Item 2. Management’s Discussion
and Analysis of Financial Condition and Results of Operations.
Company Overview
We are a pre-clinical-stage, platform technology
biopharmaceutical company which has developed proprietary innovative medicines in areas of significant unmet medical needs in oncology,
with a current focus on colorectal cancer ("CRC"). Our drug candidate under development for colon cancer is RCC-33, a first-in-class
therapy being developed primarily in two settings: one to reduce tumor cell activity in colon cancer patients as a standalone in neoadjuvant
treatment or "window of opportunity" at the time after colonoscopy, prior to cancer staging; and another for patients with refractory
to therapy and adjuvant to surgery also at the time after colonoscopy. The Company hopes to start first in human Phase I/II clinical
trials in 2023. Neoadjuvant treatment is the administration of a therapy before the surgical treatment to improve patient outcome, and
our business strategy is to advance our programs through clinical studies including with partners, and to opportunistically add programs
in areas of high unmet medical needs through acquisition, collaboration, or internal development.
CNBX Pharmaceuticals Inc. is a clinical stage
pharmaceutical company primarily focused on the development of novel cannabinoid-based products and innovative technologies for the treatment
of cancer.
The company is currently preparing to launch Phase
I/II (a) clinical study in 2023, for the evaluation of its lead drug candidates Cannabics SR for the treatment of patients with advanced
cancer and cancer anorexia cachexia syndrome (CACS) and RCC-33 for the treatment of colorectal cancer. The company’s activities
are centered around the company’s biological laboratory facilities located in Rehovot Israel, where our scientific team leads the
company’s research and development efforts.
Our company’s core activities consist of:
| · |
|
Drug Discovery: development of novel molecular formulations and drug candidates; |
| · |
|
Intellectual Property: filing of corresponding IP to protect our products; and |
| · |
|
Regulatory Affairs: initiation of the regulatory pathway for each drug candidate in our development pipeline |
Our current business model is to undertake an
FDA regulatory pathway for each of the new drug candidates under IND (Investigational New Drug) classification and complete a successful
Phase I/II(a) clinical study (toxicity and proof of concept in humans). In reaching this milestone, where an initial feasibility in humans
was demonstrated, the company will have gained several commercial opportunities for capitalizing on each such product candidate, including
entering into commercial agreements with larger pharma corporations. Accordingly, our company does not engage in any manufacturing, distribution,
or sales of products, nor is it foreseeable to expect that we will in the near future.
2. Development pipeline:
2.1. Cannabics SR for Cancer Anorexia-Cachexia Syndrome
Overview
We are developing Cannabics SR as a product
candidate for the treatment of CACS. Cannabics SR is a sustained-release oral capsule containing a standardized compound of cannabinoids
that has demonstrated a clinically significant weight increase in CACS patients in a peer-reviewed pilot study conducted by Dr. Gil Bar-Sela
of the Rambam Hospital Health Care Campus, Division of Oncology, in Haifa, Israel. Our patent-pending technology provides for a convenient,
once or twice daily administration, with rapid onset and a steady state of therapeutic effect for a 6 to 8-hour duration.
Cancer Anorexia-Cachexia Syndrome
CACS is a common complication of cancer associated
with high morbidity and mortality. It is a complex metabolic syndrome in which a persistently elevated basal metabolic rate is not compensated
for by adequate calorie or protein intake, causing involuntary and progressive weight loss leading to increasing functional impairment
in cancer patients, especially in advanced stages of the disease. Once established, CACS cannot presently be reversed using available
pharmacological or nutritional support techniques.
Unlike starvation, body-weight loss in CACS patients
arises mainly from loss of muscle mass, characterized by increased catabolism of skeletal muscle and decreased protein synthesis. This
weight loss is associated with important clinical outcomes such as increased morbidity, diminished effectiveness of chemotherapy, muscle
wasting, inflammation, fatigue, and reduced survival expectations. The impact of CACS on the patient is not, however, limited to the effect
of weight loss. Quality of life, functional abilities, symptoms, psychological outcomes, and social aspects are all affected by CACS.
According to the National Cancer Institute, nearly
one-third of cancer deaths can be attributed to the severe weight loss and “metabolic mutiny” associated with CACS, and more
than 50% of patients with cancer die with cachexia being present. The overall prevalence of CACS is currently estimated to range from
40% at cancer diagnosis to 70-80% in advanced phases of the disease (Source: Critical Reviews in Oncology/Hematology, 2013;88(3):625-636),
while the overall prevalence of weight loss in cancer patients may be as high as 86% in the last 1-2 weeks of life (Source: Journal
of Pain and Symptom Management 2007;34:94–104).
The cause and subsequent development of CACS is
still poorly understood, but several factors and biological pathways are known to be involved, including inflammation, decreased secretion
of anabolic hormones, and altered metabolic response. While there have been important advances in the study of CACS over the past decade,
including progress in understanding its mechanisms and the development of promising pharmacologic and supportive care interventions, there
is presently no effective pharmacologic therapy for CACS.
Current treatments for CACS are generally based
on nutritional support and CACS pathophysiology-modulating drugs, with the most common being the progestogens, megestrol and medroxyprogesterone,
and corticosteroids. Progestogens appear to stimulate appetite and improvements in body weight by increasing adipose tissue, but have
not been confirmed to augment lean body mass. Megestrol also carries an increased risk of mortality and thromboembolism. Nonetheless,
megestrol is the only FDA approved treatment option for CACS and no drug to date has been shown to be superior to it in efficacy and tolerability.
Corticosteroids are also considered effective in stimulating appetite and reducing fatigue but should only be used for short periods and
in selected cases because of side effects from longer term use, such as insulin resistance, fluid retention, steroidal myopathy, skin
fragility, adrenal insufficiency, and sleep and cognitive disorders. Other drugs are being investigated or are in development. Given the
dearth of approved therapies, we believe that CACS remains a significant area of unmet medical need.
