Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________

FORM 10-Q

_______________

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

For the quarterly period ended November 30, 2017May 31, 2022

OR

o☐ 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: 333-192759000-52403

CANNABICSCNBX PHARMACEUTICALS INC.

(Exact name of registrant as specified in its charter)

(877)424-2429

 (Registrant’s(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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 issuerregistrant 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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post 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,” “accelerated filer”, “smaller reporting company”,company," and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)Act:

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(as defined in Rule 12b-2 of the Exchange Act.Act). Yes ☐  No  ☒

As of JanuaryJuly 14,^th, 2018, 2022, the registrant had 119,564,8401,257,927 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 subsidiaries, G.R.I.N Ultra Ltd., and Digestix Bioscience Inc.

CANNABICS

CNBX PHARMACEUTICALS INC.

FORM 10-Q

NOVEMBER 30, 2017MAY 31ST, 2022

INDEX

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:

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, 2021, 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

CANNABICSCNBX PHARMACEUTICALS INC.

Consolidated Balance Sheets

See accompanying notes to consolidated financial statements.

CANNABICS

CNBX PHARMACEUTICALS INC.

Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

*       Adjusted post-split 1:120

See accompanying notes to consolidated financial statements.

CANNABICS

CNBX PHARMACEUTICALS INC.

Consolidated Statements of Stockholders' Equity (Deficit)

*       Adjusted post-split 1:120

CNBX PHARMACEUTICALS INC.

Consolidated Statements of Stockholders' Equity (Deficit)

(continued)

See accompanying notes to consolidated financial statements.

CNBX PHARMACEUTICALS INC.

Consolidated Statements of Cash Flows

(Unaudited)

See accompanying notes to consolidated financial statements.

CANNABICS

CNBX PHARMACEUTICALS INC.

Notes to Consolidated Financial Statements (unaudited)

(Unaudited)

Note 1–Nature of Business, Presentation and Going Concern

Organization

CannabicsCNBX Pharmaceuticals Inc. (the "Company"“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, 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 CannabicsCNBX Pharmaceuticals Inc., at which time The Company’s principal offices are in Bethesda, Maryland. The Company changed its course of business became pharmaceuticalto laboratory research and development.

On July 31,June 19, 2014, CannabicsFINRA 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. filed its exclusive Patent Applicationwas merged with and into the Registrant, with the US Patent & Trademark Office (USPTO), which coversRegistrant being the proprietary technology developed by its team of experts in the field of cannabinoid long acting lipid based formulations. This patent is the basis for the company’s “CANNABICS SR” technology, which consistssurviving entity. The Merger was completed under Section 92A.180 of the IP for standardizedNevada Revised Statutes, Chapter 92A, as amended, and long acting medical cannabis capsules, designed for patients suffering from diverse indications. Simultaneously this Patent was filed withas such, does not require the PCT divisionapproval of the Israeli Patent Office (ILPO) in order to provide International IP protection. On February 24, 2016 Cannabics pharmaceuticals filed a new patent application forstockholders of either the company’s slow release capsulesRegistrant 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 provideswill provide research and development activities for the Company’s products in Israel.

On February 24, 2016, the Company filed a new patent application for the company’s slow release medical capsules with the US Patent & Trademark Office, as noted in their Press Release of that date.

On March 22, 2016, the Company announced the start of a regulated Clinical Study for Cancer Patients in Israel under the auspices of the Rambam Medical Center and the Ministry of Health. This clinical study involves patients with advanced cancer and cancer anorexia cachexia syndrome (CACS), endpoints examined are weight gain appetite, quality of life and a marker for anti-cancer activity. Quality of life in patients with CACS is directly related to loss of appetite and loss of weight. This study examines the influence of Cannabics Pharmaceuticals SR capsules on both of these common effects of cancer and cancer treatment. Secondary outcome measures are improvement in appetite, reduction in TNF-alpha level, safety assessment for early psychiatric side-effects, quality of life and evaluation of muscle strength. While this study is taking place in Israel, it is fully registered with the US NIH under"Cannabics Capsules as Treatment to Improve Cancer Related CACS in Advanced Cancer Patients", Identifier NCT02359123, and may be found at https://clinicaltrials.gov/ct2/show/NCT02359123

On June 6^th, 2016 the Company filed a PCT Application with the US Patent & Trademark Office (USPTO) entitled a "System and Method for High Throughput Screening of Cancer Cells". Cannabics Pharmaceuticals has developed a proprietary high throughput screening process which is designed to generate mega-data of specific cannabinoids and cannabinoid formulations with antitumor properties. In this proprietary process biopsies and live cancer cells lines are treated, In vitro, with innumerous combinations of cannabinoids and the resulting antitumor effects are screened, categorized and actually visually displayed.

On December 1, 2016, the Company announced the results from its Cancer HTS research which indicate that specific ratios of Cannabinoids led to Apoptosis in MDA-MB-231 Breast Cancer cell viability.

On January 3, 2017, the Company announced development of its 5mg THC Capsule intended for naïve patients who have not tried cannabis in the past. The Cannabics 5mg THC capsule is currently being evaluated by the company in its clinical study of palliative treatment, which is conducted by the Oncology Department at the prestigious Rambam Medical Center in northern Israel and under strict regulations of the Ministry of Health, by whom Cannabics Pharmaceuticals has been licensed since 2014.

On June 30^th, 2017, the Company announced positive results from its necrosis screening of Circulating Tumor Cells (CTC) from colon, breast, and prostate cancer patients treated with specific cannabinoids, adding to its data base of personalized anti-tumor treatment.

On July 12^th, 2017, the Company announced its formal execution of a Testing & Diagnostics Services Agreement with SIMFO GmbH, a renown German research laboratory which is collaborative in nature. Under the Agreement, the Company is the exclusive global provider of SIMFO’s CTC diagnostics to cancer patients treated with natural cannabinoids. SIMFO GmbH will obtain the CTC count as well as drug sensitivity tests from treated patients according to the specific cannabinoids which the Company shall request.

On July 24,^th, 2017, the Company announced its establishment of a Geneticsgenetics laboratory to develop diagnostic tools based on human genome, tumor genetics and specific cannabinoids. The Company enlisted Dr. Moran Grinberg as its VP of R&D to lead the genetic research. Dr. Grinberg has a PhD in Virology & MSc in clinical pharmacology with managerial experience in executing pharmacological research.

On August 2820^th, 2017,2020, the Company announced it receivedthe creation of a very positive preliminary international patentability reportnew Division for its Anti-Tumor drug candidate RCC-33, for the treatment of colorectal cancer. The emanates from the PCT authorities regarding its patent application relatingCompany’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 personalized screeningschedule a Pre IND-Meeting with the US FDA.

On October 18^th, 2021, 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.

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

On May 10, 2022, the Company filed a certificate of necrotic cancer cells throughchange (the “Certificate”) with the Secretary of State of the State of Nevada. Pursuant to the Certificate, the Company effectuated a High Throughput Screening System (HTS), finding all claims “innovativeone-for-one hundred twenty (1:120) reverse split of the issued and inventive”. This PCT report is significant as it securesoutstanding shares of common stock of the Company’s expanding proprietary IP rights.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, 20172021 annual financial statements included in our Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on December 13, 2017.November 29th, 2021.

Principles of Consolidation

The consolidated financial statements include the accounts of Cannabics Pharmaceuticals Inc.the Company and its wholly-owned subsidiary, G.R.I.N.subsidiaries GRIN Ultra Ltd.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. TheWhile the Company has incurred a net loss of $537,504$3,243,543 for the threenine months ended November 30, 2017, andMay 31st, 2022, it has incurred cumulative losses since inception of $4,057,664.$20,069,261. 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.

Use of Estimates

The preparation of the interim financial statements in conformity with accounting principles generally accepted in the United States requires management to make 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 and the reported amounts or revenues and expenses during the reporting period. Actual results could differ from those estimates.

Unaudited Interim Financial Statements

The interim financial statements of the Company as of September 30, 2017, and for the periods then ended are unaudited. However, in the opinion of management, the interim financial statements include all adjustments, consisting of only normal recurring adjustments, necessary to present fairly the Company’s financial position as of September 30, 2017, and the results of its operations and its cash flows for the periods ended September 30, 2017. These results are not necessarily indicative of the results expected for the calendar year ending December 31, 2017. The accompanying financial statements and notes thereto do not reflect all disclosures required under accounting principles generally accepted in the United States. Refer to the Company’s audited financial statements as of December 31, 2016, filed with the SEC, for additional information, including significant accounting policies.

