GB Sciences Announces the Sale of The Majority Interest in Nevada Cultivation Operations to Focus on Its First Two Cannabinoid-Based Medical Compounds for Parkinson's Disease and Neuropathic Pain
LAS VEGAS, Dec. 5, 2019 /PRNewswire/ -- GB Sciences, Inc. (OTCQB: GBLX) announced the execution of a Binding Letter of Intent for the Sale of 75% of its membership interests in the Company's Las Vegas, Nevada cultivation and production operation. This transaction will significantly reduce the Company's operating expenses, generate near-term working capital, and provide ongoing cashflow to enable the Company to focus solely on its biopharmaceutical and wellness assets.
The transaction is the next step in the Company's exit from cannabis cultivation and production. The Company is pivoting to focus all of its capital and efforts on advancing GBS Global Biopharma, Inc.'s scientific programs including its three patents, four patent applications and four provisional patent applications. This is in anticipation of interim data on the Parkinson's Disease animal studies expected later this month, which will be readying the Parkinson's formulation for a first-in-human trial. The Company is also developing a wellness business, utilizing its formulations for licensing as nutraceuticals and natural health supplements which allows earlier monetization of its patent portfolio.
At Closing, the $6 million sale of its interests in the Las Vegas operation shall include a $3 million cash payment and a $3 million promissory Note to GB Sciences with the opportunity to sell the remaining 25% interest to the Purchaser in 18 months from Closing. Due to the moratorium on license transfers in Nevada, a Closing date will be set when the moratorium is lifted. The Purchaser will immediately manage the Las Vegas facility relieving GB Sciences from those operational expenses, provide a $500,000 credit line to operations and GB Sciences shall benefit from any available cash flow. The Sale immediately eliminates $5.77 million of annual operating expenses and $5 million for construction to expand the facility's capacity to approximately 300% of its current output. After Closing, GB Sciences will continue to receive 25% of the net profits with none of the expenses.
Andrea Small-Howard, Chief Science Officer of GB Sciences, stated: "We think this transaction is important to the continued success of the Company and its shareholders. It will free-up capital to focus on our most valuable assets through continued development of clinical cannabis and wellness formulations for which the Company has filed numerous patents, progressing the research on our Parkinson's Disease and Chronic Neuropathic Pain formulations towards clinical trials and allowing us to build a robust portfolio of nutraceutical formulations for global licensing. The Company's pivot offers tremendous opportunity to create substantial shareholder value in this untapped segment of the cannabis sector."
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About GB Sciences, Inc.
GB Sciences, Inc. (OTCQB: GBLX) is a biopharmaceutical research and cannabinoid-based drug development company whose goal is to create patented formulations for safe, standardized, cannabinoid therapies that target a variety of medical conditions in both the pharmaceutical and wellness markets. To learn more about GB Sciences, Inc., go to: http://gbsciences.com.
Note: Although the Company's research and development activities are not illegal, the production and sale of cannabis products violate federal laws as they presently exist.
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SOURCE GB Sciences, Inc.
Company Codes: OTC-QB:GBLX, OTC-PINK:GBLX