~~February~~May 2931st, 2024 and ~~February 28,~~ 2023

Revenues

For the ~~six~~nine months ended ~~February~~May 2931, 2024, our total income ~~revenues were~~ $130,074 compared to ~~non~~$310,165 for the ~~six~~nine months ended ~~February~~May 2831, 2023. ~~The company revenues were resulted from a lab and development services provided for a third party.~~

~~Cost~~The company revenues consist of ~~services~~laboratory ~~provided~~services.

~~For the six months ended February 29, 2024, our total Cost of services provided were $17,570 compared to non for the three months ended February 28, 2023.~~14

Gross Profit

For the six months ended February 29, 2024, our gross profit was $112,504 compared to non for the three months ended February 28, 2023.

Operating Expenses

For the ~~six~~nine months ended ~~February~~May 2931, 2024, our ~~total~~ total operating expenses were $~~490~~660,~~832~~680 compared to $~~596~~1,~~800~~080,046 for the ~~six~~nine months ended ~~February~~May 2831, 2023, resulting in a decrease of $~~105~~419,~~968~~366. ~~The~~ The decrease is attributable to a ~~total~~ decrease of $~~239~~349,~~020~~758 in general administration, and sales and marketing expenses ~~and~~mostly andue ~~increase~~to decrease in salaries of $~~133~~120,~~052~~100, share based payment of $40,760 $ and Professional services of $83,504 and a decrease of $69,608 in research and development expenses.

We ~~incurred~~realized ~~another~~financial loss of $~~125~~15,~~654~~075 for the ~~six~~ nine months ended ~~February~~May 2931, 2024, compared to ~~other~~financial ~~expenses~~income of $228,~~385,190~~499 for the ~~six~~nine months ended ~~February~~May 2831, 2023. The ~~decrease~~increase in ~~other~~financial loss was mainly attributable to aCurrency ~~capital~~exchange loss from a realization of equipment of $123,711, compared to a capital loss due to a realization of the Company’s shares held in Sativus Inc of $2,395,298 in the three months ended February 28, 2023differences. ~~a result, the net loss was $$503,982 for the six months ended February 29, 2024, compared to a net loss of $2,395,298 for the six months ended February 28, 2023.~~

~~Net~~We ~~Loss~~incurred capital loss from a realization of equipment of $88,934 for the nine months ended May 31, 2024, compared to a capital loss of $2,395,298 for the nine months ended May 31, 2023 incurred form a realization of the Company’s shares held in Sativus Inc.

~~Net~~As a result, the net loss was $634,614 for the nine ~~six~~ months ended ~~February~~May 2931, ~~2024~~ ~~was $503~~2024,~~982~~ compared to a net loss of $23,~~981~~136,~~990~~680 for the ~~six~~nine months ended ~~February~~May 2831, 2023~~, for the reasons explained above~~.

Net loss

Net loss was $634,614 compared to $3,136,680 for the nine months ended May 31, 2024 and May 31, 2023, for the reasons explained supra.

Liquidity and Capital Resources

Overview

As of ~~February~~May 2931, 2024, we had $3773,~~142~~406 in cash ~~compared~~ compared to $129,696 on August 31, 2023. We expect to incur a minimum of $1,000,000 in expenses during the next twelve months of operations. We We estimate that these expenses will be comprised primarily of general expenses including overhead, legal and accounting fees, research ~~and~~ and development expenses, and fees payable to outside medical centers for clinical studies.

Liquidity and Capital Resources during the ~~Six~~nine Months Ended ~~February~~May 2931, ~~2024~~2023 compared to the ~~Six~~nine Months Ended ~~February~~May 2831, ~~2023~~2022

We used cash in operations of $196,~~244~~019 for the ~~six~~nine months ended ~~February~~May 2931, 2024, compared to cash used in operations of $~~114~~133,~~447~~038 for the ~~six~~nine months ended ~~February~~May 2831, 2023. The negative ~~cash~~ cash flow from operating activities for the ~~six~~nine months ended ~~February~~May 2831, 2024, is primarily attributable to the Company's net loss from ~~operations~~ operations of $~~503~~634,~~982~~614, ~~and~~offset anby ~~increase~~depreciation of $3272,~~163~~320, incapital ~~account~~loss ~~receivables~~of ~~and~~$88,934, ~~prepaid~~an ~~expenses~~increase ~~offset~~in byaccounts ~~share~~payables ~~based~~and ~~compensation~~accrued liabilities of $6967,~~950~~809, ~~interest~~an ~~expenses~~decrease ~~in a total~~ of $1687,~~798,~~991 ~~depreciation~~in ofaccount ~~$72,320,~~receivables ~~Capital~~and ~~loss~~prepaid ofexpenses, $and ~~123,711~~share abased ~~decrease~~payment in ~~accounts~~a ~~payables~~total ~~and accrued liabilities~~ of $57104,~~122~~745.

