Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
FORM 10-Q
__________________________
(Mark One)
☒
|
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
For the transition period from __________ to ___________
Commission file number: 000-55462
|
GB SCIENCES, INC.
(Exact name of registrant as specified in its charter)
Nevada
(State or other Jurisdiction of Incorporation or organization)
|
|
59-3733133
(IRS Employer I.D. No.)
|
3550 W. Teco Avenue
Las Vegas, Nevada 89118
Phone: (866) 721-0297
(Address and telephone number of
principal executive offices)
N/A
(Former name, former address and former fiscal year, if changed
since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each Class |
Trading Symbol(s) |
Name of exchange on which registered |
None |
N/A |
N/A |
Indicate by check mark whether registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90
days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files).
☒ Yes ☐ No
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or an emerging growth company. See the
definitions of "large accelerated filer," "accelerated filer,"
"smaller reporting company," and "emerging growth company" in
Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company ☒
|
Emerging growth company ☐
|
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company
(as defined by Rule 12b-2 of the
Act). ☐ Yes ☒ No
There were 293,521,444 shares of common stock, par value $0.0001
per share, outstanding as of February 13, 2021.
PART I.
FINANCIAL INFORMATION
ITEM 1. Financial
Statements (Unaudited)
GB SCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
As of December 31,
|
|
|
As of March 31,
|
|
|
|
2020
|
|
|
2020
|
|
CURRENT ASSETS:
|
|
|
(unaudited) |
|
|
|
|
|
Cash and cash equivalents
|
|
$ |
771,064 |
|
|
$ |
2,406 |
|
Prepaid expenses and other current assets
|
|
|
40,225 |
|
|
|
18,776 |
|
Note receivable
|
|
|
- |
|
|
|
5,224,423 |
|
Current assets from discontinued operations
|
|
|
2,084,877 |
|
|
|
1,755,275 |
|
TOTAL CURRENT ASSETS
|
|
|
2,896,166 |
|
|
|
7,000,880 |
|
Property and equipment, net
|
|
|
28,150 |
|
|
|
37,821 |
|
Intangible assets, net of accumulated amortization of $28,968 and
$12,287 at December 31, 2020 and March 31, 2020, respectively
|
|
|
1,647,376 |
|
|
|
1,128,702 |
|
Long term assets from discontinued operations
|
|
|
5,677,156 |
|
|
|
6,185,465 |
|
TOTAL ASSETS
|
|
$ |
10,248,848 |
|
|
$ |
14,352,868 |
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$ |
1,456,695 |
|
|
$ |
1,913,049 |
|
Accrued interest
|
|
|
462,930 |
|
|
|
366,865 |
|
Accrued liabilities
|
|
|
1,110,525 |
|
|
|
813,618 |
|
Notes and convertible notes payable and line of credit, net of
unamortized discount of $0 and $608,580 at December 31, 2020 and
March 31, 2020, respectively
|
|
|
3,726,308 |
|
|
|
5,054,728 |
|
Indebtedness to related parties
|
|
|
331,895 |
|
|
|
586,512 |
|
Note payable to related party
|
|
|
- |
|
|
|
151,923 |
|
Income tax payable
|
|
|
827,546 |
|
|
|
592,982 |
|
Current liabilities from discontinued operations
|
|
|
1,115,379 |
|
|
|
1,406,080 |
|
TOTAL CURRENT LIABILITIES
|
|
|
9,031,278 |
|
|
|
10,885,757 |
|
Convertible notes payable, net of unamortized discount of $63,058
and $0 at December 31, 2020 and March 31, 2020, respectively |
|
|
283,942 |
|
|
|
- |
|
Long term liabilities from discontinued operations
|
|
|
3,429,704 |
|
|
|
3,555,605 |
|
TOTAL LIABILITIES
|
|
|
12,744,924 |
|
|
|
14,441,362 |
|
Commitments and contingencies (Note 8)
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' DEFICIT:
|
|
|
|
|
|
|
|
|
Common Stock, $0.0001 par value, 600,000,000 shares authorized,
283,819,453 and 275,541,602 outstanding at December 31, 2020 and
March 31, 2020, respectively
|
|
|
28,382 |
|
|
|
27,554 |
|
Additional paid-in capital
|
|
|
98,126,152 |
|
|
|
97,271,157 |
|
Accumulated deficit
|
|
|
(100,650,610 |
) |
|
|
(97,387,205 |
) |
TOTAL STOCKHOLDERS' DEFICIT
|
|
|
(2,496,076 |
) |
|
|
(88,494 |
) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
$ |
10,248,848 |
|
|
$ |
14,352,868 |
|
The accompanying unaudited notes are an integral part of these
unaudited condensed consolidated financial statements
GB SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
|
|
For the Three Months Ended December 31,
|
|
|
For the Nine Months Ended December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales revenue |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Cost of goods sold |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Gross profit |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
General and administrative expenses
|
|
|
670,311 |
|
|
|
1,472,937 |
|
|
|
1,677,482 |
|
|
|
4,555,633 |
|
LOSS FROM OPERATIONS
|
|
|
(670,311 |
) |
|
|
(1,472,937 |
) |
|
|
(1,677,482 |
) |
|
|
(4,555,633 |
) |
OTHER INCOME/(EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(167,120 |
) |
|
|
(277,813 |
) |
|
|
(1,249,994 |
) |
|
|
(942,750 |
) |
Loss on amendment to line of credit |
|
|
(650,000 |
) |
|
|
- |
|
|
|
(650,000 |
) |
|
|
- |
|
Gain/(loss) on extinguishment |
|
|
467,872 |
|
|
|
(92,796 |
) |
|
|
467,872 |
|
|
|
(216,954 |
) |
Gain on settlement of accounts payable |
|
|
372,415 |
|
|
|
- |
|
|
|
372,415 |
|
|
|
- |
|
Gain on deconsolidation |
|
|
- |
|
|
|
4,502,058 |
|
|
|
- |
|
|
|
4,502,058 |
|
Debt default penalty |
|
|
- |
|
|
|
- |
|
|
|
(286,059 |
) |
|
|
- |
|
Other income/(expense)
|
|
|
17,523 |
|
|
|
(127,059 |
) |
|
|
14,149 |
|
|
|
89,806 |
|
Total other income/(expense)
|
|
|
40,690 |
|
|
|
4,004,390 |
|
|
|
(1,331,617 |
) |
|
|
3,432,160 |
|
INCOME/(LOSS) BEFORE INCOME TAXES
|
|
|
(629,621 |
) |
|
|
2,531,453 |
|
|
|
(3,009,099 |
) |
|
|
(1,123,473 |
) |
Income tax expense
|
|
|
(206,690 |
) |
|
|
- |
|
|
|
(234,564 |
) |
|
|
- |
|
INCOME/(LOSS) FROM CONTINUING OPERATIONS
|
|
|
(836,311 |
) |
|
|
2,531,453 |
|
|
|
(3,243,663 |
) |
|
|
(1,123,473 |
) |
Gain/(loss) from discontinued operations
|
|
|
242,327 |
|
|
|
(1,547,306 |
) |
|
|
(2,479 |
) |
|
|
(3,359,868 |
) |
NET INCOME/(LOSS)
|
|
|
(593,984 |
) |
|
|
984,147 |
|
|
|
(3,246,142 |
) |
|
|
(4,483,341 |
) |
Net loss attributable to non-controlling interest
|
|
|
- |
|
|
|
(360,327 |
) |
|
|
- |
|
|
|
(738,107 |
) |
NET INCOME/(LOSS) ATTRIBUTABLE TO GB SCIENCES, INC.