Cannabinoid Therapies for CACS
Cannabis has long been suggested as a well-tolerated,
safe, and effective option to help patients cope with cancer related symptoms with fewer serious side effects than most prescription drugs
currently used as anti-emetics, analgesics, and the like. As such, cannabinoids are finding application in palliative care for reducing
nausea and vomiting, alleviating cancer pain, and stimulating appetite, as well as improving quality of life in cancer patients. Dronabinol
(Marinol®) and nabilone (Cesamet®), two drugs based on synthetic cannabinoids, have each been approved by the FDA for the treatment
of chemotherapy-related nausea in patients who do not respond to conventional antiemetic therapy. Another drug, nabiximols (Sativex®),
a specific cannabis extract, is approved in Canada and the United Kingdom for symptomatic relief of pain in advanced cancer patients.
Despite interest in cannabinoid-based therapies
as a treatment for CACS, their use has been limited by impediments beyond the legal status of cannabis. The most significant obstacle
is the lack of clinical research demonstrating their efficacy. While there is evidence that cannabinoids improve appetite, body weight,
body fat level, caloric intake, mood, and quality of life in cancer patients, the few studies on these effects have yielded mixed and
inconclusive findings. In addition, some of these studies have suffered from methodological constraints that limit any ability to draw
firm conclusions.
The therapeutic use of cannabinoids has also been
inhibited by limitations associated with traditional administration routes that reduce their effectiveness. Smoking and ingestion of cannabis
suffer from wide variability in potency due to a lack of standardized and reproducible formulations. The ingestion of unformulated cannabis
has also been associated with poor absorption and low bioavailability versus other administration routes, requiring higher doses and a
greater risk of negative side effects. Additionally, the lack of available information on cannabinoid strains has made it difficult for
healthcare providers to establish dosing rates. In our experience, however, the principal concern of patients with respect to medical
cannabis lies in the undesirable side effects, such as disorientation and dizziness, which result from significant variability in peak
blood levels of active cannabinoids soon after administration. We further believe that these side effects, which are common among immediate
release methods, are a significant factor in the failure of patients to adhere to recommended treatment regimens and are therefore a pervasive
threat to their health and wellbeing.
Cannabics SR
Cannabics SR is an oral composition in the
form of a hydroxypropylmethylcellulose (HPMC) capsule containing a patent-pending formulation of cannabinoid extracts suspended in a lipid
emulsion. It provides a relatively rapid onset of action, typically within 30-40 minutes, followed by a gradual and sustained release
of active cannabinoids, resulting in a steady state level of beneficial effects for up to 6 to 8 hours with each capsule. Cannabics SR
provides a consistent, predictable concentration of cannabinoids with an absorption profile and bioavailability of active ingredients
that we believe to be superior to other oral cannabinoid administrations. We believe that the multifactorial benefits of the active pharmaceutical
ingredients in Cannabics SR address an unmet medical need for a safe and effective treatment of CACS, leading to improved patient
adherence and better health outcomes.
Cannabics SR capsules contain only food grade
materials without any artificial additives. The active ingredients of each capsule are standardized in composition, formulation, and dose,
and are comprised of only pure, natural extracts of active cannabinoids from selected strains of medical cannabis. All excipients are
recognized by the FDA as Generally Regarded as Safe.
In addition to the therapeutic potential of Cannabics SR
as a treatment for CACS, we believe that our SR technology may be formulated to serve the unique needs of patients suffering from other
indications for which a sustained release of a cannabinoid formulation may be beneficial.
Clinical Development
In 2016, we commenced a two-year pilot study to
evaluate the influence of Cannabics SR capsules on CACS, and, in particular, on weight loss in advanced cancer patients. The study
was led by Professor Gil Bar-Sela, the former Deputy Director of the Division of Oncology at Rambam Health Care Campus, Head of the Palliative
and Supportive Oncology Unit, and Head of Service for Melanoma and Sarcoma Patients.
Patients were administered 2 × 10 mg of
Cannabics SR per 24 hours for six months. During the study, after some patients reported several psychoactive side effects, the dosage
of each capsule was reduced to 5 mg. Almost no side effects were reported with the 5 mg dosage. Participants were weighed at each physician
visit. The primary objective of the study was a weight gain of ≥10% from baseline. Of 24 patients who agreed to participate in the
study, 17 started the Cannabics SR treatment, but only 11 received the capsules for more than two weeks. Three of six patients who
completed the study period met the primary end-point. The remaining three patients had stable weights. In quality-of-life questionnaires
patients reported less appetite loss after the Cannabics SR treatment (p=0.05). According to patients’ self-reports, improvement
in appetite and mood as well as a reduction in pain and fatigue was demonstrated.
Despite various limitations, the preliminary study
demonstrated a weight increase of ≥10% in 3 out of 17 (17.6%) of patients with doses of 5 mg × 1 or 5 mg × 2 capsules daily,
without significant side effects. The remaining patients had stable weights. Also, all patients who remained in the study for at least
4.5 months reported an increase in appetite, as did 83% of the patients who completed the study. For 50% of the patients who completed
the study, there were reports of pain reduction and sleep improvement. Additional results showed a significant decrease of appetite loss
complaints among 83% of the patients who completed the study. (See Bar-Sela, Gil et al. “The Effects of Dosage-Controlled
Cannabis Capsules on Cancer-Related Cachexia and Anorexia Syndrome in Advanced Cancer Patients: Pilot Study.” Integrative Cancer
Therapies vol. 18 (2019): 1534735419881498. doi:10.1177/1534735419881498.)
Figure 1: Appetite loss among
the six patients who completed Cannabics SR treatment, as reported on European Organization of Research and Treatment of Cancer Quality
of Life Questionnaire (EORTC QLC-C30)
Commercialization
The results of our planned pilot studies may permit
us to commercialize Cannabics SR in Israel under license by the Israeli Ministry of Health. If we are granted such a permit, we intend
to engage a GMP manufacturer in Israel to produce Cannabics SR capsules for national distribution.
On May 13, 2020, the Israeli Ministry of Economy
signed a Free Export Order, authorizing the export of GMP certified medical cannabis products from Israel. We are currently evaluating
our export opportunities and optimal commercialization path for Cannabics SR across all available international markets, particularly
with regard to the European Union, Canada, and Australia.
Cancer and Cancer Anorexia Cachexia Syndrome (CACS)
Market Analysis
The dynamics of the cancer cachexia market are
expected to shift in the coming years as a result of the positive outcomes of some of the rare candidates during the development stage
by key players that are in the early stages of clinical development have the potential to create a significant positive shift. The emerging
therapies are projected to be launched during the forecast period. In addition, the dearth of effective therapies for this condition presents
a great opportunity for pharma companies to create novel drugs because there is less competition in the cancer cachexia market. Moreover,
the rising awareness about the condition is also impacting the growth of the cancer cachexia market positively.