Research and Development Costs

The Company accounts for research and development costs in accordance with ASCAccounting 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 $212,308$1,019,682 and $22,133$1,300,530 for the threenine months ended November 30, 2017May 31st, 2022 and 2016,2021, 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

During the threenine months ending November 30, 2017,May 31st, 2022, the Company paid $125,000$264,061 in salaries, including socials benefits, to 2 directors.

Comparingtwo directors, compared to $31,400 in$336,137 for the threenine months ending November 30, 2016.May 31, 2021.

The Company had a balance outstanding at November 30, 2017May 31st, 2022 and at May 31, 2021 of $224,298 comparing to $246,239 in November 30, 2016,$223,645, payable to Cannabics, Inc. The advance is due on demand and bears no interest.

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$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.

Common Stock

On September 1^st, 2017, the Company issued 20,000 shares of its common stock to a consultant for services.

The fair value was determined based on the current market price per share on the date of issuance at a price of $1.04.

Note 4 – Commitments and Contingencies

Effective January 4^th, 2017,

We lease the Company entered into a six-month operating lease for its research and development activities in Tel Aviv, Israel, with a six months extension option, on May 22^nd, 2017. The Company exercised the lease option for an additional six months.

Effective July 7^th, 2017, the Company entered into a six-month operating lease for its research and development activities in Tel Aviv, Israel. with a six months extension option.

Effective January 9th, 2018, the Company entered into a 24-month operating lease for its lab activitiesproperty of our laboratory in Rehovot, Israel, withthe monthly lease is $6,500 per month. Our current lease terminates at the end of February 2024, though we have a 24 months extension option.two additional one-year option, which management intends to execute prior to that time.

. 

As security for its obligation under a property lease agreement, car lease and credit cards, the Company’s subsidiary provided a bank guarantee in the amount of $50,000.

Note 5 – Subsequent EventsMajor events during the nine months ended on May 31st, 2022

On September 6February 4^th, 2017,2022, the Company filed a Pre-14C Information Statement with the SEC.

On February 15^th, 2022, the Company filed its Definitive 14-C Information Statement with the SEC.

On February 17^th, 2022, the Company filed an 8K with the SEC relating to a Forbearance Agreement with an institutional investor.

On February 18^th, 2022, the Company filed an S-1 Registration Statement with the SEC.

On March 16^th, 2022, the Company received $240,000 loan, bearing a $40,000 interest.

The entire unpaid Principal and interest, shall be due and payable at any time, or from time to time, from and after the earlier to occur (I) May 16, 2022, and (II) the initial date after the date hereof of a public or private offering of any securities. Any amount of principal or other amounts due under the Loan which is not paid when due (a “Payment Default”) shall result in a late charge being incurred and payable by the Maker in an amount equal to interest on such amount at the rate of fifteen percent (15%) per annum.

On May 5^th, 2022, the Company announced its filinga grant of an extensive provisionalPatent by the government of Hong Kong for it’s patent application with the USPTO on an innovative new ““System and Method for Sensitivity Test of Cannabinoids on Patient-Derived Tumor Biopsies & CTCs” This proprietary technology pertains to a system for assessing the sensitivity of various cannabinoid-based treatment modalities on patient-derived primary tumor biopsies as well as blood Circulating Tumor Cells (CTCs).

On September 25^th, 2017, the Company announced its filing of “National Phase Applications” for its proprietary system and method of HighHight Throughput Screening (HTS) of cancer cells. The applications were filed in Europe, China, India, Brazil, Canada and Australia. The proprietary technology patented relates to novel means of personalizing cannabis based treatments of cancer utilizing high throughput screening of biopsies and cell lines treated with pure or crude extracts.

On November 8^th, 2017, the Company announced its Patent Application with the USPTO for “Cannabinoid Modulation for the Microbiome”. This pioneering patent is based on profiling and modulating patient-derived microbiota, securing the ongoing proprietary data on the use of cannabinoid products for adjusting the varied microbial populations which live on and in the body, making personalized medicine much more specific.

On November 13^th,2017, Eyal Barad was named as a 3^rd Director and COO,Cancer Cells, as noted in the 8-Kour Press Release of that date.

On November 13May 10^th, 2017,2022, the Company announced that it had dismissed its previous Auditorreceived final approval from Finra for a 1:120 reverse share split of the Company’s common stock, and had engaged Weinstein & Co,name change to the current “CNBX Pharmaceuticals Inc.”, as disclosednoted in the 8-K of8K filed with the SEC that date.day.

On December 19^th, 2017,During the nine months ended May 31, 2022, the Company issued 37,50020,027 shares of its common stock to an investor as a consultant for services.result of a convertible loan exercise in the sum of $225,228.

Note 6 – Subsequent Events

On December 14^th, 2017, GRIN Ultra Ltd.,June 15th, 2022, the R&D subsidiary of Cannabics Pharmaceuticals Inc., (“the Company”) executedcompany entered into a Sales, Support & MaintenanceSecurities Purchase Agreement with Rhenium Equipment for Research Labs Ltd., a premier Israeli Research & Diagnostic equipment supplier for acquisition of custom designed and fully automated CTC (Circulating Tumor Cells) and HTS (High Through Output Screening) machines, including a service agreementproviding for the next two years to service said equipment. The total cost of said agreement was $747,689.00, which was paid in full to Rhenium.

On January 3^rd, 2018, D-Beta One EQ, Ltd executed 500,000 option rights pursuant to the Subscription Agreement between the Companies of May 8th, 2017. Under the termsissuance of the Agreement, D-Beta One EQ, Ltd. was granted 1,500,000 Warrants for $2.00 per share, which is exercisable until May 7th, 2018. D-Beta One EQ, Ltd. exercised their option for 500,000 common shares at $2,00. Per share for aConvertible Promissory Note in the principal amount of $154,250.00. ($154,000 net investment of $1,000,000.00.issuance expenses) . The Convertible Promissory Note carry interest of 9% and due on June 15^th 2023.

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

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

We believe that it is important to communicate our future expectations to our security holders and to the public. This report, therefore, contains statements about future events and expectations which are “forward-looking statements” within the meaning of Sections 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934, including the statements about our plans, objectives, expectations and prospects under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You can expect to identify these statements by forward-looking words such as “may,” “might,” “could,” “would,” will,” “anticipate,” “believe,” “plan,” “estimate,” “project,” “expect,” “intend,” “seek” and other similar expressions. Any statement contained in this report that is not a statement of historical fact may be deemed to be a forward-looking statement. Although we believe that the plans, objectives, expectations and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements, and we can give no assurance that our plans, objectives, expectations and prospects will be achieved.

Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in the “Risk Factors” section of and elsewhere in our Annual Report on Form 10-K for the fiscal year ended August 31, 2015 and in our subsequent filings with the Securities and Exchange Commission.  The following discussion of our results of operations should be read together with our financial statements and related notes included elsewhere in this report.

Company Overview

Cannabics Pharmaceuticals Inc. (the "Company", “CNBX”, “we”, “us”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 “our”) was incorporated in Nevada on September 15, 2004, under"window of opportunity" at the name of Thrust Energy Corp.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 was originally engagedhopes to start first in human Phase I/II clinical trials in 2023. Neoadjuvant treatment is the exploration, exploitation, developmentadministration of a therapy before the surgical treatment to improve patient outcome, and productionour business strategy is to advance our programs through clinical studies including with partners, and to opportunistically add programs in areas of oil and gas projects within North America, but was unable to operate profitably.

In May 2011, the Company changed its name to American Mining Corporation, suspending its oil and gas operations and changing its business to toll milling and refining, mineral exploration and minehigh unmet medical needs through acquisition, collaboration, or internal development.

On April 25, 2014, the Company experienced a change in control. Cannabics, Inc. (“Cannabics”) acquired a majorityResults of the issued and outstanding common stock of the Company in accordance with stock purchase agreements by and between Cannabics and Thomas Mills (“Mills”). On the closing date, April 25, 2014, pursuant to the terms of the Stock Purchase Agreement, Cannabics purchased from Mills 20,500,000 shares of the Company’s outstanding restricted common stock for $198,000, representing 51%.Operations

Cannabics, Inc. is a US based company founded in 2012 by a group of researchers fromFor the fields of molecular biology, cancer researchThree Months Ended May 31st, 2022 and pharmacology.

On May 21, 2014, the Company changed its name, via merger in the state of Nevada, to Cannabics Pharmaceuticals Inc. The Company’s principle offices are in Bethesda, Maryland. At the same time the Company has changed its course of business to pharmaceutical research and development.

