10-Q: CNBX Pharmaceuticals Reports Q1 2026 Loss, Cash Dwindles
Quarterly Report
CNBX Pharmaceuticals Inc. reported a significant increase in net loss and a critically low cash position for the three months ended November 30, 2025, raising substantial doubt about its ability to continue as a going concern.
Summary
- Net loss for the three months ended November 30, 2025, increased to $113,719, compared to a net loss of $34,352 for the same period in 2024.
- Cash and cash equivalents decreased to $7,703 as of November 30, 2025, down from $15,111 at August 31, 2025, and $17,339 at November 30, 2024.
- Total operating expenses rose to $64,002 for the quarter, up from $36,837 in the prior year, primarily due to increased general and administrative expenses, including salaries.
- The company incurred a financial loss of $49,717, a significant change from a financial income of $2,485 in the comparable prior-year period, mainly due to interest on converted loans.
- Cash used in operating activities was $47,408 for the three months ended November 30, 2025.
- The company has accumulated losses since inception totaling $25,382,095.
- Common stock outstanding increased to 870,768,095 shares as of January 12, 2026, reflecting significant dilution from the conversion of loans into shares.
- Management expects to incur a minimum of $150,000 in expenses over the next twelve months, primarily for general expenses, legal and accounting fees, research and development, and clinical studies.
- The company is a pre-clinical-stage biopharmaceutical company developing RCC-33 for colorectal cancer and hoped to start first in human Phase I/II clinical trials in 2025.
Sentiment
Score: 2
Explanation: The company is in severe financial distress, evidenced by critically low cash reserves ($7,703), a substantial increase in net loss, and an explicit 'going concern' warning from management and auditors. It generates no revenue and relies heavily on dilutive financing, with significant operational expenses and no clear path to profitability. The high risk of failure to raise necessary capital makes the stock a speculative and highly risky investment.
Positives
- Disclosure controls and procedures were evaluated as effective as of November 30, 2024.
- No legal proceedings were reported during the period.
- No Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers.
Negatives
- Net loss significantly increased by 230% to $113,719 for the quarter compared to $34,352 in the prior year.
- Cash and cash equivalents are critically low at $7,703, indicating severe liquidity issues.
- The company has incurred cumulative losses of $25,382,095 since inception.
- Operating expenses increased without any corresponding revenue generation.
- A financial loss of $49,717 was recorded, contrasting with a financial income in the prior year, primarily due to interest on converted loans.
- The company explicitly states 'substantial doubt about the ability of the Company to continue as a going concern'.
- Significant shareholder dilution occurred with the issuance of 199,234,460 shares from convertible loan conversions during the quarter, and an additional 117,571,429 shares post-period end.
Risks
- Substantial doubt exists about the company's ability to continue as a going concern due to recurring net losses and negative cash flows from operations.
- The company's continuation is dependent upon its ability to generate revenues and/or raise additional investment capital, with no assurance of success in these efforts.
- Inability to raise sufficient funds for operations will have a severe negative impact on the company's viability.
- Risks inherent in being a pre-clinical-stage biopharmaceutical company, including the success of clinical trials, regulatory approvals, and market acceptance of products.
- Competition within the biopharmaceutical and oncology markets.
- Challenges in attracting and retaining key personnel.
- Difficulties in establishing and maintaining development partnerships.
- Regulatory developments in the U.S. and foreign countries, particularly those related to changes in and enforcement of cannabis laws, given the company's history and related party connections.
- Ability to obtain and maintain intellectual property protection for its products.
- Inherent limitations in internal control systems, which may not prevent all fraud and material error.
Future Outlook
The company hopes to start first in human Phase I/II clinical trials for its drug candidate RCC-33 in 2025. Its business strategy involves advancing programs through clinical studies, potentially with partners, and opportunistically adding new programs via acquisition, collaboration, or internal development. The company anticipates incurring a minimum of $150,000 in expenses over the next twelve months and will need to raise additional funds through shareholder loans, equity issuance, or strategic arrangements, with no assurance that such capital will be available.
Management Comments
- "Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern."
- "We expect to incur a minimum of $150,000 in expenses during the next twelve months of operations."