We had cash flow from investing activities of $18113,~~804~~477 during the ~~six~~nine months ended ~~February~~May 2931, 2024, compared to cash ~~used~~flow ~~from~~ investing activities of $24,702 for the ~~six~~nine months ended ~~February~~ 28May 31, 2023. The cash flow ~~was~~ from ~~realization~~investing ofactivities ~~equipment~~is ofmainly ~~$20,000~~due ~~off set by purchase of fixed assets in the aggregate amount of $1,196 for the six months ended February 29, 2024, comparing~~ to ~~cash~~sale ~~flow from realization~~ of ~~the~~equipment ~~Company’s shares held in Sativus Inc~~ of $24114,~~702~~673.

We had cash flow from financing activities of $26,252 convertible loan during the nine months ended May 31, 2024, compared to $34,972 convertible loan for the nine months ended May 31, 2023.

We will have to raise funds to pay for our expenses. We may have to borrow money from shareholders, issue equity or enter into a strategic arrangement with a third party. There can be no assurance that additional capital will be available to us. We currently have no arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. Since we have no such arrangements or plans currently in effect, our inability to raise funds for our operations will have a severe negative impact on our ability to remain a viable company.

Going Concern

~~Our~~Due to the uncertainty of our ability to meet our current operating and capital expenses, our independent auditors included an explanatory paragraph in their report on the ~~accompanying unaudited~~ audited financial statements for the year ended August 31, 2023 regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

Our unaudited financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they become due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that we will be able to continue as a going concern. Our unaudited financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

There is no assurance that our operations will be profitable. Our continued existence and plans for future growth depend on our ability to obtain the additional capital necessary to operate either through the generation of revenue or the issuance of additional debt or equity.

Off-Balance Sheet Arrangements

We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experiences and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions and conditions. We continue to monitor significant estimates made during the preparation of our financial statements. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.

See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 2, “Summary of Significant Accounting Policies” in our audited consolidated financial statements for the year ended August 31, 2023, included in our Annual Report on Form 10-K as filed on November 30^th, 2023, for a discussion of our critical accounting policies and estimates.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The disclosure required under this item is not required to be reported by smaller reporting companies; as such term is defined by Item 503(e) of Regulation S-K.

Item 4. Controls and Procedures.

(a)

Evaluation of Disclosure Controls and Procedures

The Company maintains a set of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In accordance with Rule 13a-15(b) of the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of the Company’s management, including its Chief Executive Officer, Chief Financial Officer and the full Audit Committee, of the effectiveness of its disclosure controls and procedures. The Audit Committee assessed, reviewed and determined that the Company’s disclosure controls and procedures were effective as to this quarterly filing. Based on that evaluation, The Board accepted and ratified the findings of the Audit Committee that the Company’s disclosure controls and procedures, as of ~~February~~May ~~28th~~31st, ~~2024~~2023, the end of the period covered by this Quarterly Report on Form 10-Q, were effective to to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the ~~Exchange~~ Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to the Company’s management, including the Chief Executive Officer, Chief Financial Officer, and Audit Committee as appropriate to allow timely decisions regarding required disclosure.

(b)

Changes in Internal Control over Financial Reporting

Since our annual report, the Company has ~~maintained~~ maintained an Audit Committee to better review our internal financial reporting. There were no other changes in our internal control over ~~financial~~ financial reporting during the period ending ~~February~~May ~~28th~~31, 2024, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

(c)

Limitations on the Effectiveness of Internal Controls

Readers are cautioned that our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our control have been detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any control design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

3517

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Item 2. Recent Sale of Unregistered Securities

None.

Item 5. Other Information

During the quarter ended May ~~February 29~~31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits

Exhibit 31.1*	Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).
Exhibit 31.2*	Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).
Exhibit 32.1**	Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.2**	Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS***	~~Inline~~ XBRL Instance Document
101.SCH***	~~Inline~~ XBRL Taxonomy Extension Schema Document
101.CAL***	~~Inline~~ XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF***	~~Inline~~ XBRL Taxonomy Extension Definition Linkbase Document
101.LAB***	~~Inline~~ XBRL Taxonomy Extension Label Linkbase Document
101.PRE***	~~Inline~~ XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

______________________________

*	Filed herewith.

**	Furnished herewith.

***	XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

3618

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CNBX Pharmaceuticals Inc.
Date: April 16, 2024	By:	/s/ Eyal Barad
Date: July 15, 2024	By:	/s/ Eyal Barad
		Eyal Barad
	Title:	Chief Executive Officer (Principal Executive Officer)
Date: April 16, 2024	By:	/s/ Uri Ben Or
Date: July 15, 2024	By:	/s/ Uri Ben Or
		Uri Ben Or
	Title:	Chief Financial Officer (Principal Financial Officer)

3719

Filing Compare · CNBX Pharmaceuticals Inc.