On June 3, 2014, the Company's Board of Directors declared a two-to-one forward stock split of all outstanding shares of common stock. The stock split was approved by FINRA on June 19, 2014. The effect of the stock split increased the number of shares of common stock outstanding from 40,880,203 to 81,760,406. All common share and per common share data in these financial statements and related notes hereto have been retroactively adjusted to account for the effect of the stock split for all periods presented prior to June 3^rd, 2014. The total number of authorized common shares and the par value thereof was not changed by the split.

On June 19, 2014, FINRA granted final approval of Change of Name & Ticker Symbol of the Corporation from American Mining Corporation to Cannabics Pharmaceuticals Inc., with the new Ticker Symbol of “CNBX”. Said approval was predicated upon Cannabics Pharmaceuticals Inc.’s filing of Articles of Merger with American Mining Corporation with the Nevada Secretary of State on May 21^st, 2014. Under the laws of the State of Nevada, Cannabics 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 Cannabics Pharmaceuticals Inc.

2021

On July 24, 2014, the Company executed a Collaboration & Exclusivity Agreement with Cannabics, Inc. (“Cannabics”), a Delaware corporation and largest shareholder of the Company. Per the terms of the Agreement, the Company issued 18,239,594 shares of its common stock to Cannabics, Inc. for $150,000 cash received.Operating Expenses

On July 31, 2014, Cannabics Pharmaceuticals Inc. filed its exclusive Patent Application withFor the US Patent & Trademark Office (USPTO), which covers the proprietary technology developed by its team of experts in the field of cannabinoid long acting lipid based formulations. This patent is the basisthree months ended May 31st, 2022, our total operating expenses were $635,006 compared to $676,252 for the company’s “CANNABICS SR” technology, which consiststhree months ended May 31, 2021, resulting in a decrease of the IP for standardized$41,246. The decrease is attributable to a total increase of $260,535 in general administration, and long acting medical cannabis capsules, designed for patients suffering from diverse indications. Simultaneously this Patent was filed with the PCT divisionsales and marketing expenses and a decrease of the Israeli Patent Office (ILPO)$301,781 in order to provide International IP protection. On February 24, 2016 Cannabics pharmaceuticals filed a new and comprehensive patent application for the company’s slow release capsules

On August 25, 2014, Cannabics Pharmaceuticals Inc. incorporated a wholly owned subsidiary in Israel, named “G.R.I.N Ultra Ltd.”, dedicated to the advanced research and development in the company’s research laboratory in Caesarea, Israel.expenses.

On October 20, 2014, Cannabics Pharmaceuticals Inc. received Government Certification from the MinistryWe realized financial loss of Health in Israel$46,646 for the establishmentthree months ended May 31st, 2022, compared to incurring financial loss of $647,532 for the three months ended May 31, 2021. The decrease in financial expense was mainly attributable to a convertible loan valuation expense of $612,421. As a result, the net loss was $681,652 for the three months ended May 31st, 2022, compared to a net loss of $1,323,775 for the three months ended May 31, 2021.

Net Loss

Net loss was $681,652 compared to net loss $1,323,775 for the three months ended May 31st, 2022, for the reasons noted supra.

For the nine Months Ended May 31st, 2022 and 2021

Operating Expenses

For the nine months ended May 31st, 2022, our total operating expenses were $2,475,617 compared to $2,003,853 for the nine months ended May 31, 2021, resulting in an advanced R&D laboratory dedicatedincrease of $471,764. The increase is attributable to medicala total increase of $752,613 in general administration, and sales and marketing expenses mostly due to share based payment of $ 635,587 and partially offset by an decrease of $280,848 in research and development of cannabinoid-based therapies. R&D is conducted to date in Israel and has resulted in an IP portfolio that includes proprietary formulation methods of cannabinoid extracts that enable a sustained release PK profile of the active ingredients upon oral administration. Our first technology is “Cannabics SR” - a standardized, high bioavailability, sustained release medical cannabis capsule that is based on cannabinoid extracts from selected strains of medical cannabis.  The Cannabics SR proprietary formulation was shown to provide a steady state level of beneficial therapeutic effects within the therapeutic window for 10-12 hours. In Israel, numerous patients (most of them oncology patients) have already been treated with Cannabics SR capsules; with both patients and doctors reporting high levels of satisfaction from the uniformity and long lasting therapeutic effects of this unique medical technology.expenses.

On November 4, 2014, Cannabics Pharmaceuticals Inc. executed an IP Licensing and Collaboration Agreement with Kalapa Holdings (Spain)We realized financial loss of $767,926 for the production and distributionnine months ended May 31st, 2022, compared to financial loss of the Company’s CANNABICS SR medical capsules. The IP Licensing Agreement allows$705,412 for the Company’s advanced cannabinoid administration technologynine months ended May 31, 2021. The increase in financial expense was mainly attributable to be manufacturedexchange differences in total of $48,484 and distributed in Spain, exclusively through Kalapa Holdings and its subsidiaries in strict compliance with Spanish law and regulationsa convertible loan valuation expenses of $718,392, As a result, the net loss was $3,243,543 for the nine months ended May 31st, 2022, compared to certified patients.a net loss of $2,513,297 for the three months ended May 31, 2021.

On December 18, 2014, Cannabics Pharmaceuticals Inc. executed a letterNet loss

Net loss was $3,243,543 compared to net income of engagement with Mountain High Products in Colorado,$2,513,297 for the manufacturingnine months ended May 31st, 2022 and distribution of Cannabics SR technology in the Colorado market. Cannabics SR medical cannabis technology will be utilized by Mountain High Products in strict compliance with Colorado laws and regulations of "Cannabis Infused Edible Products" and distributed to certified dispensaries through Mountain High's existing distribution channels.

On January 29, 2015, the Company executed an Agreement with Rambam Medical Center (Israel) to undertake a controlled pilot study utilizing Cannabics SR Capsules as palliative treatment to improve cancer related Cachexia and Anorexia Syndrome in advanced stage cancer patients. Rambam is a world renowned academic hospital acknowledged for their cutting-edge research projects and integration of innovative new therapies and treatments to over 2 million residents of Northern Israel. You can view the details of this ongoing study from the NIH website at http://www.cancer.gov/clinicaltrials/search/view?cdrid=769090&version=HealthProfessional&protocolsearchid=12509449

On February 15, 2015, the Company executed of a Research Agreement with the Technion Research & Development Foundation Ltd (Israel) to undertake a Research Project entitled "The Assessment of the Antitumor Activity of the Whole Cannabis Plant Extract, Components and Derivatives Thereof". Under the terms of the Agreement, Cannabics Pharmaceuticals will collaborate with the Technion’s Laboratory of Cancer Biology and Cannabinoid Research. The purpose of this Research is to develop a diagnostic and therapeutic system to harness the anti-cancer properties of active cannabis-based ingredients. The study will screen and evaluate different types of human cancer cells treated with a multitude of cannabinoid combinations and observe and catalogue the effects thereof. Technion is consistently ranked among the world’s top science and Technology Research Universities. The Faculty of Biology is comprised of 23 independent research groups, focusing on a variety of aspects of Cellular, Molecular and Developmental Biology. The faculty has extensive collaborations with the pharmaceutical and biotechnology industries.

On May 27, 2015, the Company filed a Patent with the USPTO entitled “A Method of in Vitro High Throughput Screening of Cancer Biopsies with Cannabinoid Extracts”. In essence, this patent takes the next step from the cancer cell knowledge already obtained from cell lines in the Technion Laboratory and extends it to a system of analyzing cancer cells taken from patient biopsies, and then testing them against a multitude of cannabinoid combinations for anti-tumor activity via the High Throughput Screening process. This patent formally begins the next phase of the Company, which is Personalized Medicine (PM). We have developed an automated high-throughput method31, 2021, for the screening of different types of cancer cells or biopsies treated with a multitude of cannabis extracts. These natural extracts could also be tested in conjunction with already approved and common synthetic drugs for patients that undergo chemotherapy for the most personally tailored therapy. This multilayer method is producing a large-scale database that will capture the knowledge gained as to the unique effects of different combinations of cannabinoid compounds on diverse malignancies. Coextensive with the development of the automated high-throughput system, we are also developing proprietary and novel compounds targeting diverse and specific types of tumors.

On January 25, 2016, the Company executed an exclusive IP Licensing Agreement with Mountain High Products LLC and the Cima Group LLC for the production and distribution of the Company’s CANNABICS SR technology of medical cannabis capsules in Colorado. And with, Cima Group LLC which is a related party to Mountain High Products LLC and is charged with their operations in states outside of Colorado.