The Global Cancer Cachexia Market Size is projected
to reach USD 2.93 billion by 2027, exhibiting a CAGR of 4.8% during the forecast period [2020-2027].
https://www.fortunebusinessinsights.com/cancer-cachexia-market-103262
North America region holds the largest
market share of the global Cancer Anorexia-Cachexia Syndrome Drug North America is expected to hold a large market share in the global
Cancer Anorexia-Cachexia Syndrome Drug Market due to the growing incidence of cancer cases. The International Agency for Research on Cancer
(IARC) claims 13 million new cancer cases worldwide. The World Cancer Report provides that the incidence rate of new cancer cases is increased
by 50% to 15 million in 2020. The existence of a highly developed healthcare system, the high degree of acceptance by medical practitioners
of novel products, the total availability of advanced technological tools, FDA approval of new drugs and many companies are developing
oncology products ( https://www.datamintelligence.com/research-report/ cancer-anorexia-cachexia-syndrome-drug-market)
2.2 RCC-33: colorectal cancer treatment
drug candidate:
Our anti-neoplastic flagship product under development,
RCC-33, is an antitumor drug candidate for the treatment of colorectal cancer, which is the 3rd most diagnosed and 2nd
most lethal of all cancers, with approximately 2M new cases being diagnosed annually worldwide and a current market estimated at $12B,
and which is expected to reach $17B by 2027.
The RCC-33 proprietary formula consists of a specific
synthetic cannabinoid molecular composition that has demonstrated the potential to reduce colorectal cancer tumor volume by over 30% in
repeated in-vivo studies performed.
Overview
Cancer and Cannabinoids
Cancer is a general term used to describe a group
of more than 100 related diseases characterized by uncontrolled growth and spread of abnormal cells, leading to the development of a mass
commonly known as a tumor, followed by invasion of the surrounding tissues and subsequent spread, or metastasis, to other parts of the
body. Despite enormous investment in research and the introduction of new treatments, cancer remains a critical area of unmet medical
need. According to the World Health Organization, cancer is the second leading cause of mortality worldwide, responsible for an estimated
nearly 10 million deaths in 2021. As of January 1, 2019, there were more than 16.9 million people with a history of cancer living in the
United States, with 1.9 million new cases and 609,360 cancer deaths expected in 2022 (Source: American Cancer Society. Cancer Facts
& Figures 2022).
Over the past decade, there has been growing interest
in the therapeutic value of cannabinoid compounds in oncology. Cannabis has long been suggested as a well-tolerated, safe, and effective
option to help patients cope with cancer related symptoms by reducing nausea and vomiting, alleviating cancer pain, stimulating appetite,
and improving quality of life. Beyond their palliative benefits, however, cannabinoids have also been receiving increased attention for
their anti-cancer potential, which we believe may one day revolutionize cancer therapy.
Cannabinoids are a diverse class of chemical compounds
that occur naturally within cannabis plants and are pharmacologically similar to cannabinoids produced by the human body, known as endocannabinoids.
Endocannabinoids form part of the human endocannabinoid system (ECS), a complex biological network that also includes cannabinoid receptors
and enzymes involved in cannabinoid formation, transport, and degradation. The ECS is regarded as an important endogenous system implicated
in regulation of the most vital biological processes to maintain homeostasis, assisting the body to remain stable and balanced despite
external, or environmental, fluctuations (Source: Current Pharmaceutical Design, 2016;22(12):1756-1766).
Dysregulation of the ECS owing to variation in
the expression and function of cannabinoid receptors or enzymes or the concentration of endocannabinoids has been associated with several
diseases, including cancer (Source: International Journal of Molecular Sciences, 2020;21(3):747). Indeed, the mechanisms involved
in the regulation of the ECS as well as the processes that it regulates include practically every pathway important in cancer biology.
Expression of the ECS is altered in numerous types of tumors, compared to healthy tissue, and this aberrant expression has been related
to cancer prognosis and disease outcome, depending on the origin of the cancer (Source: British Journal of Pharmacology, 2018;175(13):2566-2580).
Recent studies suggest that endocannabinoids contribute to maintaining balance in cell proliferation and that targeting the ECS can affect
cancer growth (Source: Canadian Urological Association Journal, 2017;11(3-4):E138-E142).
Cannabinoids can interact with the cannabinoid
receptors in the ECS, sometimes with a higher affinity than endocannabinoids. As a consequence, all the processes regulated by endocannabinoids
are susceptible to interference by cannabinoids. The ability to use cannabinoids to modulate the ECS encompasses several attractive pharmacotherapeutic
targets for systemic anti-cancer treatment and has sparked considerable research examining cannabinoid action on cancer cells (Source:
Pharmacological Reviews, 2006;58(3):389-462).
Cannabinoids have demonstrated selective anti-tumor
properties in preclinical studies, exerting anti-proliferative, proapoptotic, anti-angiogenic, and anti-metastatic and anti-inflammatory
effects depending on tumor type and specific setting (Source: Cancer Medicine, 2018:7(3):765-775). These effects appear to be more
pronounced when cannabinoids are used together versus being administered separately, a mechanism known as the entourage effect.
We believe, therefore, that cannabinoid combinations may hold promise for an improved anti-proliferative strategy for cancer management.
In addition to their potential role as anti-cancer
agents, cannabinoids have been observed to act synergistically with some conventional antineoplastic drugs, such as chemotherapeutic agents,
enhancing their effectiveness (Source: Cancer Medicine, 2018;7(3)765-775). This raises the potential for combinational therapies
that may increase the range of chemotherapeutic options available to patients and enable targeting of tumor progression at different levels
while also permitting dosages of cytotoxic drugs to be dramatically reduced without compromising efficacy.
Figure 2: Synergistic effects
of cannabis extracts and chemotherapies on cancer biopsy after treatment with the same extract and three different chemotherapy combinations
As of the date of this filing, we are not aware
of any cannabinoid-based therapies approved for the anti-cancer treatment.
Our lead product candidate is RCC-33, which we
are developing as a treatment for CRC. RCC-33 is an oral capsule containing a proprietary formulation of cannabinoids that have demonstrated
synergistic efficacy in reducing the viability of human colon cancer cell lines in preclinical studies.
