XML 22 R11.htm IDEA: XBRL DOCUMENT v3.19.1
1. Summary of Significant Accounting Policies (Policies)
6 Months Ended
Feb. 28, 2019
Accounting Policies [Abstract]  
Organization

Organization

 

Cannabics Pharmaceuticals Inc. (the “Company”), was incorporated in the State of Nevada, on September 15, 2004, under the name of Thrust Energy Corp. On May 21, 2014, the Company changed its name, via merger in the state of Nevada, to Cannabics Pharmaceuticals Inc., at which time its course of business became pharmaceutical development.

 

On July 31, 2014, the Company filed its exclusive patent application with the U.S. 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 basis for the Company’s “CANNABICS SR” technology, which consists of the intellectual property (“IP”) for standardized and long-acting medical cannabis capsules, designed for patients suffering from diverse indications. Simultaneously the patent was filed with the Patent Cooperation Treaty (“PCT”) division of the Israeli Patent Office (ILPO) in order to provide international IP protection.

 

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

 

On February 24, 2016, the Company filed a new patent application for the Company’s slow release (“SR”) medical capsules with the USPTO.

 

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 Israeli Ministry of Health. This clinical study involves patients with advanced cancer and cancer anorexia cachexia syndrome (CACS), and the 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 weight loss. This study examines the influence of the Company’s 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 U.S. National Institute of Health under "Cannabics Capsules as Treatment to Improve Cancer Related CACS in Advanced Cancer Patients," Identifier NCT02359123.

 

On June 6, 2016, the Company filed a PCT application with the USPTO entitled a "System and Method for High Throughput Screening of Cancer Cells." The Company has developed a proprietary, High Throughput Screening (“HTS”) system 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 system 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 the development of its 5mg tetrahydrocannabinol (“THC”) capsule intended for naïve patients who have not tried cannabis in the past. The Company’s 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 Rambam Medical Center in northern Israel and under strict regulations of the Israeli Ministry of Health, by whom the Company has been licensed since 2014.

 

On June 30, 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, 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. Pursuant to 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, 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 Vice President of R&D to lead the genetic research. Dr. Grinberg has a Ph.D. in Virology & M.Sc. in clinical pharmacology with managerial experience in executing pharmacological research.

 

On August 28, 2017, the Company announced it received a positive preliminary international patentability report from the PCT division of the ILPO regarding its patent application relating to personalized screening of necrotic cancer cells through an HTS, finding all claims “innovative and inventive.”

Basis of Presentation

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, 2018 annual financial statements included in our Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on November 29, 2018.

Principles of Consolidation

Principles of Consolidation

 

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

Going Concern

Going Concern

 

The accompanying unaudited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. While the Company has incurred a net profit of $3,073,691 for the six months ended February 28, 2019, it has incurred cumulative losses since inception of $4,223,086. These conditions raise substantial doubt about the ability of the Company to continue as a going concern.

Research and Development Costs

Research and Development Costs

 

The Company accounts for research and development costs in accordance with Accounting Standards Codification 730 “Research and Development” (“ASC 730”). ASC 730 requires that research and development costs be charged to expense when incurred. Research and development costs charged to expense were $732,227 and $317,551 for the six months ended February 28, 2019 and 2018, respectively.

Reclassifications

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.