- "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."
- "Our inability to raise funds for our operations will have a severe negative impact on our ability to remain a viable company."
- "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."
Industry Context
CNBX Pharmaceuticals operates in the highly capital-intensive and high-risk biopharmaceutical industry, specifically focusing on oncology. As a pre-clinical stage company, it faces significant challenges in drug development, including the need for successful clinical trials, regulatory approvals, and substantial, continuous funding. The company's focus on colorectal cancer addresses a critical unmet medical need, but this therapeutic area is characterized by intense competition. The historical connection to cannabis and the related party 'Cannabics, Inc.' suggests a potential, though currently unstated, future diversification or pivot, which could align with broader trends in cannabinoid-based therapeutics, but its current stated focus is on traditional oncology drug development.
Comparison to Industry Standards
- As a pre-clinical stage biopharmaceutical company, CNBX Pharmaceuticals' lack of revenue and significant losses are typical for early-stage ventures in this high-risk industry.
- The company's cash position of $7,703 is critically low and significantly below what is typically required for a biopharmaceutical company aiming to initiate Phase I/II clinical trials, which can cost millions to tens of millions of dollars.
- The heavy reliance on convertible debt and related party loans, coupled with substantial shareholder dilution, indicates a precarious financial position compared to more robustly funded industry peers.
- The explicit 'going concern' warning is a standard disclosure for companies in severe financial distress, but the magnitude of the cash burn relative to available capital highlights an acute liquidity crisis.
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Disclosure Controls Evaluation | Management assessed, reviewed, and determined that the company's disclosure controls and procedures were effective as of November 30, 2024. | 2024-11-30 | Indicates management's confidence in the effectiveness of internal controls for financial reporting, though the evaluation date precedes the current reporting period. |
Related Party Transactions
- Paid $11,725 in salaries and social benefits to the CEO and director for the three months ended November 30, 2025, compared to $9,152 in the prior year.
- Accrued $21,643 in salaries and social benefits to the CEO and chairman for the three months ended November 30, 2025, compared to $0 in the prior year.
- Paid $18,925 in bookkeeping expenses to the CFO for the three months ended November 30, 2025, compared to $8,215 in the prior year.
- A balance of $1,045,115 was outstanding payable to two directors (Gabriel Yariv and Eyal Barad) as of November 30, 2025.
- A balance of $4,230 was outstanding payable to the CFO as of November 30, 2025.
- A balance of $223,645 was outstanding payable to Cannabics, Inc. as of November 30, 2025, and November 30, 2024; this advance is due on demand and bears no interest.
Stakeholder Impact
- Shareholders face significant dilution from ongoing convertible loan conversions, with 199,234,460 shares issued during the quarter and an additional 117,571,429 shares post-period end, and risk of further loss due to the company's going concern status.
- Management and employees face uncertainty regarding continued employment and compensation given the company's severe financial distress.
- Creditors, particularly holders of convertible notes and related parties, face high risk of default, as indicated by forbearance agreements and the company's precarious financial position.
- Potential partners for clinical trials face elevated risk due to the company's financial instability and limited cash reserves.
Next Steps
- Advance programs through clinical studies, including with partners.
- Opportunistically add programs in areas of high unmet medical needs through acquisition, collaboration, or internal development.
- Start first in human Phase I/II clinical trials for RCC-33 (hoped for in 2025).
- Raise additional funds to cover operating and capital expenses.