On February 24, 2016, the Company filed a new patent application for the company’s slow release medical capsules with the US Patent & Trademark Office, as noted in their Press Release of that date.

On March 22, 2016, the Company announced the start of a regulated Clinical Study for Cancer Patients in Israel under the auspices of the Rambam Medical Center and the Ministry of Health. This clinical study involves patients with advanced cancer and cancer anorexia cachexia syndrome (CACS), endpoints examined are weight gain appetite, quality of life and a marker for anti-cancer activity. Quality of life in patients with CACS is directly related to loss of appetite and loss of weight. This study examines the influence of Cannabics Pharmaceuticals SR capsules on both of these common effects of cancer and cancer treatment. Secondary outcome measures are improvement in appetite, reduction in TNF-alpha level, safety assessment for early psychiatric side-effects, quality of life and evaluation of muscle strength. While this study is taking place in Israel, it is fully registered with the US NIH underreasons explained "Cannabics Capsules as Treatment to Improve Cancer Related CACS in Advanced Cancer Patients",supra Identifier NCT02359123, and may be found at https://clinicaltrials.gov/ct2/show/NCT02359123.

On June 6, 2016, the Company filed a PCT Application with the US Patent & Trademark Office (USPTO) entitled a "System and Method for High Throughput Screening of Cancer Cells". Cannabics Pharmaceuticals has developed a proprietary high throughput screening process which is designed to generate mega-data of specific cannabinoids and cannabinoid formulations with antitumor properties. In this proprietary process biopsies and live cancer cells lines are treated, In vitro, with innumerous combinations of cannabinoids and the resulting antitumor effects are screened, categorized and actually visually displayed.

On December 1, 2016, the Company announced the results from its Cancer HTS research which indicate that specific ratios of Cannabinoids led to Apoptosis in MDA-MB-231 Breast Cancer cell viability.

On January 3, 2017, the Company announced development of its 5mg THC Capsule intended for naïve patients who have not tried cannabis in the past. The Cannabics 5mg THC capsule is currently being evaluated by the company in its clinical study of palliative treatment, which is conducted by the Oncology Department at the prestigious Rambam Medical Center in northern Israel and under strict regulations of the Ministry of Health, by whom Cannabics Pharmaceuticals has been licensed since 2014.

On July 6^th, 2017, the Company executed a Testing & Diagnostics Services Agreement with SIMFO GmbH, a renown German research laboratory which is collaborative in nature. SIMFO GmbH will obtain the CTC count as well as drug sensitivity tests from treaded patients according to the specific cannabinoids which the Company shall request.

On July 24^th, 2017, the Company announced its establishment of a Genetics laboratory to develop diagnostic tools based on human genome, tumor genetics and specific cannabinoids. The Company enlisted Dr. Moran Grinberg as its VP of R&D to lead the genetic research. Dr. Grinberg has a PhD in Virology & MSc in clinical pharmacology with managerial experience in executing pharmacological research.

On August 28^th, 2017, the Company announced it received a very positive preliminary international patentability report from the PCT authorities regarding its patent application relating to personalized screening of necrotic cancer cells through a High Throughput Screening System (HTS), finding all claims “innovative and inventive”. This PCT report is significant as it secures the Company’s expanding proprietary IP rights.

On September 6^th, 2017, the Company announced its filing of an extensive provisional patent application with the USPTO on an innovative new “Method for Sensitivity Test of Cannabinoids on Patient-Derived Tumor Biopsies & CTCs” This proprietary technology pertains to a system for assessing the sensitivity of various cannabinoid-based treatment modalities on patient-derived primary tumor biopsies as well as blood Circulating Tumor Cells (CTCs).

On September 25^th, 2017, the Company announced its filing of “National Phase Applications” for its proprietary system and method of High Throughput Screening (HTS) of cancer cells. The applications were filed in Europe, China, India, Brazil, Canada and Australia. The proprietary technology patented relates to novel means of personalizing cannabis based treatments of cancer utilizing high throughput screening of biopsies and cell lines treated with pure or crude extracts.

On November 8^th, 2017, the Company announced its Patent Application with the USPTO for “Cannabinoid Modulation for the Microbiome”. This pioneering patent is based on profiling and modulating patient-derived microbiota, securing the ongoing proprietary data on the use of cannabinoid products for adjusting the varied microbial populations which live on and in the body, making personalized medicine much more specific.

On November 13^th,2017, Eyal Barad was named as a 3^rd Director and COO, as noted in the 8-K of that date.

On November 13^th, 2017, the Company announced that it had dismissed its previous Auditor and had engaged Weinstein & Co, as disclosed in the 8K of that date.

On December 19^th, 2017, the Company issued 37,500 shares of its common stock to a consultant for services.

On December 14^th, 2017, GRIN Ultra Ltd., the R&D subsidiary of Cannabics Pharmaceuticals Inc., (“the Company”) executed a Sales, Support & Maintenance Agreement with Rhenium Equipment for Research Labs Ltd., a premier Israeli Research & Diagnostic equipment supplier for acquisition of custom designed and fully automated CTC (Circulating Tumor Cells) and HTS (High Through Output Screening) machines, including a service agreement for the next two years to service said equipment. The total cost of said agreement was $747,689.00, which was paid in full to Rhenium.

On January 3^rd, 2018, D-Beta One EQ, Ltd executed 500,000 option rights pursuant to the Subscription Agreement between the Companies of May 8th, 2017. Under the terms of the Agreement, D-Beta One EQ, Ltd. was granted 1,500,000 Warrants for $2.00 per share, which is exercisable until May 7th, 2018. D-Beta One EQ, Ltd. exercised their option for 500,000 common shares at $2,00. Per share for a net investment of $1,000,000.00.

Plan of Operation

Cannabics Pharmaceuticals Inc. is dedicated to the development of cannabinoid medicine and screening for cancer patients. The Company’s R&D is focused on the three aspects of cancer treatment – diagnostics, and antitumor medicine and palliative medicine. Cannabics’ vision is to create personalized natural medicine tailored to specific types of cancers and genetics of patients utilizing novel biotechnological tools. The Company’s Intellectual Property surpasses proprietary capsulated formulations designated for specific cancer related indications, diagnostic procedures and data.

The parent Company Cannabics, Inc. was founded by a group of Israeli researchers from the fields of cancer research, pharmacology and molecular biology in 2012. The company’s Research is located in Israel, which has allowed for the use of medical cannabis since the 1990s, and has a favorable regulatory attitude towards the conducting of Cannabis based clinical studies in Israeli hospitals, in marked contrast to the legal situation in the United States where clinical research on medical cannabis is still illegal. This structure is an extraordinary corporate advantage, and markedly separates the company from similarly minded companies.

The number of people licensed to receive medical cannabis treatment in Israel numbers around 20,000 - in comparison to over 1,000,000 in the United States. Therefore, while the Israeli market potential is regarded as limited, the ability to perform standardized clinical studies and use the Israeli regulation to prove the effectiveness of the company’s products is proving to be highly advantageous.

Most importantly, while the U.S. FDA has barely approved even basic private research relating to cannabis, the regulatory environment is quite different in Israel. Within the Israeli Ministry of Health, there is a stand-alone agency, the Israeli Medical Cannabis Agency, (IMCA), which on October 26, 2014, granted Cannabics Pharmaceuticals an exclusive government License to launch our scientific program.

Through the large body of research that has been conducted by its scientists and affiliated partners, the Company has been able to gain in-depth knowledge of the various therapeutic effects of cannabinoids and identify patterns of cannabinoid ratios that bear the potential of treating various types of cancers. The Company is currently in the midst of several collaborative programs with several leading academic research and medical centers in Israel in order to further establish the beneficial therapeutic effects of its proprietary compounds, and to refine its development of personalized anticancer medicine.

The Company’s three main areas of scientific research are comprised within:

Cancer Diagnostics

Utilizing novel biological screening technologies, we monitor the antitumor effects of arrays of botanical extracts on cell lines and biopsies. The data collected propels the development of proprietary and novel compounds targeted to diverse types of tumors. This technology enables us to perform lab tests that offer doctors and their patients a profile of personalized treatment with cannabinoids. We believe that our personalized approach minimizes harmful side effects, with more successful outcomes and lower costs than the traditional “trial-and-error” approach to treatment. We are presently conducting diagnostic validation studies in collaboration with academic institutes and lab facilities, and expect to have preliminary results available by March 2018.