|
|
$ |
(593,984 |
) |
|
$ |
1,344,474 |
|
|
$ |
(3,246,142 |
) |
|
$ |
(3,745,234 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) attributable to common stockholders of GB
Sciences, Inc. - basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$ |
(836,311 |
) |
|
$ |
2,531,453 |
|
|
$ |
(3,243,663 |
) |
|
$ |
(1,123,473 |
) |
Discontinued operations, net of non-controlling interest
|
|
|
242,327 |
|
|
|
(1,186,979 |
) |
|
|
(2,479 |
) |
|
|
(2,621,761 |
) |
Net income/(loss)
|
|
$ |
(593,984 |
) |
|
$ |
1,344,474 |
|
|
$ |
(3,246,142 |
) |
|
$ |
(3,745,234 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) attributable to common stockholders of GB
Sciences, Inc. - diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$ |
(836,311 |
) |
|
$ |
2,583,061 |
|
|
$ |
(3,243,663 |
) |
|
$ |
(1,123,473 |
) |
Discontinued operations, net of non-controlling interest
|
|
|
242,327 |
|
|
|
(1,186,979 |
) |
|
|
(2,479 |
) |
|
|
(2,621,761 |
) |
Net income/(loss)
|
|
$ |
(593,984 |
) |
|
$ |
1,396,082 |
|
|
$ |
(3,246,142 |
) |
|
$ |
(3,745,234 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) per common share – basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.00 |
) |
|
$ |
0.01 |
|
|
$ |
(0.01 |
) |
|
$ |
(0.00 |
) |
Discontinued operations, net of non-controlling interest |
|
|
0.00 |
|
|
|
(0.00 |
) |
|
|
(0.00 |
) |
|
|
(0.01 |
) |
Net income/(loss) |
|
$ |
(0.00 |
) |
|
$ |
0.01 |
|
|
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) per common share – diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.00 |
) |
|
$ |
0.00 |
|
|
$ |
(0.01 |
) |
|
$ |
(0.00 |
) |
Discontinued operations, net of non-controlling interest |
|
|
0.00 |
|
|
|
(0.00 |
) |
|
|
(0.00 |
) |
|
|
(0.01 |
) |
Net income/(loss) |
|
$ |
(0.00 |
) |
|
$ |
0.00 |
|
|
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - basic |
|
|
280,967,623 |
|
|
|
263,055,254 |
|
|
|
280,119,116 |
|
|
|
253,297,660 |
|
Weighted average common shares outstanding - diluted
|
|
|
280,967,623 |
|
|
|
325,790,554 |
|
|
|
280,119,116 |
|
|
|
253,297,660 |
|
The accompanying unaudited notes are an integral part of these
unaudited condensed consolidated financial statements
GB SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
|
|
Nine Months Ended December 31,
|
|
|
|
2020
|
|
|
2019
|
|
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$ |
(3,246,142 |
) |
|
$ |
(4,483,341 |
) |
Loss from discontinued operations
|
|
|
(2,479 |
) |
|
|
(3,359,868 |
) |
Net loss from continuing operations
|
|
|
(3,243,663 |
) |
|
|
(1,123,473 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
30,097 |
|
|
|
100,877 |
|
Stock-based compensation and modification expense
|
|
|
248,850 |
|
|
|
455,242 |
|
Compensation warrants issued |
|
|
- |
|
|
|
132,914 |
|
Amortization of debt discount and beneficial conversion feature
|
|
|
776,908 |
|
|
|
698,615 |
|
Interest expense on conversion of notes payable
|
|
|
- |
|
|
|
93,931 |
|
Loss on induced conversion |
|
|
- |
|
|
|
127,059 |
|
Amortization of discount on note receivable |
|
|
- |
|
|
|
(120,583 |
) |
Accrued interest income |
|
|
- |
|
|
|
(50,411 |
) |
ASC 842 Adjustment |
|
|
- |
|
|
|
(1,227 |
) |
Loss on amendment to line of credit |
|
|
650,000 |
|
|
|
- |
|
Loss/(gain) on extinguishment
|
|
|
(467,872 |
) |
|
|
216,954 |
|
Gain on settlement of accounts payable |
|
|
(372,415 |
) |
|
|
- |
|
Gain on deconsolidation |
|
|
- |
|
|
|
(4,502,058 |
) |
Debt default penalty
|
|
|
286,059 |
|
|
|
- |
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Prepaid expenses and other current assets
|
|
|
(21,449 |
) |
|
|
204,699 |
|
Accounts payable
|
|
|
20,961 |
|
|
|
485,774 |
|
Accrued expenses
|
|
|
319,407 |
|
|
|
169,096 |
|
Accrued interest
|
|
|
518,892 |
|
|
|
291,256 |
|
Deposits and other noncurrent assets |
|
|
- |
|
|
|
106,385 |
|
Income tax payable
|
|
|
234,564 |
|
|
|
- |
|
Indebtedness to related parties
|
|
|
(254,617 |
) |
|
|
- |
|
Net cash used in operating activities of continuing operations
|
|
|
(1,274,278 |
) |
|
|
(2,714,950 |
) |
Net cash provided by/(used in) operating activities of discontinued
operations
|
|
|
21,098 |
|
|
|
(1,533,341 |
) |
Net cash used in operating activities
|
|
|
(1,253,180 |
) |
|
|
(4,248,291 |
) |
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Proceeds from note receivable
|
|
|
5,051,923 |
|
|
|
- |
|
Acquisition of intangible assets
|
|
|
(326,000 |
) |
|
|
(91,862 |
) |
Net cash provided by/(used in) investing activities of continuing
operations
|
|
|
4,725,923 |
|
|
|
(91,862 |
) |
Net cash used in investing activities of discontinued
operations
|
|
|
(131,302 |
) |
|
|
(446,922 |
) |
Net cash provided by/(used in) investing activities
|
|
|
4,594,621 |
|
|
|
(538,784 |
) |
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock
|
|
|
- |
|
|
|
790,225 |
|
Gross proceeds from warrant exercises
|
|
|
249,807 |
|
|
|
1,069,975 |
|
Gross proceeds from convertible notes payable
|
|
|
300,000 |
|
|
|
2,630,000 |
|
Proceeds from Line of Credit |
|
|
375,000 |
|
|
|
- |
|
Principal payment of notes and convertible notes payable |
|
|
(3,156,014 |
) |
|
|
(26,664 |
) |
Principal payment of note payable to related party |
|
|
(151,923 |
) |
|
|
- |
|
Fees for issuance of note payable and convertible note payable
|
|
|
(34,500 |
) |
|
|
(175,000 |
) |
Brokerage fees for issuance of common stock and warrants
|
|
|
(24,983 |
) |
|
|
(175,628 |
) |
Net cash provided by/(used in) financing activities of continuing
operations
|
|
|
(2,442,613 |
) |
|
|
4,112,908 |
|
Net cash provided by/(used in) financing activities of discontinued
operations
|
|
|
(129,237 |
) |
|
|
529,412 |
|
Net cash provided by/(used in) financing activities
|
|
|
(2,571,850 |
) |
|
|
4,642,320 |
|
Net change in cash and cash equivalents
|
|
|
769,591 |
|
|
|
(144,755 |
) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
|
|
151,766 |
|
|
|
182,055 |
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
|
|
921,357 |
|
|
|
37,300 |
|
Less: cash and cash equivalents classified as discontinued
operations
|
|
|
(150,293 |
) |
|
|
(17,782 |
) |
CASH AND CASH EQUIVALENTS AT END OF PERIOD FROM CONTINUING
OPERATIONS
|
|
$ |
771,064 |
|
|
$ |
19,518 |
|
The accompanying unaudited notes are an integral part of these
unaudited condensed consolidated financial statements
GB SCIENCES, INC.