Colorectal Cancer
CRC is one of the more common forms of cancer
worldwide, representing a significant challenge to the global healthcare system. According to the World Health Organization, CRC is the
third most diagnosed cancer in the world and the second-leading cause of cancer-related mortality. In the United States, there were approximately
1,369,005 people living with CRC in 2019(Source: National Cancer Institute. “Cancer Stat Facts: Colorectal Cancer”).
In 2022, an estimated 151,030 cases of colon cancer and 44,850 cases of rectal cancer will be diagnosed in the US, and a total of 52,580
people will die from these cancers (Source: American Cancer Society. “Cancer Facts & Figures 2022”).
Most CRCs begin as a noncancerous growth called
a polyp that develops on the inner lining of the colon or rectum. The most common kind of polyp is called an adenomatous polyp or adenoma.
According to the American Cancer Society, an estimated one-third to one-half of all individuals will eventually develop one or more adenomas.
Although all adenomas have the capacity to become cancerous, fewer than 10% are estimated to progress to invasive cancer. The likelihood
that an adenoma will evolve into cancer increases as it becomes larger or when it acquires certain histopathological characteristics.
Adenomas that become cancerous, called adenocarcinomas, comprise nearly 96% of all CRCs (Source: American Cancer Society. “Colorectal
Cancer Facts & Figures 2020-2022”). Adenocarcinomas may grow into blood vessels or lymph vessels, increasing the chance
of metastasis to other anatomical sites.
CRC usually develops slowly, over a period of
10 to 20 years. The complex sequence of events occurring during initiation, development and propagation of adenocarcinomas is likely the
result of a lifelong accumulation of mutations caused by both genetic and environmental factors known as the adenoma to carcinoma sequence.
While the specific cause of any particular case of CRC is often unknown, more than one-half of all cases and deaths are attributable to
lifestyle and environmental factors, such as smoking, unhealthy diet, high alcohol consumption, physical inactivity, and excess body weight
(Source: American Cancer Society. “Cancer Facts & Figures 2020”).
CRC does not usually cause symptoms until the
disease is advanced, therefore early detection of adenomas by screening is vital. If not treated or removed, an adenoma can become a potentially
life-threatening cancer.
Current Standard of Care
Treatment options for CRC patients depend on several
factors, including the type and stage of cancer, possible side effects, and the patient’s preferences and overall health. Surgical
removal of the tumor is the most common form of treatment, particularly in the early stages of malignancy. Patients with more advanced
stages of CRC may be given adjuvant chemotherapy to kill any cancer cells remaining after surgery, though standard chemotherapy is associated
with severe side effects and provides marginal benefit to the majority of patients. While radiation therapy is often used to treat rectal
cancer, it is not generally recommended for colon cancer patients except in the later stages of the disease (Source: American Cancer
Society. “Treating Colorectal Cancer”).
CRC is a heterogeneous disease with distinct clinical,
molecular, and pathophysiological characteristics. As a result, the response to treatment is variable between patients, even when they
are diagnosed at the same clinical stage. Such heterogeneity remains an obstacle to the optimization of treatment for each individual.
Researchers are continuing to investigate new treatment options, such as immunotherapy and targeted therapy, that focus upon the genes,
proteins, and other factors in a particular tumor (Source: American Cancer Society. “Advances in Colorectal Research”).
Immunotherapy uses the body’s own immune
system to kill cancer cells. There are already several FDA-approved immunotherapy options for CRC, such as pembrolizumab (Keytruda®),
nivolumab (Opdivo®), and ipilimumab (Yervoy®). Many immunotherapies that have shown promise in addressing other types of cancer
are also being tested for CRC. While immunotherapy has had some encouraging results, significant limitations remain. Its efficacy is often
unpredictable, and the treatment can lead to the body becoming resistant or result in off-target toxicities where the body’s immune
system attacks healthy tissue. Immunotherapy may take longer than other protocols and it is substantially more expensive than classical
treatments (Source: Pharmacy & Therapeutics, 2017;42(8):514-521).
Targeted therapy uses drugs to target specific
molecules inside cancer cells or on their surface to slow the growth of cancer, destroy cancer cells, and relieve cancer symptoms. There
are different types of targeted therapy drugs, each working differently depending on what molecule the drug is targeting. A treatment
is chosen based on the types of molecules expressed on the patient’s tumor cells, which allows doctors to tailor cancer treatment
for each person. Several targeted therapy drugs, such as bevacizumab (Avasin®) and cetuximab (Erbitux®), are already used to treat
advanced CRC. Despite showing clinical promise, targeted therapy has challenges, such as tumor heterogeneity, off-target toxicity, and
acquired resistance (Source: Medical Research Journal, 2019;4(2):99-105). The lack of biomarkers by which to identify patients
having a high probability of response is also a particularly significant obstacle. As with immunotherapy, the cost of targeted therapy
is substantially higher than classical treatments.
We believe that there is no “magic bullet”
to cure cancer and that a personalized combination of cancer treatments may be the best course for long term survival benefits in each
case. To that end, the development of more prevention strategies and novel agents will be essential.
Cannabinoids and Colorectal Cancer
One area of increasing interest in the treatment
of CRC lies in the development and use of cannabinoid therapeutics. The ECS is regarded as an important regulatory system in the gastrointestinal
tract, being involved in several important functions such as motility, secretion, sensation, inflammation, and carcinogenesis. Recent
studies advocate that the ECS plays a critical role in the development of CRC and should therefore be considered as an appropriate target
for CRC inhibition (Source: Frontiers in Pharmacology, 2016;7:361). The expression of ECS components in CRC has been found to be
increased and associated with poorer prognosis and advanced stages of disease (Source: Cannabis and Cannabinoid Research, 2018, 3(1):272-281).
For example, cannabinoid receptors have been found to be overexpressed in tumor cells of the colon and this up-regulation has been postulated
to be an indicator of cancer outcome (Source: British Journal of Pharmacology, 2018; 175(13): 2566-2580).
Research on the effects of cannabinoid compounds
on CRC has demonstrated an ability to reduce the viability of CRC cell lines in vitro (Source: Cancer Medicine, 2018;7(3):765-775),
while there is also convincing scientific evidence that cannabinoids are able to prevent or reduce carcinogenesis in different animal
models of colon cancer (Source: Expert Review of Gastroenterology & Hepatology, 11:10, 871-873).