Anti-Cancer Treatments

We are developing botanical cannabinoid formulations based on our proprietary diagnostic procedures designated for the treatment of cancer and its side-effects. We are currently working in collaboration with SIMFO gmbh, a renown German research laboratory on CTC tests. We are also conducting preclinical research on the efficacy of our cannabinoid-based formulations in the treatment of cancer and expect to have preliminary results available by March 2018. If our diagnostic data cross-linked with clinical outcomes demonstrates that our formulations have therapeutic and commercial potential, we intend to submit an investigational new drug application with the U.S. Food and Drug Administration to commence clinical trials.

Palliative Therapies

We have developed our non-pharmaceutical capsules as a treatment to improve cancer related cachexia/anorexia syndrome (“CACS”) in advanced cancer patients. The main purpose in the treatment of patients with advanced cancer and CACS is to prolong life and to improve Quality of Life (“QoL”) as far as possible. We believe that QoL in patients with CACS is inversely related to reduced appetite and weight-loss. We are currently engaged in a clinical study in Israel to determine the efficacy of our proprietary capsules as a treatment to improve appetite and stem weight-loss associated with CACS in advanced cancer patients. We expect that preliminary results of our study will be available in July 2017.

CANNABICS 5MG capsules for Palliative care

While the medicinal effects of certain cannabinoids are well known to physicians, it is common knowledge that smoking is hazardous to health. Many physicians are perfectly aware of the palliative properties of cannabis (i.e antiemetic and analgesic), however they refrain from recommending or prescribing it to patients knowing that smoking the raw flowers is still the most common and available administration route. Hence the availability of an oral, standardized, reliable and clinically tested administration route of medical cannabis – no different from the administration route of most medications consumed by patients today - would dramatically improve the availability of medical cannabis therapy to patients in need.

Standardization and reproducibility

The efficacy of our Cannabics 5mg capsules is currently being evaluated in a study that is taking place in the Rambam Medical Center in Haifa, Israel, and it is fully registered with the US NIH under "Cannabics Capsules as Treatment to Improve Cancer Related CACS in Advanced Cancer Patients", Identifier NCT02359123, and may be found at https://clinicaltrials.gov/ct2/show/NCT02359123.

Diagnostics and Personalized medicine

Cannabinoids include phytocannabinoids, endogenous endocannabinoids, and synthetic cannabinoids. More than 60 phytocannabinoids have been identified within the Cannabis plant. Cannabinoids elicit their pharmacological activities through cannabinoid receptor type 1 (CB1) and type 2 (CB2), two G-protein coupled receptors (GPCR) in the endocannabinoid signaling pathway. Cancer is a disease in which alterations in the cannabinoid pathway have been demonstrated. Since this disease is found to be multifactorial, variations in expression of cannabinoid receptors could be harnessed to elicit a therapeutic effect. Therefore, a defined botanical extract may better achieve this therapeutic goal than a single synthetic compound, as the multiple components elicit a synergistic effect. Cannabinoids are not yet approved for the treatment of cancer, although their anti-tumor effects have been known for over 30 years. Scientific evidence exists which strongly suggest that cannabinoids may have anti-cancer activity. The exact mechanism by which this anti-tumor effect occurs may involve suppression of proliferative cell signaling pathways, inhibition of angiogenesis and cell migration and induction of apoptosis and/or induction of autophagy. Personalized Medicine (PM) is a novel approach that proposes the customization of therapy being tailored to the individual patient. There are over 200 different known cancers and the genetic divergence among humans makes it nearly impossible to find one remedy for a group of people. In view of the above, Cannabics utilizes High-throughput technologies to screen antitumor effects, mainly Apoptosis and Proliferation, on cell lines and biopsies treated with matrix of plant extracts differentiated in their ratios of active compounds. This diagnostic procedure can now offer doctors data on the potential antitumor activity of available cannabis products. The data unraveled in this procedure is also recruited in the creation of proprietary antitumor compounds.

Anti Tumor Medicine

To date Cannabics has gained valuable data on the anti-proliferative properties of cannabinoids on specific types of cancers and is currently engaging in preclinical studies which will translate into clinical studies that will evaluate proprietary cannabinoid compounds as anti-cancer treatments. All Cannabics formulations are pre-designed to fit the currently existing medical cannabis regulations in Israel, Europe and certain US States which are licensed as a “Medical Marijuana Infused Products Manufacturer” (i.e. §12-43.3-404 CRS). The ingredients used in the proprietary formulations are all certified food grade ingredients (recognized by the FDA as “G.R.A.S.” – Generally Regarded as Safe) and the formulation are free of any artificial additives or chemical substances. Thus, Cannabics medicines are fully compliant with the current cannabis infused edible product regulatory definition, which is in fact very similar to a regular food supplement regulatory definition.

The company’s business model is solely based on technology development and IP out-licensing to licensed and certified producers. The Company’s technologies are licensed to a strategic partner in compliance with each country’s and/or US state’s statutory regulations and exclusively to licensed and authorized medical cannabis local licensees that have adequate production and marketing capabilities. Cannabics Pharmaceuticals Inc. itselfdoes not manufacture, distribute, dispense or possess any controlled substances, including cannabis or cannabis based preparations, it merely licenses its IP. Within Israel, Europe and other territories outside the US, Cannabics Pharmaceuticals Inc. may employ a different business model through gaining adequate licenses under the appropriate regulations in each territory, all in full compliance with local rules and regulations in each country.

The Cannabis Cancer Market

According to a January, 2017, report by Grand View Research, Inc. titled “Medical Marijuana Market Analysis by Application and Segment Forecasts”, the global medical marijuana market size in 2015 was valued at $11.4 billion and the projected annual growth rate of 17 percent through 2025. According to this studycancer is the most rapidly increasing segment with cannabis application and has an annual growth of 18 percent expectancy through 2025. Contributing to this factor is the increasing number of states, districts, and territories in the US that are enacting laws to legalize medical marijuana which is supporting the patients demand for cancer treatment. The report indicated that marijuana has indicated cancer cell destroying capabilities. In the meantime, there is limited recorded success in the actual usage of cannabis in the treatment of cancer. The American Cancer Society has yet to take an official position on the use of cannabis for medical treatment although they readily acknowledge its efficiency in dealing with nausea and vomiting as side effects from chemotherapy. Cannabis is yet to be approved by the Federal Drug Administration (FDA) in the US for treatment of cancer which is what is obviously holding back the growth of this segment.

The growth in the number of cancer patients and increasing interest amongst physicians and researchers regarding the use of medical marijuana in cancer treatment are indicators that will lead to increased investment and applications in the medical cannabis market over the next decade. Cannabics Pharmaceuticals hopes to take advantage of these developments and trends to capitalize on our technology to bring forth cutting edge solutions for both research, diagnosis and drug efficacy data that will provide additional insight into personalized health care.

The Cancer Diagnosis Market

According to Grand View Research, Inc., the global cancer diagnostics market size was valued at USD 124.0 billion in 2016 and is expected to grow at an annual rate of over 7%. This market is expected to reach USD 232.7 billion by 2025 according to Orbis Research.

The growth in cancer cases, growing demand for effective diagnostic tools that develop from rising awareness, government support and technological developments are driving the demand for this increase worldwide.

Cancer is one of the leading causes of deaths worldwide which leads to efforts to develop accurate diagnostic tools and effective treatment solutions. Early monitoring and pre-detection are being focused on as this leads to improved success rate in treatment. This leads to public awareness and healthcare support programs that promote routine check-ups which enable diagnosing the disease before first symptoms may appear.

According to BCC Research, the global market for circulating tumor cell (CTC) technology reached nearly $2.8 billion in 2012 and $3.7 billion in 2013. This market is estimated to reach nearly $8.9 billion by 2018, demonstrating a compound annual growth rate (CAGR) of 18.9% for the five-year period, 2013 to 2018.

The major factors that affect the growth in this industry is due to increase advancements in biomedical imaging and bioengineering technology. Genomics development of methods that enhance detection, enumeration and analysis of CTC in patient samples will lead the estimated growth in the industry through to 2022.

The increasing adoption of personalized medicine and regular diagnostic tools creates the possibility of aggressively battling cancer in new and heretofore unthought of methods. This will create momentum and align interests to progress along these routes.

The growing demand for ongoing screening, diagnosis and monitoring throughout the different stages of the diseases development in order to assess the patient’s health will feed the growth of this sector in the coming years.