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
For the Nine Months
Ended December 31,
2020 and 2019
(unaudited)
|
|
Nine Months Ended December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Cash paid for interest |
|
$ |
241,014 |
|
|
$ |
451,040 |
|
Cash paid for income tax |
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
Non-cash transactions:
|
|
|
|
|
|
|
|
|
Accrued liabilities forgiven in connection with Wellcana Note
settlement |
|
$ |
172,500 |
|
|
$ |
- |
|
Depreciation capitalized in inventory (discontinued operations)
|
|
$ |
417,616 |
|
|
$ |
370,167 |
|
Accrued interest capitalized in convertible note principal |
|
$ |
223,094 |
|
|
$ |
- |
|
Property capitalized under operating leases
|
|
$ |
- |
|
|
$ |
182,624 |
|
Patent acquisition costs capitalized in intangible assets |
|
$ |
45,100 |
|
|
$ |
163,174 |
|
Stock options issued for services |
|
$ |
168,000 |
|
|
$ |
- |
|
Stock issued upon conversion of notes payable |
|
$ |
- |
|
|
$ |
525,000 |
|
Induced dividend from warrant exercises
|
|
$ |
17,263 |
|
|
$ |
267,525 |
|
Beneficial conversion feature on notes payable |
|
$ |
196,886 |
|
|
$ |
829,736 |
|
Cumulative effect of the new lease standard
|
|
$ |
- |
|
|
$ |
7,550 |
|
The accompanying unaudited notes are an integral part of these
unaudited condensed consolidated financial statements
GB SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY/(DEFICIT)
For the Three
Months Ended December 31, 2020 and 2019
(unaudited)
|
|
Shares
|
|
|
Amount
|
|
|
Additional Paid-In Capital
|
|
|
Accumulated Deficit
|
|
|
Non-Controlling Interest
|
|
|
Total
|
|
Balance at September 30, 2020
|
|
|
280,532,686 |
|
|
$ |
28,054 |
|
|
$ |
97,679,001 |
|
|
$ |
(100,056,626 |
) |
|
$ |
- |
|
|
$ |
(2,349,571 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise of warrants for stock |
|
|
3,286,767 |
|
|
|
328 |
|
|
|
88,415 |
|
|
|
- |
|
|
|
- |
|
|
|
88,743 |
|
Share based compensation expense |
|
|
- |
|
|
|
- |
|
|
|
191,500 |
|
|
|
- |
|
|
|
- |
|
|
|
191,500 |
|
Modification of employee options and warrants |
|
|
- |
|
|
|
- |
|
|
|
57,350 |
|
|
|
- |
|
|
|
- |
|
|
|
57,350 |
|
Beneficial conversion feature on notes payable |
|
|
|
|
|
|
|
|
|
|
46,886 |
|
|
|
- |
|
|
|
- |
|
|
|
46,886 |
|
Stock options issued for services |
|
|
|
|
|
|
|
|
|
|
63,000 |
|
|
|
- |
|
|
|
- |
|
|
|
63,000 |
|
Net loss
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(593,984 |
) |
|
|
- |
|
|
|
(593,984 |
) |
Balance at December 31, 2020
|
|
|
283,819,453 |
|
|
$ |
28,382 |
|
|
$ |
98,126,152 |
|
|
$ |
(100,650,610 |
) |
|
$ |
- |
|
|
$ |
(2,496,076 |
) |
|
|
Shares
|
|
|
Amount
|
|
|
Additional Paid-In Capital
|
|
|
Accumulated Deficit
|
|
|
Non-Controlling Interest
|
|
|
Total
|
|
Balance at September 30, 2019
|
|
|
255,345,019 |
|
|
$ |
25,535 |
|
|
$ |
95,333,271 |
|
|
$ |
(90,071,120 |
) |
|
$ |
9,027,977 |
|
|
$ |
14,315,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of stock for debt conversion
|
|
|
5,583,333 |
|
|
|
558 |
|
|
|
244,442 |
|
|
|
- |
|
|
|
- |
|
|
|
245,000 |
|
Exercise of warrants for stock
|
|
|
3,125,000 |
|
|
|
313 |
|
|
|
115,088 |
|
|
|
- |
|
|
|
- |
|
|
|
115,401 |
|
Issuance of stock for services |
|
|
2,500,000 |
|
|
|
250 |
|
|
|
213,750 |
|
|
|
- |
|
|
|
- |
|
|
|
214,000 |
|
Share based compensation expense
|
|
|
- |
|
|
|
- |
|
|
|
32,431 |
|
|
|
- |
|
|
|
- |
|
|
|
32,431 |
|
Issuance of stock for cash, net of issuance costs |
|
|
4,000,000 |
|
|
|
400 |
|
|
|
239,600 |
|
|
|
- |
|
|
|
- |
|
|
|
240,000 |
|
Beneficial conversion feature on notes payable
|
|
|
- |
|
|
|
- |
|
|
|
695,932 |
|
|
|
- |
|
|
|
- |
|
|
|
695,932 |
|
Contributions from non-controlling interest
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
40,000 |
|
|
|
40,000 |
|
Inducement dividend from warrant exercises
|
|
|
- |
|
|
|
- |
|
|
|
37,499 |
|
|
|
(37,499 |
) |
|
|
- |
|
|
|
- |
|
Induced note conversions
|
|
|
- |
|
|
|
- |
|
|
|
127,059 |
|
|
|
- |
|
|
|
- |
|
|
|
127,059 |
|
Deconsolidation of subsidiary |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(8,707,650 |
) |
|
|
(8,707,650 |
) |
Net loss
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,344,474 |
|
|
|
(360,327 |
) |
|
|
984,147 |
|
Balance at December 31, 2019
|
|
|
270,553,352 |
|
|
$ |
27,056 |
|
|
$ |
97,039,072 |
|
|
$ |
(88,764,145 |
) |
|
$ |
- |
|
|
$ |
8,301,983 |
|
The accompanying unaudited notes are an integral part of these
unaudited condensed consolidated financial statements
GB SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY/(DEFICIT)
For the Nine Months
Ended December 31,
2020 and 2019
(unaudited)
|
|
Shares
|
|
|
Amount
|
|
|
Additional Paid-In Capital
|
|
|
Accumulated Deficit
|
|
|
Non-Controlling Interest
|
|
|
Total
|
|
Balance at March 31, 2020
|
|
|
275,541,602 |
|
|
$ |
27,554 |
|
|
$ |
97,271,157 |
|
|
$ |
(97,387,205 |
) |
|
$ |
- |
|
|
$ |
