10-Q: CNBX Pharmaceuticals Reports Q1 2024 Results: Net Loss Decreases Amidst Ongoing Development of Cancer Therapies

Sentiment:

Quarterly Report 12 January 2024 10:13 AM

📋All filings for Cnbx Pharmaceuticals INC

CNBX Pharmaceuticals reports a decreased net loss for the three months ended November 30, 2023, while continuing to advance its cannabinoid-based cancer treatment programs.

Delay expectedThe company has delayed the Phase I/II (a) clinical study in 2023 due to lack of funds.

Capital raiseThe company states that it will have to raise funds to pay for its expenses.The company may have to borrow money from shareholders, issue equity or enter into a strategic arrangement with a third party.The company currently has no arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.

Worse than expectedThe company's cash position has decreased, and it needs to raise additional capital to continue operations.The company's auditors have expressed concerns about its ability to continue as a going concern.

Summary

CNBX Pharmaceuticals Inc. reported its financial results for the first quarter of fiscal year 2024, ended November 30, 2023.
The company is a pre-clinical stage biopharmaceutical company focused on developing cannabinoid-based products for cancer treatment, particularly colorectal cancer (CRC).
The company's lead drug candidate, RCC-33, is being developed for colon cancer treatment, with plans to begin Phase I/II clinical trials in 2025.
For the three months ended November 30, 2023, CNBX reported revenues of $89,437.
Operating expenses totaled $261,337, a decrease from $346,790 in the same period of the previous year.
The net loss for the quarter was $178,523, a decrease from $357,669 in the prior year's quarter.
As of November 30, 2023, the company had $81,647 in cash and cash equivalents.
The company anticipates incurring a minimum of $1,000,000 in expenses over the next twelve months and will need to raise additional funds.
The company's independent auditors have raised concerns about its ability to continue as a going concern.
During the three months ending November 30, 2023, the Company issued 5,700,000 shares of its common stock to an investors as a result of a convertible loan exercise in the sum of $ 65,908.

Sentiment

Score: 4

Explanation: The sentiment is neutral to slightly negative. While the company has made progress in reducing its net loss and operating expenses, it faces significant financial challenges and uncertainty about its ability to continue as a going concern. The delay in clinical trials and the need for additional funding also contribute to the negative sentiment.

Positives

The net loss decreased significantly compared to the same quarter of the previous year.
Operating expenses were reduced, primarily due to lower general and administrative expenses.
The company is progressing with its drug development pipeline, particularly RCC-33 for colorectal cancer.
The company is planning to launch Phase I/II (a) clinical study in 2025, 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.

Negatives

The company continues to operate at a loss.
Cash reserves are low, and the company needs to raise additional capital to continue operations.
Auditors have expressed concerns about the company's ability to continue as a going concern.
The Phase I/II (a) clinical study in 2023 has been delayed due to lack of funds.

Risks

The company's ability to continue as a going concern is uncertain due to its limited cash reserves and ongoing losses.
Raising additional capital may be difficult, and the company has no current arrangements for securing funding.
The development of cannabinoid-based therapies is subject to regulatory risks and market acceptance challenges.
The company's planned clinical trials may be delayed or unsuccessful.
The company faces competition from other companies developing cancer treatments.

Future Outlook

The company plans to launch Phase I/II(a) clinical study in 2025 for Cannabics SR and RCC-33, but requires additional funding to continue operations and clinical development.

Industry Context

CNBX Pharmaceuticals operates in the competitive biopharmaceutical industry, focusing on cannabinoid-based therapies for cancer treatment, a field with increasing interest and research but also significant regulatory hurdles and market acceptance challenges. The company is focusing on neoadjuvant therapy.