Key Dates
| Date | Description |
|---|---|
| 2004-09-15 | Company incorporated in Nevada as Thrust Energy Corp. |
| 2011-05 | Company changed name to American Mining Corporation. |
| 2014-04-25 | Cannabics, Inc. acquired a majority of the company's common stock, resulting in a change of control. |
| 2014-05-21 | Company changed its name to CNBX Pharmaceuticals Inc. via merger in Nevada. |
| 2014-06-03 | Board of Directors declared a two-to-one forward stock split. |
| 2014-06-19 | FINRA granted final approval of name and ticker symbol change to CNBX. |
| 2014-06-25 | FINRA approved the stock split. |
| 2014-08-25 | Company organized G.R.I.N. Ultra Ltd. (GRIN) as a wholly-owned subsidiary in Israel. |
| 2020-12-16 | Entered into a Securities Purchase Agreement (SPA) for a private placement of senior secured convertible notes. |
| 2020-12-21 | Closed the first tranche of convertible notes, issuing an Initial Note for $825,000. |
| 2021-02-22 | Closed the second tranche of convertible notes, issuing a Second Note for $550,000. |
| 2021-04-23 | Closed the third tranche of convertible notes, issuing a Note for $1,375,000; also entered into a Senior Secured Promissory Note for $1,375,000. |
| 2022-03-16 | Issued a demand promissory note for $280,000. |
| 2022-05-12 | Effected a 1:120 reverse stock split. |
| 2022-06-15 | Entered into a Securities Purchase Agreement for a Convertible Promissory Note in the principal amount of $154,250. |
| 2022-11-28 | Entered into a forbearance agreement with an institutional investor relating to the Senior Secured Note. |
| 2023-01-01 | Period during which a Securities Purchase Agreement for a Convertible Promissory Note of $35,000 was entered into (through March 31, 2023). |
| 2023-06-12 | Entered into a Securities Purchase Agreement for a Convertible Promissory Note in the principal amount of $65,000. |
| 2023-08-05 | Due date for Convertible Promissory Note from June 12, 2023. |
| 2023-11-29 | Filed Annual Report on Form 10-K for the year ended August 31, 2023. |
| 2024-09-24 | Entered into a Securities Purchase Agreement for a Convertible Promissory Note in the principal amount of $30,000. |
| 2024-11-30 | End of the prior year's first fiscal quarter. |
| 2024-12-30 | Entered into a Securities Purchase Agreement for a Convertible Promissory Note in the principal amount of $25,000. |
| 2025-01-01 | Due date for Convertible Promissory Note from September 24, 2024. |
| 2025-02-03 | Entered into a Securities Purchase Agreement for a Convertible Promissory Note in the principal amount of $55,000. |
| 2025-04-01 | Due date for Convertible Promissory Note from December 30, 2024. |
| 2025-04-24 | Entered into a Securities Purchase Agreement for a Convertible Promissory Note in the principal amount of $20,000. |
| 2025-06-23 | Entered into a Securities Purchase Agreement for a Convertible Promissory Note in the principal amount of $30,000. |
| 2025-07-01 | Due date for Convertible Promissory Note from April 24, 2025. |
| 2025-10-30 | Due date for Convertible Promissory Note from February 3, 2025. |
| 2025-11-01 | Institutional investor agreed to forbear until this date. |
| 2025-11-30 | End of the current reporting period for the Quarterly Report. |
| 2025-12-30 | Entered into a forbearance agreement with an institutional investor relating to the Senior Secured Note. |
| 2025-12-31 | Due date for Convertible Promissory Note from June 23, 2025; also issued 28,571,429 shares from loan conversion for $8,000. |
| 2026-01-02 | Issued 29,000,000 shares from loan conversion for $8,120. |
| 2026-01-05 | Issued 60,000,000 shares from loan conversion for $16,800. |
| 2026-01-12 | Date registrant had 870,768,095 shares of Common Stock outstanding. |
| 2026-01-14 | Date of filing and certifications for the Quarterly Report. |
| 2026-02-01 | Institutional investor agreed to forbear until this date. |
Recommendation
strong sellThe company is in severe financial distress, evidenced by critically low cash reserves ($7,703), a substantial increase in net loss, and an explicit 'going concern' warning from management and auditors. It generates no revenue and relies entirely on dilutive financing, with significant operational expenses and no clear path to profitability. The ongoing conversion of debt into equity is causing massive dilution for existing shareholders. The high risk of failure to raise necessary capital makes the stock a speculative and highly risky investment with a strong likelihood of further value erosion.
Keywords
Biopharmaceutical, Oncology, Colorectal Cancer, RCC-33, Pre-clinical stage, SEC 10-Q, Quarterly Report, Going Concern, Net Loss, Cash Flow, Convertible Debt, Capital Raise, Drug Development, Clinical Trials
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