(88,494 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise of warrants for stock, net of issuance costs
|
|
|
8,277,851 |
|
|
|
828 |
|
|
|
223,996 |
|
|
|
- |
|
|
|
- |
|
|
|
224,824 |
|
Share based compensation expense |
|
|
- |
|
|
|
- |
|
|
|
191,500 |
|
|
|
|
|
|
|
|
|
|
|
191,500 |
|
Modification of employee options and warrants |
|
|
- |
|
|
|
- |
|
|
|
57,350 |
|
|
|
- |
|
|
|
- |
|
|
|
57,350 |
|
Beneficial conversion feature on notes payable
|
|
|
- |
|
|
|
- |
|
|
|
196,886 |
|
|
|
- |
|
|
|
- |
|
|
|
196,886 |
|
Stock options issued for services |
|
|
- |
|
|
|
- |
|
|
|
168,000 |
|
|
|
- |
|
|
|
- |
|
|
|
168,000 |
|
Inducement dividend from warrant exercises
|
|
|
- |
|
|
|
- |
|
|
|
17,263 |
|
|
|
(17,263 |
) |
|
|
- |
|
|
|
- |
|
Net loss
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(3,246,142 |
) |
|
|
- |
|
|
|
(3,246,142 |
) |
Balance at December 31, 2020
|
|
|
283,819,453 |
|
|
$ |
28,382 |
|
|
$ |
98,126,152 |
|
|
$ |
(100,650,610 |
) |
|
$ |
- |
|
|
$ |
(2,496,076 |
) |
|
|
Shares
|
|
|
Amount
|
|
|
Additional Paid-In Capital
|
|
|
Accumulated Deficit
|
|
|
Non-Controlling Interest
|
|
|
Total
|
|
Balance at March 31, 2019
|
|
|
240,627,102 |
|
|
$ |
24,063 |
|
|
$ |
93,020,015 |
|
|
$ |
(84,743,836 |
) |
|
$ |
8,855,757 |
|
|
$ |
17,155,999 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of stock for debt conversion
|
|
|
7,583,333 |
|
|
|
758 |
|
|
|
524,242 |
|
|
|
- |
|
|
|
- |
|
|
|
525,000 |
|
Exercise of warrants for stock
|
|
|
12,574,750 |
|
|
|
1,257 |
|
|
|
964,620 |
|
|
|
- |
|
|
|
- |
|
|
|
965,877 |
|
Issuance of stock for services |
|
|
2,500,000 |
|
|
|
250 |
|
|
|
213,750 |
|
|
|
- |
|
|
|
- |
|
|
|
214,000 |
|
Share based compensation expense
|
|
|
- |
|
|
|
- |
|
|
|
241,242 |
|
|
|
- |
|
|
|
- |
|
|
|
241,242 |
|
Issuance of stock for cash, net of issuance costs
|
|
|
7,668,167 |
|
|
|
768 |
|
|
|
717,929 |
|
|
|
- |
|
|
|
- |
|
|
|
718,697 |
|
Beneficial conversion feature on notes payable
|
|
|
- |
|
|
|
- |
|
|
|
829,736 |
|
|
|
- |
|
|
|
- |
|
|
|
829,736 |
|
Contributions from non-controlling interest
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
590,000 |
|
|
|
590,000 |
|
Compensation warrants
|
|
|
- |
|
|
|
- |
|
|
|
132,914 |
|
|
|
- |
|
|
|
- |
|
|
|
132,914 |
|
Cancelled shares issued to consultant |
|
|
(400,000 |
) |
|
|
(40 |
) |
|
|
40 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Inducement dividend from warrant exercises
|
|
|
- |
|
|
|
- |
|
|
|
267,525 |
|
|
|
(267,525 |
) |
|
|
- |
|
|
|
- |
|
Induced note conversions |
|
|
- |
|
|
|
- |
|
|
|
127,059 |
|
|
|
- |
|
|
|
- |
|
|
|
127,059 |
|
Cumulative effect of the new lease standard
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(7,550 |
) |
|
|
- |
|
|
|
(7,550 |
) |
Deconsolidation of subsidiary |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(8,707,650 |
) |
|
|
(8,707,650 |
) |
Net loss
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(3,745,234 |
) |
|
|
(738,107 |
) |
|
|
(4,483,341 |
) |
Balance at December 31, 2019
|
|
|
270,553,352 |
|
|
$ |
27,056 |
|
|
$ |
97,039,072 |
|
|
$ |
(88,764,145 |
) |
|
$ |
- |
|
|
$ |
8,301,983 |
|
The accompanying unaudited notes are an integral part of these
unaudited condensed consolidated financial statements
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
Note 1 – Background and Significant Accounting
Policies
GB Sciences, Inc. (“the Company”, “GB Sciences”, “we”, “us”, or
“our”) seeks to be 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. The Company is engaged in the
research and development of cannabinoid medicines and plans to
produce cannabinoid therapies for the wellness markets based on its
portfolio of intellectual property.
Through its wholly owned Canadian subsidiary, GBS Global Biopharma,
Inc. (“GBSGB”), the Company is engaged in the research and
development of plant-based medicines, primarily cannabinoid
medicines, with virtual operations in North America and Europe.
GBSGB’s assets include a portfolio of cannabinoid medicine
intellectual property, critical research contracts, and key
supplier arrangements. GBSGB’s intellectual property covers a range
of conditions and several programs are in the pre-clinical animal
stage of development including Parkinson’s disease, neuropathic
pain, and cardiovascular therapeutic programs. GBSGB runs a lean
drug development program and takes effort to minimize expenses,
including personnel, overhead, and fixed capital expenses through
strategic partnerships with Universities and Contract Research
Organizations (“CROs”). GBSGB’s intellectual property portfolio
includes five USPTO issued patents, seven USPTO nonprovisional
patent applications pending in the US, and three provisional patent
applications in the US. In addition to the USPTO patents and patent
applications, the company has filed 29 patent applications
internationally to protect its proprietary technology.