Comparison to Industry Standards

CNBX Pharmaceuticals is a pre-clinical stage company, so it is difficult to compare it directly to larger, revenue-generating pharmaceutical companies.
However, its focus on cannabinoid-based therapies aligns with a growing trend in the industry, with companies like GW Pharmaceuticals (now part of Jazz Pharmaceuticals) having successfully developed and commercialized cannabinoid-based drugs.
The company's research and development efforts are similar to those of other small biotech companies focused on novel cancer therapies.
However, CNBX's financial resources are significantly smaller than many of its competitors, which poses a challenge to its ability to advance its drug candidates through clinical trials and regulatory approval.

Related Party Transactions

During the three months ending November 30, 2023, the Company paid $ 16,685 in salaries expenses, including socials benefits, to two directors.
During the three months ending November 30, 2023 the Company accrued $ 85,670 in salaries, including socials benefits, to our CEO and chairman.
As of November 30, 2023, the Company had a balance outstanding payable to two directors: Gabriel Yariv and Eyal Barad in the total of $ 698,854 .
During the three months ending November 30, 2023, the Company recorded a non cash expense of $ 34,975 as share-based expense, to the board chairman.
The Company had a balance outstanding at November 30, 2023 and at November 30, 2022 of $ 223,645 payable to Cannabics, Inc. The advance is due on demand and bears no interest.

Stakeholder Impact

Shareholders face the risk of further dilution if the company issues additional equity to raise capital.
Employees' job security is uncertain due to the company's financial challenges.
The company's ability to develop and commercialize new cancer treatments could benefit patients in the long term.
Creditors face the risk of non-payment if the company is unable to secure additional funding or generate revenue.

Next Steps

Conduct further preclinical studies to establish the safety and efficacy of RCC-33 and Cannabics SR.
Seek FDA guidance at a pre-IND meeting.
Identify potential contract research organizations and clinical trial centers.
Secure additional funding to support operations and clinical trials.
Launch Phase I/II(a) clinical study in 2025 for Cannabics SR and RCC-33.

Key Dates

Date	Description
2004-09-15	CNBX Pharmaceuticals Inc. was incorporated in the State of Nevada.
2010-09-30	Increased authorized capital and effected a 20-for-1 reverse split of common stock.
2014-04-25	Cannabics, Inc. acquired a majority of the issued and outstanding common stock of the Company.
2014-05-21	The Company changed its name to CNBX Pharmaceuticals Inc.
2014-06-19	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.
2014-08-25	The Company organized G.R.I.N. Ultra Ltd. (GRIN), an Israeli corporation, as a wholly-owned subsidiary.
2017-07-24	The Company announced its establishment of a genetics laboratory to develop diagnostic tools based on human genome, tumor genetics and specific cannabinoids.
2020-08-20	The Company announced the creation of a new division for its anti-tumor drug candidate RCC-33, for the treatment of colorectal cancer.
2020-12-16	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.
2020-12-21	Closed the first tranche and issued a note in the amount of $825,000 (the Initial Note).
2021-02-22	Closed the second tranche and issued a second note in the amount of $550,000 (the Second Note).
2021-04-23	Closed the third tranche and issued a third note in the amount of $1,375,000 (the Note).
2022-02-15	Entered into a forbearance agreements with the institutional investor relating to that certain Senior Secured Note.
2022-03-16	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.
2022-06-15	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).
2022-10-18	The Company filed 2 new provisional patent applications on compositions and methods for treating cancer, including colorectal cancer and early intervention therapy for colorectal cancer patients.
2022-11-28	Entered into a forbearance agreements with the institutional investor relating to that certain Senior Secured Note.
2023-06-12	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 of issuance expenses).
2023-10-13	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).
2023-11-30	End of the quarterly period for this report.
2023-12	The company issued 2,800,000 shares as a result of a CLA conversion.
2024-01-12	Date of report filing.
2025	Planned launch of Phase I/II (a) clinical study for Cannabics SR and RCC-33.

Keywords

pharmaceuticals, cancer, cannabinoids, RCC-33, colorectal cancer, clinical trials, drug development, biopharmaceutical, CNBX, CACS

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