We believe that cannabinoids are a promising therapeutic
agent for the treatment of CRC. We have conducted several in vitro unpublished studies using our bioinformatics platform to
confirm that cannabinoids cause necrosis in colon cancer cells. While many cannabinoids demonstrate levels of toxicity on cancer cells,
we have found that certain cannabinoid extracts and combinations show increased levels of toxicity relative to other isolated or combined
cannabinoids. These findings have spurred the development of RCC-33, our product candidate for the treatment of CRC.
Figure 3: Synergistic effects
of different cannabinoid combinations on viability of a colon cancer cell line.
RCC-33
We are developing RCC-33 as an oral capsule or
solution containing high concentrations of the cannabinoids CBDV and CBGA in a novel formulation, which we believe may be effective in
the treatment of adenocarcinomas of the colon. The cannabinoids in RCC-33 have demonstrated complex synergistic anti-tumor effects in
combination, with no psychoactive effect. In our preclinical in vitro studies evaluating the influence of 15 different cannabinoids
on human colon cancer cell lines (RKO, HCT116), alone and in combination, RCC-33 demonstrated clear efficacy in reducing the viability
of colon cancer cells versus alternative cannabinoid combinations. Importantly, we could detect significant reduction effect on tumor
development in mice inoculated with human colorectal cancer cells.
Development Plan
The company is currently preparing to launch Phase
I/II (a) clinical study in 2023, for the evaluation of its lead drug candidates Cannabics SR for the treatment of patients with advanced
cancer and cancer anorexia cachexia syndrome (CACS) and RCC-33 for the treatment of colorectal cancer. We plan to conduct further preclinical
studies to establish the safety and efficacy before proceeding with first-in-human clinical testing.
Preclinical Studies
We plan to conduct non-clinical safety studies
following Good Laboratory Practice (GLP) to evaluate the systemic and local toxicity of escalating doses of RCC-33 and establish dosing
parameters. The results of these preclinical studies, which are expected in 2023, will guide our planned Phase I/II(a) clinical trial.
The non-clinical requirements to support the development program will be verified with the FDA at a pre-IND meeting. Such studies may
include repeated dose toxicity studies, male and female fertility studies, embryofetal development studies, animal abuse related studies,
pharmacokinetics studies, drug-drug interaction studies, and others.
Clinical Trials
We plan to evaluate the safety, tolerability,
and pharmacokinetic properties of Cannabis SR and RCC-33 in a Phase I/II(a) ascending dose clinical trial in CRC patients, commencing
in the first quarter 2023. The clinical trial will examine the tolerability, pharmacokinetics, pharmacodynamics, and efficacy of multiple
doses of RCC-33 in CRC patients. We are currently identifying potential contract research organizations and clinical trial centers to
conduct the Phase I/II(a) human proof of concept study, which is estimated to cost $6,500,000. As of the date of this filing, however,
the Company does not have sufficient funds to complete the Phase I/II(a) study.
Subject to the results from our Phase I trials,
we plan to submit an IND to the FDA for RCC-33 with the clinical protocol for a Phase II double-blind placebo controlled clinical trial
evaluating RCC-33 in patients with CRC at various dosing levels versus placebo. The outcomes from the planned Phase II human proof of
concept trial will inform our decision regarding further steps in the clinical development of RCC-33.
Our Pipeline:
In addition to RCC-33, our colorectal cancer
treatment drug candidate, the company has several other drug candidates under development, including PLP-33 for the local treatment
of Lateral Spreading, or Sessile, colorectal polyps during colonoscopy, BRST-33 for the treatment of breast cancer, MLN-33
for the treatment of Melanoma and PRST-33 for the treatment of prostate cancer. These additional drug candidates are in the early
stage of development and the company expects to complete the in-vivo research for each product by end of 2023. (see Fig. 4).
Fig. 4
2.3 Product
lines currently not actively developed:
The company has several product lines that are
currently not being actively developed following company’s decision to focus its resources and attention exclusively on the development
of its FDA route drug candidates, and SR Capsule described above. The product lines not actively developed include:
Cannabics CDx (evaluate) Drug Sensitivity
Test
Cannabics CDx is an ex-vivo drug sensitivity test
under development to provide healthcare providers with clinical decision support data from which they can identify, for a particular cancer
patient undergoing cannabinoid therapy, which cannabinoids or cannabinoid combinations may have the most beneficial anti-cancer effects,
and which cannabinoids may be contraindicated.
Company may revisit this decision at a later
stage after launching the first in human clinical studies for the validation of its colorectal cancer treatment drug candidate
RCC-33.
3. Market
opportunity for cancer treatment drug candidates:
3.1.
Neoadjuvant therapy:
According to the National Cancer Institute, Neoadjuvant
Therapy is a "treatment given as a first step to shrink a tumor before the main treatment, which is usually surgery”.
Limitations:
| · |
|
Mild to severe side effects |
| · |
|
Suppressed immune system |
| · |
|
Potential resistance of tumor residues to postoperative chemotherapy * |
* “nCRT increases ITGH and may result in the expansion of resistant
tumor cell populations in residual tumors”.
Frontiers in Oncology. 2019
The Effects of Neoadjuvant Chemoradiation in
Locally Advanced Rectal Cancer—The Impact in Intratumoral Heterogeneity.
3.1.1 Neoadjuvant
therapy in rectal cancer
Neoadjuvant chemoradiotherapy has become the standard
treatment for locally advanced rectal cancer. Neoadjuvant chemoradiotherapy not only can reduce tumor size and recurrence, but also increase
the tumor resection rate and anus retention rate with very slight side effect. Comparing with preoperative chemotherapy, preoperative
chemoradiotherapy can further reduce the local recurrence rate and downstage. Middle and low rectal cancers can benefit more from neoadjuvant
chemoradiotherapy than high rectal cancer.