Basis of Presentation
The accompanying unaudited interim condensed consolidated financial
statements of GB Sciences, Inc. (the “Company,” “We” or “Us”) have
been prepared in accordance with U.S. generally accepted accounting
principles (“U.S. GAAP”) for interim financial information and with
the instructions to Form 10-Q and Article 8 of Regulations S-X.
Accordingly, they do not include all of the information and
footnotes required by U.S. GAAP for complete financial statements.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the periods presented are
not necessarily indicative of the results that may be expected for
the year ending March 31, 2021. The balance sheet
at March 31,
2020 has been derived from the audited financial statements at
that date but does not include all of the information and footnotes
required by U.S. GAAP for complete financial statements. The
unaudited interim condensed consolidated financial statements
should be read in conjunction with the consolidated financial
statements and footnotes thereto included in the Company’s annual
report on Form 10-K for the year ended March 31,
2020.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Principles of Consolidation
We prepare our consolidated financial statements in accordance with
generally accepted accounting principles (GAAP) for the United
States of America. Our consolidated financial statements include
all operating divisions and majority-owned subsidiaries, reported
as a single operating segment, for which we maintain controlling
interests. Intercompany accounts and transactions have been
eliminated in consolidation. The ownership interest of
non-controlling participants in subsidiaries that are not wholly
owned is included as a separate component of equity. The
non-controlling participants’ share of the net loss is included as
“Net loss attributable to non-controlling interest” on the
unaudited consolidated statements of operations.
Use of Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. The
Company regularly evaluates estimates and assumptions related to
allowances for doubtful accounts, inventory valuation and standard
cost allocations, valuation of initial right-of-use assets and
corresponding lease liabilities, valuation of beneficial conversion
features in convertible debt, valuation of the assets and
liabilities of discontinued operations, stock-based compensation
expense, purchased intangible asset valuations, deferred income tax
asset valuation allowances, uncertain tax positions, litigation and
other loss contingencies. These estimates and
assumptions are based on current facts, historical experience and
various other factors that the Company believes to be reasonable
under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and
liabilities and the recording of costs and expenses that are not
readily apparent from other sources. The actual results the Company
experiences may differ materially and adversely from these
estimates.
Reclassifications
Certain reclassifications have been made to the comparative period
amounts to conform to the current period presentation. Certain
items on the unaudited balance sheets and statements of operations
and cash flows have been reclassified to conform with current
period presentation. The assets, liabilities, income/(loss), and
cash flows of GB Sciences Louisiana, LLC, GB Sciences Nevada, LLC,
GB Sciences Las Vegas, LLC, and GB Sciences Nopah, LLC have been
reclassified to discontinued operations due to the sale of the
Company's Louisiana cultivation and extraction facility (Note 10)
and the pending sale of the Company's Nevada cultivation and
extraction facilities (Note 11).
Discontinued Operations
Refer to Note 3.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Long-Lived Assets
We evaluate the carrying value of property and equipment if
impairment indicators are present or if other circumstances
indicate that impairment may exist under authoritative guidance.
The annual testing date is March 31. When management believes
impairment indicators may exist, projections of the undiscounted
future cash flows associated with the use of and eventual
disposition of property and equipment are prepared. If the
projections indicate that the carrying value of the property and
equipment are not recoverable, we reduce the carrying values to
fair value. These impairment tests are heavily influenced by
assumptions and estimates that are subject to change as additional
information becomes available. No indicators of impairment
were identified by the Company as of December 31,
2020.
Inventory
We value our inventory at the lower of the actual cost of our
inventory, as determined using the first-in, first-out method, or
its current estimated net realizable value. We periodically review
our physical inventory for excess, obsolete, and potentially
impaired items and reserve accordingly. Our reserve estimate for
excess and obsolete inventory is based on expected future use.
Beneficial Conversion Feature of Convertible Notes
Payable
The Company accounts for convertible notes payable in accordance
with the guidelines established by the Financial Accounting
Standards Board’s (“FASB”) Accounting Standards Codification
(“ASC”) Topic 470-20, Debt with Conversion and Other Options
and Emerging Issues Task Force (“EITF”) 00-27, “Application of
Issue No. 98-5 to Certain Convertible Instruments”. A
beneficial conversion feature (“BCF”) exists on the date a
convertible note is issued when the fair value of the underlying
common stock to which the note is convertible into is in excess of
the remaining unallocated proceeds of the note after first
considering the allocation of a portion of the note proceeds to the
fair value of any attached equity instruments, if any related
equity instruments were granted with the debt. In accordance with
this guidance, the BCF of a convertible note is measured by
allocating a portion of the note's proceeds to the warrants, if
applicable, and as a reduction of the carrying amount of the
convertible note equal to the intrinsic value of the conversion
feature, both of which are credited to additional paid-in-capital.
The Company calculates the fair value of warrants issued with the
convertible notes using the Black-Scholes valuation model and uses
the same assumptions for valuing any employee options in accordance
with ASC Topic 718 Compensation – Stock Compensation. The only
difference is that the contractual life of the warrants is
used.
The value of the proceeds received from a convertible note is then
allocated between the conversion features and warrants on a
relative fair value basis. The allocated fair value is recorded in
the financial statements as a debt discount (premium) from the face
amount of the note and such discount is amortized over the expected
term of the convertible note (or to the conversion date of the
note, if sooner) and is charged to interest expense.
Revenue Recognition
The FASB issued Accounting Standards Codification (“ASC”) 606 as
guidance on the recognition of revenue from contracts with
customers. Revenue recognition depicts the transfer of promised
goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in
exchange for those goods or services. The guidance also requires
disclosures regarding the nature, amount, timing and uncertainty of
revenue and cash flows arising from contracts with customers. The
guidance permits two methods of adoption: retrospectively to each
prior reporting period presented, or retrospectively with the
cumulative effect of initially applying the guidance recognized at
the date of initial application (the cumulative catch-up transition
method). The Company adopted the guidance on April 1, 2018 and
applied the cumulative catch-up transition method.
The Company’s only current revenue source (classified as
discontinued operations) is from sales of cannabis, a distinct
physical good. Under ASC 606, the Company is required to separately
identify each performance obligation resulting from its contracts
from customers, which may be a good or a service. A contract may
contain one or more performance obligations. All of the Company’s
contracts with customers, past and present, contain only a single
performance obligation, the delivery of distinct physical goods.
Because fulfillment of the company’s performance obligation to the
customer under ASC 606 results in the same timing of revenue
recognition as under the previous guidance (i.e. revenue is
recognized upon delivery of physical goods), the Company did not
record any material adjustment to report the cumulative effect of
initial application of the guidance.
NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Earnings/(loss) per Share
The Company’s basic loss per share has been calculated using the
weighted average number of common shares outstanding during the
period. The Company had 131,886,787 and 158,728,095 potentially
dilutive common shares at December 31,
2020 and March 31,
2020, respectively. However, such common stock equivalents were
not included in the computation of diluted net loss per share for
the three and nine months
ended December 31, 2020, and the nine months
ended December 31, 2019, as their inclusion would have been
anti-dilutive. The computation of diluted earnings per share for
the three months ended December 31, 2019, is as follows:
|
|
For the Three Months Ended December 31, 2019
|
|
Diluted EPS Computation
|
|
Income (Numerator)
|
|
|
Shares (Denominator)
|
|
|
Per-Share Amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from continuing operations available to common
stockholders
|
|
$ |
2,531,453 |
|
|
|
|
|
|
|
|
|
Plus: Income impact of assumed conversions
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense on convertible notes payable
|
|
|
51,608 |
|
|
|
|
|
|
|
|
|
Effect of assumed conversions
|
|
|
51,608 |
|
|
|
|
|
|
|
|
|
Income from continuing operations plus assumed
conversions
|
|
|
2,583,061 |
|
|
|
|
|
|
|
|
|
Net loss from discontinued operations available to common
stockholders
|
|
|
(1,186,979 |
) |
|
|
|
|
|
|
|
|
Net income available to common stockholders
|
|
$ |
1,396,082 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding
|
|
|
|
|
|
|
263,055,254 |
|
|
|
|
|
Plus: incremental shares from assumed conversions
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants
|
|
|
|
|
|
|
26,648,530 |
|
|
|
|
|
Convertible notes payable
|
|
|
|
|
|
|
36,086,770 |
|
|
|
|
|
Dilutive potential common shares
|
|
|
|
|
|
|
62,735,300 |
|
|
|
|
|
Adjusted weighted-average shares
|
|
|
|
|
|
|
325,790,554 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from continuing operations
|
|
$ |
2,583,061 |
|
|
|
325,790,554 |
|
|
$ |
0.00 |
|
Net loss from discontinued operations
|
|
$ |
(1,186,979 |
) |
|
|
325,790,554 |
|
|
$ |
(0.00 |
) |
Net income
|
|
$ |
1,396,082 |
|
|
|
325,790,554 |
|
|
$ |
0.00 |
|
NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
Recent Accounting Pronouncements
Recently Adopted Standards
In June 2016, the Financial Accounting Standards Board ("FASB")
issued Accounting Standards Update ("ASU") No. 2016-13, "Financial
Instruments—Credit Losses (Topic 326): Measurement of Credit Losses
on Financial Instruments" ("ASU 2016-13"). Financial
Instruments—Credit Losses (Topic 326) amends guideline on reporting
credit losses for assets held at amortized cost basis and
available-for-sale debt securities. For assets held at
amortized cost basis, Topic 326 eliminates the probable initial
recognition threshold in current GAAP and, instead, requires an
entity to reflect its current estimate of all expected credit
losses. The allowance for credit losses is a valuation
account that is deducted from the amortized cost basis of the
financial assets to present the net amount expected to be
collected. For available-for-sale debt securities, credit
losses should be measured in a manner similar to current GAAP,
however Topic 326 will require that credit losses be presented as
an allowance rather than as a write-down. ASU 2016-13 affects
entities holding financial assets and net investment in leases that
are not accounted for at fair value through net income. The
amendments affect loans, debt securities, trade receivables, net
investments in leases, off balance sheet credit exposures,
reinsurance receivables, and any other financial assets not
excluded from the scope that have the contractual right to receive
cash. The amendments in this ASU are effective for smaller
reporting companies for fiscal years beginning after December 15,
2022, including interim periods within those fiscal years. The
Company is currently evaluating the impact of this guidance on its
financial statements.
In August 2018, the Financial Accounting Standards Board (FASB)
issued Accounting Standards Update (ASU) 2018-13, “Fair Value
Measurement (Topic 820): Disclosure Framework-Changes to the
Disclosure Requirements for Fair Value Measurement.” This ASU
eliminates, adds and modifies certain disclosure requirements for
fair value measurements as part of its disclosure framework
project. The standard is effective for all entities for financial
statements issued for fiscal years beginning after December 15,
2019, and interim periods within those fiscal years. The Company
adopted the standard on April 1, 2020. The adoption of this
guidance did not have a material impact on the Company’s financial
statements.
All other newly issued but not yet effective accounting
pronouncements have been deemed either immaterial or not
applicable.
NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
Note 2 – Going Concern
The Company’s financial statements have been prepared assuming the
Company will continue as a going concern. The Company has sustained
net losses since inception, which have caused an accumulated
deficit of $(100,650,610)
at December 31,
2020. The Company had a working capital deficit of
$(6,135,112)
at December 31,
2020, net of working capital of $969,498
classified as discontinued operations, compared to $(3,884,877)
at March 31,
2020, net of working capital of $349,195
classified as discontinued operations. In addition, the Company has
consumed cash in its operating activities of $(1,253,180)
for the nine months
ended December 31, 2020, including $21,098
provided by discontinued operations, compared to $(4,248,291)
including $(1,533,341)
used in discontinued operations for the nine months
ended December 31, 2019. These factors, among others, raise
substantial doubt about the Company’s ability to continue as a
going concern.
Management has been able, thus far, to finance the losses through a
public offering, private placements and obtaining operating funds
from stockholders. The Company is continuing to seek sources of
financing. There are no assurances that the Company will be
successful in achieving its goals.
Furthermore, Management believes the COVID-19 pandemic may have a
significant impact on the Company's business. The pandemic presents
a risk to the global economy, and it is possible that it could have
an impact on the operations of the Company in the near term that
could materially impact the Company’s financials and ability to
continue as a going concern. Management has not been able to
measure the potential financial impact on the Company and continues
to monitor the impact of the pandemic closely, although the extent
to which the COVID-19 outbreak will impact our operations,
financing ability or future financial results is uncertain.
In view of these conditions, the Company’s ability to continue as a
going concern is dependent upon its ability to obtain additional
financing or capital sources, to meet its financing requirements,
and ultimately to achieve profitable operations. Management
believes that its current and future plans provide an opportunity
to continue as a going concern. The accompanying financial
statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the
amounts and classification of liabilities that may be necessary in
the event the Company is unable to continue as a going concern.
NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
Note 3 – Discontinued Operations
Discontinued operations comprise those activities that were
disposed of during the period or which were classified as held for
sale at the end of the period and represent a separate major line
of business or geographical area that can be clearly distinguished
for operational and financial reporting purposes. The Company has
included its subsidiaries GB Sciences Louisiana, LLC, GB Sciences
Nevada, LLC, GB Sciences Las Vegas, LLC, and GB Sciences Nopah, LLC
in discontinued operations due to the sale of the Company's
Louisiana cultivation and extraction facility (Note 10) and the
pending sale of the Company's Nevada cultivation and extraction
facilities (Note 11).