Company’s Perspective

Cannabics is a pioneer in the constellation of Cannabis Cancer and Diagnostics. Personalization of cannabinoid based treatments is the main scope of the company, addressing the rapidly growing unmet need of cancer patients who are prescribed with cannabis. The multifactorial benefits of cannabis create an arising need that may unravel a new attitude to cancer treatment and prevention. The palliative aspects of cannabis such as reducing pain and nausea, propel the market to create OTC and pharma grade cannabis products to cancer patients. With minor side effects andno toxicity, the only barrier to millions of cancer patients is worldwide regulation. Our vision is to harness the anti-tumor properties of cannabinoids administrated first as palliative treatment and tuned with a growing database to possibly serve as anti-cancer medicine itself. Creating the constellation of CTC HTS Genomic data ahead of any other competitor puts Cannabics in the forefront of treating cancer with cannabis and may serve a large portion of the cross-section of two markets – cannabis and cancer diagnostics. The still confining regulation creates an advantage for Cannabis which is licensed to do such research and clinical studies by the Israeli government.

RESEARCH AND DEVELOPMENT

Overview

Our vision is to reveal and personalize the potential of cannabis medicine to treat cancer itself, as well as side effects. We develop cancer diagnostics in conjunction with cannabinoid medicine, utilizing novel bio-technological tools, striving to prevent cancer onset in healthy adults and progression in patients.

We engage our research and development through our wholly owned Israeli subsidiary G.R.I.N Ultra. The company possesses a government License from the Health Ministry to perform research on cannabis, develop products and test them clinically. To date, we have been doing in-vitro studies and clinical studies cancer cell lines and cancer patients respectively.

The Science

Cancer and Cannabinoids:

Natural products have served as vital resources for cancer therapy (e.g.,Vinca alkaloids, paclitaxel, etc., which are used as conventional chemotherapeutic agents ) and are also sources for novel drugs. Natural products from plants therefore represent an excellent resource for targeted therapies, as phytochemicals and herbal mixtures act multi-specifically, i.e. they attack multiple targets at the same time. Furthermore, the problem of drug resistance may be approached by integrating phytochemicals and phyto-therapy into academic western medicine through derivation and integration of data and as adjunct to conventional treatments. The integration of phytochemicals and phyto-therapy into cancer medicine represents a valuable asset to chemically synthesized chemicals and therapeutic antibodies. Cannabinoids are very good candidates for this approach. Cannabinoids are a class of over 60 compounds derived from the plantcannabis sativa, as well as the synthetic or endogenous versions of these compounds. Cannabinoids show specific cytotoxicity against tumor cells, while protecting healthy tissue from apoptosis. These effects are exerted through cannabinoid receptors CB1 and CB2 in mammals and through non-receptor signaling pathways. Recent studies suggest that cannabinoids contribute to maintaining balance in cell proliferation and that targeting the endo-cannabinoid system can affect growth of several different types of cancer, including gliomas, breast, colon, prostate, and hepatocellular carcinoma.

These dual anti-proliferative and pro-apoptotic effects of cannabinoids and associated signaling pathways have been investigated on a large panel of cancer cell lines. Cannabinoids also display potent anticancer activity against tumor xenografts, including tumors that express high resistance to standard chemotherapeutics. Several other studies have investigated the possible synergistic effects of cannabinoids with standard oncology therapies, and are based on the pre-clinically confirmed concept of "cannabinoid sensitizers.”Cannabinoids have shown to enhance the efficacy of classical cytotoxic drugs at least in glioblastoma. However, additional studies are required to analyze the efficacy of these drug combinations in other cancer types as well as to identify additional cannabinoid-based drug combinations that could be useful for the treatment of cancer.

While many anecdotal reports by cancer patients using various formulations of Cannabinoids suggest significant efficacy, the lack of pure pharmacologically active compounds and legal restrictions have delayed the clinical research that will ultimately determine whether cannabinoids are effective in the treatment of cancer beyond their proven palliative effects. Thus, only few clinical trials have been conducted aiming to confirm the antineoplastic activity of cannabinoids. Further studies require extensive monitoring of the effects of cannabinoids alone or in combination with standard anticancer strategies. With such knowledge, cannabinoids could become a therapy of choice in contemporary oncology.

Furthermore, Additional basic research will help lead to the development of cannabinoid-based therapies for the treatment of aggressive cancers and will also bring us closer to understanding the novel CB1- and CB2-independent component of the cannabinoid system that controls cancer progression.

For example, date, there has only been one clinical trial looking at the anti-tumor activity of cannabinoids on terminal human patients harboring actively growing recurrent gliomas.

Additionally, there are various in vitro studies elucidating the potential mechanism of action of cannabinoids for urological cancers, along with population-based studies specific for testicular malignancies. However, until now, no clinical trials have been conducted for urological cancer patients (bladder, kidney, prostate and testicles).

In a third example a study demonstrated the bladder cancer cell lines are regulated by activation of CB receptors where CB1 receptor activation played a more prominent role in proliferation, while CB2 receptors were more effective in triggering the pro-inflammatory state. Further research and more studies are required to understand the expression of these receptors in different stages of bladder cancers and also the varying effect of endocannabinoid ligands on the different CB1 and CB2 receptors.

Cannabinoids could provide unquestionable advantages compared to other current anti-tumor therapies:

(1) Cannabinoids selectively affect tumor cells more than their non-transformed counterparts that might even be protected from cell death;

(2) Selective inhibitors of endocannabinoid degradation would be effective in those tissues where endo-cannabinoid levels are pathologically altered, without any significant psychotropic or immunosuppressive activity;

(3) Cannabinoids could represent an efficacious therapy in COX-2-expressing tumors that have become resistant to induction of apoptosis: acting as COX-2-substrates with no effect on the protective properties of COX-2-derived products, they could offer some advantage with respect to the NSAID in order to enhance the sensibility to conventional anticancer therapies

Personalized medicine:

Despite significant progress in cancer diagnostics and development of novel therapeutic regimens, successful treatment of advanced forms of cancer is still a challenge and may require personalized therapeutic approaches.

Advances in understanding many of the fundamental mechanisms of cancer progression have led to the development of molecular targeted therapies. While molecular targeted therapeutics continue to improve the outcome for cancer patients, tumor heterogeneity among patients, as well as intra-tumor heterogeneity, limits the efficacy of these drugs to specific patient subtypes, as well as contributing to relapse. Furthermore, Intra-tumor heterogeneity is caused by genomic instability in cancer cells, resulting in the selection of resistant clones, thus limits efficiency of cancer treatment. Thus, there is a need for a more personalized approach toward drug development and diagnosis that considers the diversity of cancerpatients, as well as the complex milieu of tumor cells within a single patient.

Personalized medicine refers to customization of treatment on the individual patient level, while Precision Medicine is a contemporary term that describes the utilization of molecular diagnostics to classify disease, and where possible, delivery of select treatment based on causal genetic variants. Current day molecular characterization of disease using next generation sequencing enables a sensitive and specific diagnosis established by genotype. Correlating essential genotype with disease-modifying genes, environmental influences, and individual polymorphisms may help explain variations in phenotype.

Precision cancer medicine relies on the possibility to match, in daily medical practice, detailed genomic profiles of a patient's disease with a portfolio of drugs targeted against tumor-specific alterations. Clinical blockade of oncogenes is effective but only transiently; an approach to monitor clonal evolution in patients and develop therapies that also evolve over time may result in improved therapeutic control and survival outcomes.

Drug Resistance:

Furthermore, a major issue in the treatment of patients suffering from cancer is the development of resistance to therapies. This ability of cancer to adapt to pharmacological pressures stems from the tumor heterogeneity. Tumor heterogeneity is the co-existence of cellular populations bearing different genetic or epigenetic alterations within the same lesion, or in different lesions of the same patient. Tumor evolution depicts changes in tumor heterogeneity along the temporal axis and describes the dynamics by which, under environmental pressure, sub-populations of cancer cells bearing selective advantages emerge instead of the others. This process appears to be particularly marked when cancer undergoes sudden selective pressures imposed by medical treatment

A major issue with targeted treatment therefore, is also early identification of patients with primary or secondary drug resistance.

Detection of Primary Tumor: Contemporary cancer therapy refers to treatment based on genetic abnormalities found in a patient's tumor. However, this approach is faced with numerous challenges, including tumor heterogeneity and molecular evolution, insufficient tumor samples available along with genetic information linking to clinical outcomes, lack of therapeutic drugs containing pharmaco-genomic information, and technical limitations of rapid drug efficacy tests with insufficient quantities of primary cancer cells from patients.