3.1.2 Neoadjuvant
therapy in breast cancer
In early breast cancer, surgery is the mainstay
of curative treatment. Complementary local radiotherapy and systemic - adjuvant endocrine therapy or chemotherapy treatments are associated
with the aim of reducing the risk of relapse according to the clinicopathological characteristics of the tumor. However, the possibility
of administering these therapies prior to surgery in neoadjuvant setting offers several advantages:
| · |
|
reduction in tumor size to improve respectability, |
| · |
|
increased rate of conservative surgery improving esthetic results, |
| · |
|
reduction in the extent of axillary surgery, |
| · |
|
early treatment of micrometastatic disease |
Fig5. Asco Guidelines for neoadjuvant therapy in breast cancer
According to ASCO guidelines most of the patients
are eligible for neoadjuvant chemotherapy and are the end consumers of BRST-33, while the current treatment regimen negates severe side
effects.
Side effects and risks of standard of care:
| · |
|
nausea or vomiting |
| · |
|
hair loss |
| · |
|
nail or skin changes |
| · |
|
appetite loss |
| · |
|
weight changes |
| · |
|
diarrhea or constipation |
| · |
|
mouth sores |
| · |
|
fatigue |
3.2.
Cannabinoid Neoadjuvant Therapy
For some time now, the FDA has promoted clinical
studies on Cannabinoids as a growing range of stakeholders has expressed interest in development of drugs that contain cannabis and compounds
found in cannabis. Recent legislative changes have also opened new opportunities for medical cannabis clinical research. As this body
of research progresses and grows, the FDA is working to support drug development in this emerging scientific arena.
RCC-33 & BRST-33 – Potential safe
drugs improving rectal and breast cancer neoadjuvant standard of care
RCC-33 & BRST-33 anticipated
advantage over standard of care:
| · |
|
Non-Suppressed immune system |
| · |
|
potential low toxicity which is even more important in neoadjuvant treatment since patients will suffer less side effects. Since the two drug candidates are based on two natural molecules (cannabinoids) found in the Cannabis plant, the safety of the molecules in the short and long run is potentially lower. Not like in a new drug entity in which toxicity could not be predicted. |
| · |
|
Overcoming Potential resistance of tumor residues to postoperative chemotherapy |
3.3. Cancer
Immunotherapy:
Our business strategy is to advance our programs
through clinical studies with partners, and to opportunistically add programs in areas of high unmet medical needs through acquisition,
collaboration, or internal development. Despite significant advances in oncology, there is still a large unmet need in treating
patients with solid tumors, especially those with advanced disease who are refractory or unresponsive to currently available drugs. A
business and clinical synergism of CNBX Pharmaceuticals and Tageza Pharmaceuticals is advancing towards unique therapeutics and optimizing
their combination to expand oncology treatment options to cancer patients. The team work will be a unique collaboration of experienced
scientist, physicians and exceptional healthcare research professionals. Within the partnership, CNBX Pharmaceuticals leverages it’s
the cutting-edge infrastructure platform to support Tageza at various stages of drug development, including, target validation, compound
validation and pre-clinical and clinical trial optimization. From Tageza Pharmaceutical partnership side, the clinical experience from
one of the biggest Oncology Centers, access to data and insights as a result of large cohorts of patients during treatment, can be validated
to determine patients who are most likely to benefit from novel cannabinoid treatments. The two companies continue in their collaboration,
though no definitive agreement has closed to date.
Patients undergoing most of currently existing
treatments benefit a reduction in tumor size but often relapse and develop more aggressive disease. The residual population of chemotherapy-resistant
tumor cells is enriched by Tumor Initiating Cells (TIC) previously known as cancer stem cells (CSC). The TaGeza technology is targeting
TIC/ CSC by re- purposing small molecules and generating specific antibody generation for targeted immunotherapy ADC (Antibody drug conjugates).
CSCs were first found in colorectal cancer. Because
of its heterogeneity, drug resistance etc., it was difficult to completely eliminate CSCs using traditional treatment methods. The remaining
CSCs can cause tumor recurrence and invasion, and ultimately the death of the patient. Therefore, developing a therapy that can effectively
target CSCs will greatly promote the treatment of GI cancers (Sun, Y., Li, B., Cao, Q. et al. Targeting cancer stem cells with
polymer nanoparticles for gastrointestinal cancer treatment. Stem Cell Res Ther 13, 489 (2022). https://doi.org/10.1186/s13287-022-03180-9)
Antibody Drug Conjugates ADC
Antibody–drug conjugate (ADC) is a new emerging
class of highly potent pharmaceutical drugs, which is a great combination of chemotherapy and immunotherapy. Antibody–drug conjugate
(ADC) is typically composed of a monoclonal antibody (mAbs) covalently attached to a cytotoxic drug via a chemical linker. It combines
both the advantages of highly specific targeting ability and highly potent killing effect to achieve accurate and efficient elimination
of cancer cells, which has become one of the hotspots for the research and development of anticancer drugs. Since the first ADC, Mylotarg®
(gemtuzumab ozogamicin), was approved in 2000 by the US Food and Drug Administration (FDA), there have been 14 ADCs received market approval
so far worldwide. Moreover, over 100 ADC candidates have been investigated in clinical stages at present. This kind of new anti-cancer
drugs, known as “biological missiles”, is leading a new era of targeted cancer therapy. The target antigen expressed on tumor
cells is the navigation direction for ADC drugs to identify tumor cells and it also determines the mechanism (e.g., endocytosis) for the
delivery of cytotoxic payloads into cancer cells. Hence, an appropriate selection of target antigen is the first consideration for the
designation of ADC. In order to reduce off-target toxicity, the targeted antigen firstly should be expressed exclusively or predominantly
in tumor cells, but rare or low in normal tissues.22 The antigen is ideally a surface (or extracellular) antigen (Fu, Z., Li, S., Han,
S. et al. Antibody drug conjugate: the “biological missile” for targeted cancer therapy. Sig Transduct Target Ther 7,
93 (2022). https://doi.org/10.1038/s41392-022-00947-7) The ADC Market indicators
Global sales of currently marketed ADCs are forecast
to exceed US$16.4 billion in 2026. The market for ADCs is set to grow further beyond 2026, as novel agents enter clinical practice across
several oncology indications. https://www.nature.com/articles/d41573-021-
4. Outsourced GMP manufacturing
and commercial operation:
4.1.
