News 
Market Data 
Discover
Replies to post #5899 on CNBX Pharmaceuticals Inc (CNBX)
04/05/23 9:25 AM
Convertible Loan-refer to note 6 of the financial Statements
Critical audit matter description
In order to raise funds, the company entered into a Securities Purchase Agreement (“SPA”) with an institutional investor for a private placement of senior secured convertible notes totaling up to an aggregate of $2,750,000 to be issued in three tranches subject to the achievement of certain milestones.
At this time a portion of the loan has been converted to common shares. While the loan is presented on the books as a liability, the company expects that the entire amount will be converted to share capital. If the lender were to request payment in kind the company would possibly not have sufficient to repay the loan, therefore we consider this a critical audit matter/
How the Critical Audit Matter was addressed in the Audit
-We evaluated whether it is reasonable to expect the loan to be converted to share capital or if the company will be required to pay cash
/s/ Weinstein International. C.P.A.
We have served as the Company's auditor since 2019.
Tel - Aviv, Israel
November 29, 2022
Conversion
The Convertible Notes are convertible at any time or times after the Issuance Date in whole or in part, at the option of the holders thereof, into shares of our common stock at a rate equal to the amount of principal, interest (if any) and unpaid late charges (if any), divided by a conversion price of $0.35 (subject to adjustment as provided in the Note, the "Conversion Price"). The Conversion Price has full ratchet antidilution protection upon any subsequent placement below the Conversion Price then in effect and is subject to standard adjustments in the event of any stock split, stock dividend, stock combination, recapitalization or other similar transaction. If the Company enters into any agreement to issue (or issue) any variable price securities, the holder has the additional right to substitute such variable price (or formula) for the Conversion Price.
Alternate Conversion
The holders of the Convertible Notes may alternatively convert all or any portion of the Convertible Notes at any time at an alternate conversion price equal to the lower of (i) the conversion price then in effect, and (ii) 80% of the price computed as the quotient of (i) the sum of the VWAP of our common stock for each of the two (2) trading days with the lowest volume weighted average price ("VWAP") of our common stock during the ten (10) consecutive trading day period ending and including the trading day immediately preceding the delivery or deemed delivery of the applicable notice of conversion divided by two (2) (the "Alternate Conversion Price").
In connection with the occurrence of Events of Default, the holders of the Convertible Notes will be entitled to convert all or any portion of the Convertible Notes at the Alternate Conversion Price.
Conversion Limitation and Exchange Cap
The holders of the Convertible Notes will not have the right to convert any portion of the Convertible Notes, to the extent that, after giving effect to such conversion, such holder (together with certain related parties) would beneficially own in excess of 4.99% of the shares of our common stock outstanding immediately after giving effect to such conversion. A holder may from time to time increase this limit to 9.99%, provided that any such increase will not be effective until the 61st day after delivery of a notice to the Company of such increase.
04/06/23 1:13 PM