There were no assets and liabilities from discontinued operations
attributable to GB Sciences Louisiana, LLC at December 31,
2020 and March 31,
2020. The assets and liabilities associated with discontinued
operations included in our condensed consolidated balance sheets as
of December 31,
2020 and March 31,
2020 were as follows:
|
|
December 31, 2020
|
|
|
March 31, 2020
|
|
|
|
Continuing
|
|
|
Discontinued Nevada Subsidiaries
|
|
|
Total
|
|
|
Continuing
|
|
|
Discontinued Nevada Subsidiaries
|
|
|
Total
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$ |
771,064 |
|
|
$ |
150,293 |
|
|
$ |
921,357 |
|
|
$ |
2,406 |
|
|
$ |
149,360 |
|
|
$ |
151,766 |
|
Accounts receivable, net
|
|
|
- |
|
|
|
233,039 |
|
|
|
233,039 |
|
|
|
- |
|
|
|
117,967 |
|
|
|
117,967 |
|
Inventory, net
|
|
|
- |
|
|
|
1,662,473 |
|
|
|
1,662,473 |
|
|
|
- |
|
|
|
1,445,839 |
|
|
|
1,445,839 |
|
Prepaid and other current assets
|
|
|
40,225 |
|
|
|
39,072 |
|
|
|
79,297 |
|
|
|
18,776 |
|
|
|
42,109 |
|
|
|
60,885 |
|
Note receivable
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
5,224,423 |
|
|
|
- |
|
|
|
5,224,423 |
|
TOTAL CURRENT ASSETS
|
|
|
811,289 |
|
|
|
2,084,877 |
|
|
|
2,896,166 |
|
|
|
5,245,605 |
|
|
|
1,755,275 |
|
|
|
7,000,880 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
28,150 |
|
|
|
5,022,987 |
|
|
|
5,051,137 |
|
|
|
37,821 |
|
|
|
5,496,012 |
|
|
|
5,533,833 |
|
Intangible assets, net
|
|
|
1,647,376 |
|
|
|
571,265 |
|
|
|
2,218,641 |
|
|
|
1,128,702 |
|
|
|
571,264 |
|
|
|
1,699,966 |
|
Deposits and other noncurrent assets
|
|
|
- |
|
|
|
82,904 |
|
|
|
82,904 |
|
|
|
- |
|
|
|
91,504 |
|
|
|
91,504 |
|
Operating lease right-of-use assets, net
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
26,685 |
|
|
|
26,685 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$ |
2,486,815 |
|
|
$ |
7,762,033 |
|
|
$ |
10,248,848 |
|
|
$ |
6,412,128 |
|
|
$ |
7,940,740 |
|
|
$ |
14,352,868 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$ |
1,456,695 |
|
|
$ |
351,258 |
|
|
$ |
1,807,953 |
|
|
$ |
1,913,049 |
|
|
$ |
646,865 |
|
|
$ |
2,559,914 |
|
Accrued interest
|
|
|
462,930 |
|
|
|
39,644 |
|
|
|
502,574 |
|
|
|
366,865 |
|
|
|
30,787 |
|
|
|
397,652 |
|
Accrued expenses
|
|
|
1,110,525 |
|
|
|
103,559 |
|
|
|
1,214,084 |
|
|
|
813,618 |
|
|
|
74,394 |
|
|
|
888,012 |
|
Notes payable, net
|
|
|
3,726,308 |
|
|
|
485,000 |
|
|
|
4,211,308 |
|
|
|
5,054,728 |
|
|
|
480,000 |
|
|
|
5,534,728 |
|
Indebtedness to related parties
|
|
|
331,895 |
|
|
|
- |
|
|
|
331,895 |
|
|
|
586,512 |
|
|
|
- |
|
|
|
586,512 |
|
Note payable to related party
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
151,923 |
|
|
|
- |
|
|
|
151,923 |
|
Income tax payable
|
|
|
827,546 |
|
|
|
- |
|
|
|
827,546 |
|
|
|
592,982 |
|
|
|
- |
|
|
|
592,982 |
|
Finance lease obligations, current
|
|
|
- |
|
|
|
135,918 |
|
|
|
135,918 |
|
|
|
- |
|
|
|
166,769 |
|
|
|
166,769 |
|
Operating lease obligations, current
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
7,265 |
|
|
|
7,265 |
|
TOTAL CURRENT LIABILITIES
|
|
|
7,915,899 |
|
|
|
1,115,379 |
|
|
|
9,031,278 |
|
|
|
9,479,677 |
|
|
|
1,406,080 |
|
|
|
10,885,757 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible notes payable |
|
|
283,942 |
|
|
|
- |
|
|
|
283,942 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Operating lease obligations, long term
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
22,515 |
|
|
|
22,515 |
|
Finance lease obligations, long term
|
|
|
- |
|
|
|
3,429,704 |
|
|
|
3,429,704 |
|
|
|
- |
|
|
|
3,533,090 |
|
|
|
3,533,090 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
$ |
8,199,841 |
|
|
$ |
4,545,083 |
|
|
$ |
12,744,924 |
|
|
$ |
9,479,677 |
|
|
$ |
4,961,685 |
|
|
$ |
14,441,362 |
|
NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
Discontinued Operations - Revenues and Expenses
The revenues and expenses associated with discontinued operations
included in our condensed consolidated statements of operations for
the three and nine months
ended December 31, 2020 and 2019 were as follows:
|
|
For the Three Months Ended December 31,
|
|
|
|
2020
|
|
|
2019
|
|
|
|
Continuing
|
|
|
Discontinued
|
|
|
Total
|
|
|
Continuing
|
|
|
Discontinued
|
|
|
Total
|
|
Sales revenue
|
|
$ |
- |
|
|
$ |
1,015,464 |
|
|
$ |
1,015,464 |
|
|
$ |
- |
|
|
$ |
446,201 |
|
|
$ |
446,201 |
|
Cost of goods sold
|
|
|
- |
|
|
|
(596,362 |
) |
|
|
(596,362 |
) |
|
|
- |
|
|
|
(869,848 |
) |
|
|
(869,848 |
) |
Gross profit/(loss)
|
|
|
- |
|
|
|
419,102 |
|
|
|
419,102 |
|
|
|
- |
|
|
|
(423,647 |
) |
|
|
(423,647 |
) |
General and administrative expenses
|
|
|
670,311 |
|
|
|
77,064 |
|
|
|
747,375 |
|
|
|
1,472,937 |
|
|
|
937,804 |
|
|
|
2,410,741 |
|
INCOME/(LOSS) FROM OPERATIONS
|
|
|
(670,311 |
) |
|
|
342,038 |
|
|
|
(328,273 |
) |
|
|
(1,472,937 |
) |
|
|