Outsourced GMP manufacturing
Our current position is that all of our Chemistry
Manufacturing and Controls (CMC) required for the approval process of our drug candidates is to be outsourced. The RCC-33 formulation,
as well as all additional drug candidates in our pipeline, while inspired by natural molecules, could consist only of formulations made
from chemically synthesized molecules, or APIs (Active Pharmaceutical Ingredients). Our Company is not engaged in the development
of any botanical or botanically based product/s. Additionally, in view of our upcoming submission of a pre-IND meeting request with the
FDA, the Company the company will need to enter into an agreement with a manufacturer and supplier of GMP (Good Manufacturing Practice)
grade APIs suited for Clinical Stage Products. There are a couple of large and long-established US corporation with a long track record
of working with the FDA. Accordingly, the manufacturer will also need to provide support to CNBX throughout an IND filing process, including
providing all necessary and related information concerning CMC in the form of a comprehensive technical package to be presented to the
FDA. APIs supplied under said agreement will be used by Company in Phase I/II (a) clinical studies that it is planning to launch in 2023.
4.2.
Commercial Operations
We have not established a sales, marketing, or
product distribution infrastructure. We plan to commercialize any drugs we develop through licensing arrangements and strategic partnerships
with established companies in the pharmaceutical industry having strong marketing capabilities and distribution networks. We generally
intend to advance our drug candidates through Phase I and Phase II clinical trials as appropriate in order to establish their clinical
and commercial potential before negotiating the terms of any licensing or collaboration. We believe that this approach will achieve the
fullest marketing and distribution potential of any drugs or other products that we may develop in the short term.
5. Core
activities:
5.1.
Drug Discovery
Conduct all screening and pre-clinical research
at in-house state of the art laboratory facilities
Our Research and Development:
To address these problems and improve clinical
outcomes, CNBX Pharmaceuticals focuses on the development of diagnostics that monitor cancer progression and cannabinoid-cancer sensitivity
tests to tailor treatment of cancer with cannabinoid medicine. Utilizing novel High-Throughput Screening (HTS) methods to perform studies
on cancer cell lines and on circulating tumor cells (CTC) derived from cannabis medicated patients.
We aim to treat a wide scope of cancers both as
the main treatment and as a conjugate to conventional chemotherapy. We believe a significant need remains for novel drugs for patients
who do not respond to existing therapies or for whom these therapies bear undesirable side effects. We recognize the potential therapeutic
applications of the synergistic effects of these active compounds thus building the methodology and procedures that decipher specific
ratios of active compounds in regard to their antitumor activity.
Our government licensed laboratory operates a
unique, custom designed and built research and development laboratory which combines high throughput screening, (HTS) capabilities with
the most advanced data tools allowing us to enable miniaturization and automation of a variety of biological assays. The automated system
is comprised of:
| |
1. |
High Content Screening (HCS) Platform, which is an automated cellular imaging and analysis platform designed for quantitative microscopy. |
| |
2. |
Flow Cytometry, which enables multi-parametric single cell analysis. |
| |
3. |
Automated workstation, for liquid handling for dispensing accurate and reproducible volumes of liquids and compounds. |
| |
4. |
Multimode microplate reader, designed for fast measurements of numerous biological reactions/processes. |
The integration of these instruments is enabled
via a robotic arm, which allows a continuous process which utilizes all instruments.
Readouts generated from these instruments provide
us with insights to the effect of our cannabinoid library on parameters such as, proliferation inhibition, apoptosis induction, angiogenesis
prevention and toxicity on cancerous cells.
These experiments will produce multiplexed data
composed of images of cells, cell specific markers and the extent/signal of the biological response. The biological response will be measured
using different concentration of cannabinoids and their combinations, thus determining the most effective cannabinoid treatment for a
specific cancer type.
In vitro Studies – Drug Screening
We have a proprietary procedure of high throughput
screening (HTS) and high content screening (HCS) for the detection of correlations between cannabinoid ratios, dosages and anti-tumor
activity using a growing library of human cancer cell lines and creating an enlarged variety of Cannabis-based compounds. We examine the
biological activity of these compounds on tumor cell lines of distinct tissue lineage and creating a highly valuable therapeutic data.
We Screen for the most potent cannabinoid/natural extracts. Our goal in the invitro studies is to build a library of both shaulfied and
natural cannabinoid extracts and to reveal their biological impact on a library of cancer cell lines. The HTS technology enables us to
gain this data base in a faster manner and to reveal more mechanisms of action that are related to the genetics of the cancer. We are
now in the process of merging our data with sophisticated data mining to help find meaningful insights of both treatment and outcome.
Our core technology is a continuously evolving
bioinformatics platform that utilizes high-throughput screening technology, advanced data analytics, and proprietary methodologies to
rapidly examine the physiologic effect of multiple cannabinoid compounds on tumor cells. This technology enables us to screen thousands
of cannabinoid combinations, generating multiple datasets on the anti-tumor properties of different cannabinoid formulations and ratios.
We conduct a broad range of preclinical research on cannabinoids through our bioinformatics platform, which informs the development of
our product drug candidates.
We have developed a continuously evolving preclinical
bioinformatics platform that enables us to evaluate and classify the physiological impact of multiple cannabinoid compounds on various
cancer cells. Utilizing state-of-the-art high-throughput screening and flow cytometry, our platform is capable of testing thousands of
compounds weekly, allowing us to rapidly and effectively examine their interactions with a growing library of human cancer cell lines
and biopsies. Through the large body of data generated by our platform, we are accumulating in-depth knowledge of the various therapeutic
effects of cannabinoids and patterns of cannabinoid ratios that demonstrate meaningful physiologic impact on cancer.
Our bioinformatics platform includes the following:
| |
Ø |
high-throughput screening, high content screening, flow cytometry, machine learning, robotics, and proprietary methodologies; |
| |
Ø |
a library of human cancer cell lines and thousands of different combinations and ratios of cannabinoid compounds in a costumed matrix; |
| |
Ø |
a growing database of biological response data; |
| |
Ø |
in-house extraction, processing methodologies, and analytical techniques that yield well-characterized and standardized extracts; |
| |
Ø |
collaborations with regulated cannabis producers that may expand our cannabinoid compound library and provide us with access for future proprietary cultivars; |
| |
Ø |
fully integrated in-house research and development; and |
Once a series of potentially active cannabinoids
is identified for a specific cancer type, we then test and confirm their activity through in vitro and ex-vivo evaluation
studies to determine their potential activity. Through this process, we are able to assess their therapeutic potential. The results of
our pre-clinical experiments provide starting points for our clinical development programs.
