CNBX Pharmaceuticals Inc. Enters into \$45,000 Non-Convertible Promissory Note with 3i L.P.

BETHESDA, MD, March 17, 2026 — CNBX Pharmaceuticals Inc. (the “Company”), a Nevada-based pharmaceutical research company, has announced the execution of a material financing agreement that could have significant implications for shareholders and the company’s strategic direction.

Key Highlights of the Report

• Entry into Material Definitive Agreement: On March 10, 2026, CNBX Pharmaceuticals executed a non-convertible promissory note with 3i L.P., a Delaware Limited Partnership, securing financing of \$45,000.
• Terms of the Note:
  • Principal Amount: \$45,000
  • Interest Rate: 5% simple interest per annum
  • Maturity Date: July 1, 2026
  • Use of Proceeds: The proceeds are earmarked for “immediate working capital purposes and expenditures.”
• Premium on Repayment: All payments under the note will include a 20% premium in addition to the interest, making the effective cost of capital higher than the stated interest rate.
• Early Repayment and Prepayment Provisions: The company may prepay the note with two days prior written notice. All payments will be made at 120% of the principal and interest due, and applied first to interest and then principal.
• Potential Acceleration Events (Events of Default): The note contains standard default provisions. If the company fails to pay principal or interest when due, files for bankruptcy, or faces certain adverse events, the entire outstanding amount (including premium and accrued interest) can become immediately due and payable.
• Equity Financing Conversion Clause: Although described as “non-convertible,” if CNBX enters into a future equity financing while the note is outstanding, the lender may elect to exchange the outstanding principal and accrued interest into equity at a 20% premium, based on the lowest price per share sold in the financing. This could lead to potential dilution for existing shareholders if triggered.
• Optional Redemption by Lender: In the event of future financings by the company, the lender may require up to 50% of the gross proceeds raised to be used for redeeming the outstanding balance of the note at a 20% premium plus accrued interest.
• Restrictions and Assignment: The note includes restrictions on transfer and assignment, as well as provisions for amendment only by written consent of both parties.
• Governing Law: The agreement is governed by the laws of the State of Delaware.
• Signed By: Eyal Barad, Director and CEO of CNBX Pharmaceuticals Inc.

Shareholder Considerations & Potential Price Sensitive Factors

• Working Capital Concerns: The company’s decision to take on this relatively small, short-term, high-premium debt for working capital suggests possible cash flow constraints. Investors should consider the implications for liquidity and ongoing operations.
• High Cost of Capital: The 20% repayment premium, in addition to the 5% interest, means the effective borrowing cost is substantial, which may reflect higher perceived risk by lenders or limited access to cheaper financing sources.
• Potential Equity Dilution: The lender’s option to exchange the note into equity at a discount in future financings could dilute existing shareholders if the company raises capital and the lender exercises this right.
• Acceleration and Default Provisions: Any material adverse event, or failure to meet obligations, could trigger acceleration of the loan, potentially leading to liquidity strain or forced asset sales.
• No Current Exchange Listing: The company does not list any securities registered under Section 12(b) of the Exchange Act, and no trading symbol or exchange is disclosed.

Additional Information

• The company is classified as an “emerging growth company.”
• No election has been made to use the extended transition period for complying with new or revised financial accounting standards.
• The full promissory note is filed as Exhibit 10.1 and details all terms and conditions.

Conclusion

This financing deal is a significant short-term development for CNBX Pharmaceuticals Inc. The use of debt with a high effective interest and premium for operating capital may be a red flag for some investors, indicating potential near-term financial stress. Additionally, the conversion and redemption features embedded in the agreement could result in share dilution or impact future fundraising flexibility.

Shareholders should closely monitor the company’s financial statements and future financing activities, as this agreement could have a material impact on share value, especially if further working capital needs arise or the company’s financial position deteriorates.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions. The author and publisher are not liable for any investment actions taken as a result of this information.

View CNBX Pharmaceuticals Inc. Historical chart here