Our Research and Development

To address these problems and improve clinical outcomes we focus 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 oral and natural drugs for patients who do not respond to existing therapies or for whom these therapies bear undesirable side effects. We explore several formulations containing active compounds from the cannabis plant, including the psychoactive cannabinoid -THC and non-psychoactive cannabinoids - CBD, CBDA, THCA, THVC, CBN, CBG, CBGA and CBC. We recognize the potential therapeutic applications of the synergistic effects of these active compounds thus building the methodology and procedures that deciphers specific ratios of active compounds in regard to their antitumor activity. Following successful research and development, we intend to license cannabinoid-based products and treatments that will be standardized in composition, formulation and dose, administered by means of an appropriate and efficient delivery system, and tested in properly controlled pre-clinical and clinical studies.

HTS on cancer cell lines.

We have standardized the procedure of high through output screening (HTS) 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 of the most potent cannabinoid/natural extracts with/without the conjunction of standard chemotherapy.

Circulating tumor cells (CTCs):

Identifying Circulating Tumor Cells can be regarded as a “Liquid Biopsy of Cancer” method. CTCs can be useful for screening cancer drugs as they may reflect the severity and heterogeneity of primary tumors. CTCs are present in the blood of many patients with solid tumors. Most of these cells, which are thought to be involved in metastasis, die in the circulation, presumably due to the loss of matrix-derived survival signals or circulatory shear stress. The clinical value of CTCs as a biomarker for early cancer detection, diagnosis, prognosis, prediction, stratification, and pharmacodynamics have been widely explored in recent years. However, the clinical utility of current CTC tests is limited mainly due to methodological constraints.

A full cancer genome and transcriptome is present in each individual CTC therefore these cells represent an interesting source of tumor information where mutations and gene fusions can be found. Many studies have used enumeration of CTCs to predict recurrence or used cancer-derived biomarkers to follow therapy resistance.

CTC Testing and Cannabinoids

We are currently in a process of commercializing a diagnostic test which is based on liquid biopsies of patients suffering from epithelial cancers.

Two tests are available and complement each other:

1. Cell count - The test uses CTC technology that marks and counts cancer cells from the blood sample

2. cannabinoid sensitivity test. – The test counts number of live and dead cancer cells after been exposed to cannabinoid compounds such as THC or CBD and combinations

The results enable doctors to make better informed decisions by providing personalized patient data as supporting evidence to available medical treatments.

Personal effectiveness - checking the efficacy of dozens of cannabinoid compounds againstthe patient’s own tumor cells.

Genomics:

We are currently engaged in adding Next Generation Sequencing (NGS) technology to our lab which will enable us to search for tumor mutations that have emerged as potential predictive markers of targeted therapy outcome to better understand their real clinical utility in identifying subsets of patients most likely to benefit from the administration of cannabis therapy.

Unmet need: Personalized medicine holds great promise for cancer treatment, with the potential to address challenges associated with drug sensitivity, drug resistance and inter-patient variability.Therapy approaches have so far been based on the characterization for tumors mainly by means of in situ tissue analyses (depicting disease as the sum of molecular alterations of a particular lesion at a definite time point). Furthermore, tumor heterogeneity is likely to be underestimated and insufficiently captured with single tumor-biopsy analysis. Similarly, single biomarker-driven therapy may not be adequate, suggesting that targeting ubiquitous gene alterations may lead to better cancer control and patient outcomes.

However, despite the vast knowledge gathering regarding tumor dynamics and genomics, still there exists the problem of tumor heterogeneity, as mentioned before,tumor heterogeneity among patients, as well as intra-tumor heterogeneity,variability among patients, and along the course for disease progression, challenges chemotherapy due to genetically and phenotypically different cell subpopulations and usually leads to drug-resistance by refractory tumors.

Additionally, despite the solid scientific evidences that cannabinoids exhibit a remarkable anticancer activity in preclinical models of cancer, the use of cannabis-based medicines in the clinical practice is restricted to palliative uses in a few diseases. Preclinical data accumulated during the last decade has stimulated the interest in developing additional clinical studies aimed at investigating the potential therapeutic value of these compounds in different diseases and specifically their potential as anticancer agents, however the number of active clinical trials is still very low.

Furthermore, although cannabis extracts are purely natural and could be administered to patients with no regulatory procedures currently, there is no conclusive evidence to support patient claims for starting on cannabinoid monotherapy (or combined therapy) for anticancer benefit even when all other avenues for therapy have failed.

There is still a long felt unmet need to provide a system and method for selecting appropriate cannabis based therapy grounded in evidence based medicine.

The Palliative side of Cannabis:

Therapeutic Potential of Cannabinoid for CACS

Cannabis has long been suggested to stimulate appetite, decrease nausea and vomiting, and improve quality of life in cancer patients. Studies on the efficacy of cannabis for improving CACS and S-NIS have had mixed results. After trials showing improvement in weight gain among AIDS patients, cannabinoids were tested on cancer patients as well. In a controlled, random study comparing dronabinol to a placebo among cancer patients, dronabinol was associated with increased appetite in 38% vs 8% for placebo, and decreased nausea in 20% vs 7%, using acceptable measurement scales. Of the dronabinol patients, 22% gained ≥2 kg, compared with 10.5% of placebo recipients, but this datum did not reach significance, perhaps due to the advanced stage of cancer and the high mortality in both placebo and experimental group.

Another randomized study compared dronabinol to megestrol acetate or both treatments together. The research included 469 advanced cancer patients who had been suffering from a substantial appetite loss. A greater percentage of megestrol acetate-treated patients reported appetite improvement compared with dronabinol-treated patients, 75% vs 49% (p=0.0001). Combination treatment resulted in no significant differences compared with megestrol acetate alone. Another study, which included 243 patients, compared the administration of a combination of tetrahydrocannabinol and cannabinol to tetrahydrocannabinol alone, compared to placebo. It should be noted that cannabinoid dosages in the study were low, even in comparison to other studies. No significant differences between the groups were seen regarding improvement in appetite or weight-gain. In these two studies, no substantial side effects of cannabis products were found compared to the other arms. This may be related to the dosages of the drugs given.

A more recent study demonstrated improved chemosensory perception, appetite, sleep, and macronutrient preference in advanced cancer patients. However, the study included less than 50 patients. This research showed improvement in taste and smell perception in patients receiving chemotherapy, as well as appetite and caloric intake in the arm that received dronabinol compared to placebo.

Anti-Inflammatory Properties of Cannabis

Over 50 compounds have been isolated from cannabis. Generally, cannabinoids refer to compounds that activate CB1 and CB2 or have structures similar to delta-9-tetrahydrocannabinol (THC). THC has been found to reduce inflammation in chronic inflammatory diseases, such as atherosclerosis and rheumatoid arthritis. Cannabidiol (CBD), the most abundant non-psychoactive cannabinoid, has also been studied for its anti-inflammatory properties. In synovial cells isolated from mice, CBD suppressed release of TNF-alpha. Cannaflavin A is 30x more potent than aspirin as an inhibitor of prostaglandin E2. There is some evidence that PGE2 is involved in cachexia, and the reduction of prostaglandin E2 via inhibition of COX-2 has been shown to improve lean muscle mass. Beta-caryophyllene and luteolin are two non-psychoactive, anti-inflammatory compounds found in cannabis and in other plants. Beta caryophyllene binds to CB2 and inhibits TNF alpha and IL-1b expression in human peripheral blood. Luteolin, a flavonoid found in celery and green pepper, has been found to suppress the production of TNFa, IL-1b, and IL-6 when added to peripheral blood mononuclear cells in vitro.

Clinical Study

Our clinical study is led by Professor Gil Bar-Sela, the Deputy Director of the Division of Oncology at Rambam Health Care Campus, Head of the Palliative and Supportive Oncology Unit, and Head of the service for melanoma and sarcoma patients. The main purpose in the treatment of patients with advanced cancer and CACS is to prolong life and to improve quality of life (QoL) as far as possible. QoL in patients with CACS is directly related to loss of appetite and loss of weight.

The science:

Cachexia

Cachexia originates from Greek and Latin roots: Kakos- (bad) and -hexis (condition or appearance). It is associated with several chronic diseases and, generally, involves a dual mechanism of general muscle wasting, malnutrition, and anorexia. Cachexia is primarily caused by cytokines released from inflammatory cells. In 2011, an international panel defined cachexia as a “multifactorial syndrome characterized by an ongoing loss of skeletal muscle mass (with or without loss of fat mass) that cannot be fully reversed by conventional nutritional support and leads to progressive functional impairment”.