(1,361,451 |
) |
|
|
(2,834,388 |
) |
OTHER INCOME/(EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(167,120 |
) |
|
|
(113,241 |
) |
|
|
(280,361 |
) |
|
|
(277,813 |
) |
|
|
(194,219 |
) |
|
|
(472,032 |
) |
Loss on amendment to line of credit |
|
|
(650,000 |
) |
|
|
- |
|
|
|
(650,000 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Gain/(loss) on extinguishment |
|
|
467,872 |
|
|
|
- |
|
|
|
467,872 |
|
|
|
(92,796 |
) |
|
|
- |
|
|
|
(92,796 |
) |
Gain on settlement of accounts payable |
|
|
372,415 |
|
|
|
15,972 |
|
|
|
388,387 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Gain on deconsolidation |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,502,058 |
|
|
|
- |
|
|
|
4,502,058 |
|
Debt default penalty |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Other income/(expense)
|
|
|
17,523 |
|
|
|
(2,442 |
) |
|
|
15,081 |
|
|
|
(127,059 |
) |
|
|
8,364 |
|
|
|
(118,695 |
) |
Total other income/(expense)
|
|
|
40,690 |
|
|
|
(99,711 |
) |
|
|
(59,021 |
) |
|
|
4,004,390 |
|
|
|
(185,855 |
) |
|
|
3,818,535 |
|
INCOME/(LOSS) BEFORE INCOME TAXES
|
|
|
(629,621 |
) |
|
|
242,327 |
|
|
|
(387,294 |
) |
|
|
2,531,453 |
|
|
|
(1,547,306 |
) |
|
|
984,147 |
|
Income tax expense
|
|
|
(206,690 |
) |
|
|
- |
|
|
|
(206,690 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
NET INCOME/(LOSS)
|
|
$ |
(836,311 |
) |
|
$ |
242,327 |
|
|
$ |
(593,984 |
) |
|
$ |
2,531,453 |
|
|
$ |
(1,547,306 |
) |
|
$ |
984,147 |
|
|
|
For the Nine Months Ended December 31,
|
|
|
|
2020
|
|
|
2019
|
|
|
|
Continuing
|
|
|
Discontinued
|
|
|
Total
|
|
|
Continuing
|
|
|
Discontinued
|
|
|
Total
|
|
Sales revenue
|
|
$ |
- |
|
|
$ |
2,830,932 |
|
|
$ |
2,830,932 |
|
|
$ |
- |
|
|
$ |
2,905,582 |
|
|
$ |
2,905,582 |
|
Cost of goods sold
|
|
|
- |
|
|
|
(1,947,225 |
) |
|
|
(1,947,225 |
) |
|
|
- |
|
|
|
(3,731,996 |
) |
|
|
(3,731,996 |
) |
Gross profit/(loss)
|
|
|
- |
|
|
|
883,707 |
|
|
|
883,707 |
|
|
|
- |
|
|
|
(826,414 |
) |
|
|
(826,414 |
) |
General and administrative expenses
|
|
|
1,677,482 |
|
|
|
447,885 |
|
|
|
2,125,367 |
|
|
|
4,555,633 |
|
|
|
1,950,541 |
|
|
|
6,506,174 |
|
INCOME/(LOSS) FROM OPERATIONS
|
|
|
(1,677,482 |
) |
|
|
435,822 |
|
|
|
(1,241,660 |
) |
|
|
(4,555,633 |
) |
|
|
(2,776,955 |
) |
|
|
(7,332,588 |
) |
OTHER INCOME/(EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(1,249,994 |
) |
|
|
(374,383 |
) |
|
|
(1,624,377 |
) |
|
|
(942,750 |
) |
|
|
(568,027 |
) |
|
|
(1,510,777 |
) |
Loss on amendment to line of credit |
|
|
(650,000 |
) |
|
|
- |
|
|
|
(650,000 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Gain/(loss) on extinguishment |
|
|
467,872 |
|
|
|
- |
|
|
|
467,872 |
|
|
|
(216,954 |
) |
|
|
- |
|
|
|
(216,954 |
) |
Gain on settlement of accounts payable |
|
|
372,415 |
|
|
|
15,972 |
|
|
|
388,387 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Gain on deconsolidation |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,502,058 |
|
|
|
- |
|
|
|
4,502,058 |
|
Debt default penalty
|
|
|
(286,059 |
) |
|
|
- |
|
|
|
(286,059 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Other income/(expense)
|
|
|
14,149 |
|
|
|
(79,890 |
) |
|
|
(65,741 |
) |
|
|
89,806 |
|
|
|
(14,886 |
) |
|
|
74,920 |
|
Total other income/(expense)
|
|
|
(1,331,617 |
) |
|
|
(438,301 |
) |
|
|
(1,769,918 |
) |
|
|
3,432,160 |
|
|
|
(582,913 |
) |
|
|
2,849,247 |
|
INCOME/(LOSS) BEFORE INCOME TAXES
|
|
|
(3,009,099 |
) |
|
|
(2,479 |
) |
|
|
(3,011,578 |
) |
|
|
(1,123,473 |
) |
|
|
(3,359,868 |
) |
|
|
(4,483,341 |
) |
Income tax expense
|
|
|
(234,564 |
) |
|
|
- |
|
|
|
(234,564 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
NET INCOME/(LOSS)
|
|
$ |
(3,243,663 |
) |
|
$ |
(2,479 |
) |
|
$ |
(3,246,142 |
) |
|
$ |
(1,123,473 |
) |
|
$ |
(3,359,868 |
) |
|
$ |
(4,483,341 |
) |
NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
Discontinued Operations - Revenues and Expenses
(continued)
The components of revenues and expenses associated with
discontinued operations included in our condensed consolidated
statements of operations for the three and nine months
ended December 31, 2020 and 2019 were as follows:
|
|
For the Three Months Ended December 31,
|
|
|
|
2020
|
|
|
2019
|
|
|
|
GB Sciences Louisiana, LLC
|
|
|
Nevada Subsidiaries
|
|
|
Total Discontinued Operations
|
|
|
GB Sciences Louisiana, LLC
|
|
|
Nevada Subsidiaries
|
|
|
Total Discontinued Operations
|
|
Sales revenue
|
|
$ |
- |
|
|
$ |
1,015,464 |
|
|
$ |
1,015,464 |
|
|
$ |
192,070 |
|
|
$ |
254,131 |
|
|
$ |
446,201 |
|
Cost of goods sold
|
|
|
- |
|
|
|
(596,362 |
) |
|
|
(596,362 |
) |
|
|
(193,915 |
) |
|
|
(675,933 |
) |
|
|
(869,848 |
) |
Gross profit/(loss)
|
|
|
- |
|
|
|
419,102 |
|
|
|
419,102 |
|
|
|
(1,845 |
) |
|
|
(421,802 |
) |
|
|
(423,647 |
) |
General and administrative expenses
|
|
|
- |
|
|
|
77,064 |
|
|
|