5.2. Intellectual Property
Expand and protect the technology, inventions, and trade secrets that
are critical for business development.
Intellectual Property
Our success depends in significant part on our
ability to protect the proprietary nature of our Product Prospects, technology and know-how, to operate without infringing on the proprietary
rights of others; and to defend challenges and oppositions from others and prevent others from infringing on our proprietary rights, including
our provisional patents described below.
We plan to continue to seek patent protection
in the United States and other countries for our proprietary technologies. To date, our intellectual property portfolio includes three
provisional patents, filed with the USPTO, related to our line of activity (pharmaceutical formulations; drug delivery; therapeutic uses
of cannabinoids and other cannabis compounds and personalized cannabinoid diagnostics), as well as know-how and trade secrets.
Scientific Advisory Board:
The development of our drug candidates is taking
place with the close guidance and support of our clinical advisory team consisting of world-renowned experts, including doctors and scientists
with specific expertise in the fields of cancer research, cancer treatment, Oncology, Hematology, Melanoma, Gastroenterology, AI and FDA
regulation. Our team of experts is highly qualified and respected worldwide, some members having numerous publications in their respected
names, including in high authority peer reviewed publications such as The New England Journal of Medicine and Nature, to name only a few.
Results of Operations
For the Three Months Ended February 28, 2023 and 2022
Operating Expenses
For the three months ended February 28, 2023,
our total operating expenses were $250,010 compared to $730,261 for the three months ended February 28, 2022, resulting in a decrease
of $480,251. The decrease is attributable to a total decrease of $162,002 in general administration, and sales and marketing expenses
and a decrease of $318,248 in research and development expenses.
We incurred a financial loss of $2,416,285 for
the three months ended February 28, 2023, compared to other financial expenses of $508,610 for the three months ended February 28, 2022.
The increase in financial expense was mainly attributable to a capital loss due to a realization of the Company’s shares held in
Sativus Inc of $2,395,298. As a result, the net loss was $2,624,321 for the three months ended February 28, 2023, compared to a net loss
of $1,238,871 for the three months ended February 28, 2022.
Net Loss
Net loss for the three months ended February 28,
2023 was $2,624,321 compared to net loss $1,238,871 for the three months ended February 28, 2022, for the reasons explained above.
For the Six Months Ended February 28, 2023 and 2022
Operating Expenses
For the six months ended February 28, 2023, our
total operating expenses were $596,800 compared to $1,840,610 for the six months ended February 28, 2022, resulting in a decrease of $1,243,810.
The decrease is attributable to a total decrease of $548,405 in general administration, and sales and marketing expenses and a decrease
of $695,405 in research and development expenses.
We incurred a financial loss of $2,385,190 for
the six months ended February 28, 2023, compared to other financial expenses of $721,820 for the six months ended February 28, 2022.
The increase in financial expense was mainly attributable to a capital loss due to a realization of the Company’s shares held in
Sativus Inc of $2,395,298. As a result, the net loss was $2,981,990 for the six months ended February 28, 2023, compared to a net loss
of $2,561,891 for the six months ended February 28, 2022.
Net Loss
Net loss for the six months ended February 28,
2023 was $2,981,990 compared to net loss $2,561,891 for the six months ended February 28, 2022, for the reasons explained above.
Liquidity and Capital Resources
Overview
As of February 28, 2023, we had $47,748 in cash
compared to $117,515 on August 31, 2022. 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
Six Months Ended February 28, 2023 compared to the Six Months Ended February 28, 2022
We used cash in operations of $114,447 for the
six months ended February 28, 2023 compared to cash used in operations of $1,154,322 for the six months ended February 28, 2022. The negative
cash flow from operating activities for the six months ended February 28, 2023 is primarily attributable to the Company's net loss from
operations of $2,981,990, share based compensation of $110,530, convertible loan valuation in a total of $9,034, depreciation of $83,575,
an increase in accounts payables and accrued liabilities of $249,421 and a decrease of $19,685 in account receivables and prepaid expenses.
We had cash flow from investing activities of
$24,702 during the six months ended February 28, 2023, compared to cash used from investing activities of $513 for the six months ended
February 28, 2022. The cash flow was from realization of the Company’s shares held in Sativus Inc of $24,702 for the six months
ended February 28, 2023, comparing to cash used from to purchase of fixed assets in the aggregate amount of $513 for the six months ended
February 28, 2023
We will have to raise funds to pay for our expenses.
We may have to borrow money from shareholders, issue equity or enter into a strategic arrangement with a third party. There can be no
assurance that additional capital will be available to us. We currently have no arrangements or understandings with any person to obtain
funds through bank loans, lines of credit or any other sources. Since we have no such arrangements or plans currently in effect, our inability
to raise funds for our operations will have a severe negative impact on our ability to remain a viable company.
Going Concern
Our independent auditors included an explanatory
paragraph in their report on the accompanying unaudited financial statements regarding concerns about our ability to continue as a going
concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our
independent auditors.
Our unaudited financial statements have been prepared
on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. Our
ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/or to obtain
the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they become due.
The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that we will be able to continue
as a going concern. Our unaudited financial statements do not include any adjustments to the amount and classification of assets and liabilities
that may be necessary should we be unable to continue as a going concern.
There is no assurance that our operations will
be profitable. Our continued existence and plans for future growth depend on our ability to obtain the additional capital necessary to
operate either through the generation of revenue or the issuance of additional debt or equity.
Off-Balance Sheet Arrangements
We currently have no off-balance sheet arrangements
that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Policies
The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America requires us to make a number of estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. We base our
estimates on historical experiences and on various other assumptions that we believe to be reasonable under the circumstances. Actual
results may differ materially from these estimates under different assumptions and conditions. We continue to monitor significant estimates
made during the preparation of our financial statements. On an ongoing basis, we evaluate estimates and assumptions based upon historical
experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances;
however, actual results may differ from these estimates under different future conditions.
See Item 7, “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” and Note 2, “Summary of Significant Accounting Policies”
in our audited consolidated financial statements for the year ended August 31, 2022, included in our Annual Report on Form 10-K as filed
on November 29th, 2022, for a discussion of our critical accounting policies and estimates.