Cachexia may be masked by excess weight, obesity, edema or tumor mass. Muscle wasting or sarcopenia occurs as a key feature of cachexia. In cachexia, muscle wasting is primarily caused by inflammation, in contrast to sarcopenia where muscle wasting is related to age and immobility. Additional parameters utilized to diagnose cachexia include food intake, CRP, and albumin levels.

Anorexia and Cachexia

Anorexia is a subjective term describing the reduction or loss of appetite. Although it is commonly known that patients suffering from cancer and cancer treatments experience loss of appetite, the exact prevalence of anorexia is unknown. In one study (n=351) on advanced cancer patients, more than half the patients experienced anorexia.

In patients suffering from cancer, anorexia may be due to physiological and psychological factors. Anorexia can occur due to chemotherapy treatments, which cause nausea and vomiting. Tumors may also obstruct the upper gastrointestinal system, causing dysphagia and making it difficult to consume food. Depression also significantly contributes to decreased appetite. The decreased appetite causes increased psychological distress and a decreased quality of life.

The presence of a decreased appetite has been proposed to be an independent risk factor for mortality. A North Central Cancer Treatment Group study of 1,115 patients with colorectal and lung cancer found that patients with anorexia had lower survival rates and experienced more toxicity from chemotherapy than similarly matched patients who maintained their appetite. In a retrospective review of 3,047 patients by the Eastern Cooperative Oncology group, weight-loss greater than 5% before chemotherapy predicated early mortality regardless of stage or tumor type.

Cancer-Related Cachexia and Anorexia Syndrome

Cachexia may occur with or without a loss of appetite or reduction in nutrition. Interestingly, anorexia or decreased appetite is an independent risk factor for patient decline and, therefore, it has been proposed to view anorexia accompanying cachexia as a separate syndrome. Cachexia primarily caused by anorexia or reduced intake has been defined as cancer-related cachexia and anorexia syndrome (CACS). CACS, unlike cachexia, includes weight-loss caused by muscle wasting, as well as lipolysis and decreased intake.

Pathogenesis of CACS

Anorexia is due to both catabolic drivers and inflammation associated with cancer, side effects associated with chemotherapy and radiation, as well as depression and other psychosocial effects. It has been proposed that pro-inflammatory cytokines, such as IL-1, IL-6 and TNF-alpha, may decrease leptin release by mimicking excessive negative feedback signaling from leptin. In addition, these cytokines also contribute to hyper-metabolism and increased resting energy expenditure, especially as patients near death.

The symptoms correlating with decreased appetite in cancer have been referred to as “secondary nutrition impact symptoms” (S-NIS), and include early satiety, constipation, nausea or vomiting, dysphagia and depression. Increasing protein and caloric intake, may increase body mass and prolong survival. In order to have this effect, it has been suggested that patients should increase caloric intake by 300-400kcal and protein intake by 50%. This was demonstrated in a study using parenteral nutrition, as meeting these goals may be difficult in patients experiencing S-NIS.

Decreased appetite may also lead to malnutrition. Although the relationship between malnutrition and cachexia is not well defined, it is proposed that a lack of certain nutrients further contributes to muscle catabolism, especially a deficiency of long chain n-3 polyunsaturated fatty acids, vitamin D, and choline. Treatments that address CACS should improve appetite in order to correct malnutrition associated with decreased protein and caloric intake.

The study

Study Type:       Interventional

Study Design:       Intervention Model: Single Group Assignment

Masking: None (Open Label)

Primary Purpose: Treatment

Official Title:       Cannabics Capsules as Treatment to Improve Cancer Related Cachexia and Anorexia Syndrome in Advanced Cancer Patients- Pilot Study

Primary Outcome Measures:

weight gain of ≥10% from baseline weight assessed. [ Time Frame: 3 months]

weight gain of ≥10% from baseline weight assessed by weighing the patient every two weeks in the first month, every month in the coming two months, and every six weeks in the next three months.

Secondary Outcome Measures:

Improvement in appetite [ Time Frame: 3 months]

measured by [include analysis, scale, questionnaire, etc.]

Nutritional intake [Time Frame: 3 months]

evaluation on the first week and after three months, based on daily caloric calculation of three-day food diary.

Reduction in TNF-alpha [Time Frame: 3 months]

level assessed by CBC, biochemistry blood test, TNF-alpha level on day 1, and after three months

Correlation between THC levels and primary outcome, [ Time Frame: 3 months]

assessment by Urine THC- levels one day 1, 2 weeks, 3 months.

QOL will be assessed using the European Organization of Research and Treatment of Cancer core questions on the Quality of Life Questionnaire, version 2 (QLQ-C30) and the Anorexia/Cachexia Therapy (FAACT) questionnaire. [Time Frame: 3 months]

will be assessed using the European Organization of Research and Treatment of Cancer core questions on the Quality of Life Questionnaire, version 2 (QLQ-C30) and the Anorexia/Cachexia Therapy (FAACT) questionnaire.

Safety assessment for early psychiatric side-effects by the Community Assessment of Psychic Experiences [Time Frame: 3 months]

(CAPE) questionnaire on day 1 and after 2 weeks and after 3 months.

Evaluation of muscle strength [Time Frame: 3 months]

using hand dynamometer as estimation for muscle mass on day 1 and after three months.

Estimated Enrollment:       40

Study Start Date: November 2016

Estimated Study Completion Date:       April 2018

Estimated Primary Completion Date:       December 2017 (Final data collection date for primary outcome measure)

Arms       Assigned Interventions

Experimental: Cannabics 5mg

Patients will be treated initially for 3-4 days with 1x5mg Cannabics capsules per day for gradual adaptation. From the 5th day, patients will be treated 2x5mg capsules per 24 hours for a period of 3 months. However, since some patients may suffer from side effects mainly, dizziness and or anxiety, dosage for these patients will be reduced to 5mg per day.

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.

The Company’s patent applications:

1. SYSTEM AND METHOD FOR HIGH THROUGHPUT SCREENING OF CANCER CELLS: NP Patent

2. CANNABINOID COMPOSITIONS, METHODS OF MANUFACTURE AND USE THEREOF: PCT

3. METHOD FOR SENSITIVITY TESTING OF CANNABINOIDS ON PATIENTDERIVED TUMOR BIOPSIES AND CTCS:

Provisional

4. NOVEL SYSTEM AND METHOD FOR MICROBIOME PROFILING AND MODULATION BY MEANS OF CANNABIS ADMINISTRATION: Provisional

We anticipate that we will file additional patent applications in conjunction with our research, testing, and development of our cannabis-based Product Prospects.

Our policy is to seek patent protection for the technology, inventions and improvements that we consider important to the development of our business, but only in those cases where we believe that the costs of obtaining patent protection is justified by the commercial potential of the technology, and typically only in those jurisdictions that we believe present significant commercial opportunities.

Results of Operations

For the Three Months Ended November 30, 2017 and 2016

Revenues

We had received $1,758 from licensing agreements as royalties during the three months ended November 30, 2017 compared to non for the three months ended November 30, 2016.

Operating Expenses

For the three months ended November 30, 2017 our total operating expenses were $538,709 compared to $102,876 for the three months ended November 30, 2016 resulting in an increase of $435,833. The increase is attributable to increase of $190,175 in research and Development expenses and a total increase of $245,658 in General administration, and Sales and marketing expenses.Other comprehensive profit

We incurred a financial expenseanother comprehensive gain of $533$605,740 for the threenine months ended November 30, 2017, compared to financial expense of $44,138 for the three months ended November 30, 2016.May 31st, 2022. The decrease in financial expensegain was mainly attributable to an adjustment to the fair valuea valuation of a financial asset, consisting of the derivative liability.Company’s shares held in Sativus, in the total amount of $239,478 As a result,result; the net losstotal comprehensive gain was $537,504$3,849,283 for the threenine months ended November 30, 2017 compared to $147,014 for the three months ended November 30, 2016.May 31st, 2022.

Liquidity and Capital Resources

Overview

As of November 30, 2017, the CompanyMay 31st, 2022, we had $2,888,250$96,277 in cash compared to $3,367,694$1,968,291 on August 31, 2017.2021. We expect to incur a minimum of $1,000,000 in expenses during the next twelve months of operations. We estimate that these expenses will be comprised primarily of general expenses including overhead, legal and accounting fees, research and development expenses, and fees payable to outside medical centers for clinical studies.

Liquidity and Capital Resources during the threenine Months Ended November 30, 2017May 31st, 2022 compared to the threenine Months ended November 30, 2016Ended May 31, 2021