LAS VEGAS, Dec. 5, 2019 /CNW/ -- 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.
Forward-Looking Statements This press release may contain statements relating to future results or events, which are forward-looking statements. Words such as "expects", "intends", "plans", "may", "could", "should", "anticipates", "likely", "believes" and words of similar import may identify forward-looking statements. These statements are not historical facts, but instead represent only the Company's belief regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company's control. It is possible that the Company's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Further, information concerning the Company and its business, including factors that potentially could materially affect the Company's business and financial and other results, are contained in the Company's filings with the Securities and Exchange Commission, available at www.sec.gov. All forward-looking statements included in this press release are made only as of the date of this press release, and we do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur or of which we hereafter become aware.
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.
Contact Information Corporate: GB Sciences, Inc., 3550 West Teco Avenue, Las Vegas, NV 89118 866-721-0297, or Liz Bianco, Director of Publicity [email protected]