GB SCIENCES, INC. The following discussion and analysis contains "forward-looking statements," as defined inthe United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "could", "expects", "plans", "intends", "anticipates", believes", "estimates", "predicts" or "continue", which list is not meant to be all-inclusive, and other such negative terms and comparable technology. These forward-looking statements, include, without limitation, statements about market opportunity, strategies, competition, expected activities and expenditures as we pursue business our plan, and the adequacy of available cash reserves. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect actual results. Additional factors that could materially affect these forward-looking statements and/or predictions include among other things:
(i) product demand, market and customer acceptance of any or all of the Company's products, equipment and other goods,
(ii) ability to obtain financing to expand its operations,
(iii) ability to attract and retain qualified personnel,
(iv) the results, cost and timing of our preclinical studies and clinical trials, including any delays to such clinical trials relating to enrollment or site initiation, as well as the number of required trials for regulatory approval and the criteria for success in such trials,
(v) our dependence on third parties in the conduct of our preclinical studies and clinical trials,
(vi) legal and regulatory developments in
(vii) the results of our preclinical studies and earlier clinical trials of our product candidates may not be predictive of future results and we may not have favorable results in our ongoing or planned clinical trials, (viii) the difficulties and expenses associated with obtaining and maintaining regulatory approval of our product candidates, and the indication and labeling under any such approval,
(ix) our plans and ability to develop and commercialize our product candidates,
(x) successful development of our commercialization capabilities, including sales and marketing capabilities, whether alone or with potential future collaborators,
(xi) the size and growth of the potential markets for our product candidates, the rate and degree of market acceptance of our product candidates and our ability to serve those markets,
(xii) the success of competing therapies and products that are or become available,
(xiii) our ability to limit our exposure under product liability lawsuits, shareholder class action lawsuits or other litigation,
(xiv) our ability to obtain and maintain intellectual property protection for our product candidates,
(xv) our ability to obtain and maintain third-party manufacturing for our product candidates on commercially reasonable terms,
(xvi) delays, interruptions or failures in the manufacture and supply of our product candidates,
(xvii) the performance of third parties upon which we depend, including third-party contract research organizations, or CROs, contract manufacturing organizations, or CMOs, contractor laboratories and independent contractors,
(xviii) the timing and outcome of current and future legal proceedings,
(xix) our ability to maintain proper functionality and security of our internal computer and information systems and prevent or avoid cyberattacks, malicious intrusion, breakdown, destruction, loss of data privacy or other significant disruption,
(xx) the adequacy of capital reserves and liquidity including, but not limited to, access to additional borrowing capacity,
(xxi) the extent to which health epidemics and other outbreaks of communicable diseases, including the ongoing COVID-19 pandemic, could disrupt our operations or materially and adversely affect our business and financial conditions, and (xxii) general industry and market conditions and growth rates, unexpected natural disasters, and other factors, which we have little or no control: and any other factors discussed in the Company's filings with theSecurities and Exchange Commission ("SEC").
The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this report.
The following discussion highlights the Company's results of operations and the principal factors that have affected our financial condition, as well as our liquidity and capital resources for the periods described and provides information that management believes is relevant for an assessment and understanding of the statements of financial condition and results of operations presented herein. The following discussion and analysis is based on the Company's unaudited financial statements contained in this Quarterly Report, which we have prepared in accordance withUnited States generally accepted accounting principles. You should read this discussion and analysis together with such financial statements and the related notes thereto. 20
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Table of Contents OverviewGB Sciences, Inc. ("the Company", "GB Sciences", "we", "us", or "our") is a plant-inspired, biopharmaceutical research and development company creating patented, disease-targeted formulations of cannabis- and other plant-inspired therapeutic mixtures for the prescription drug market through its wholly owned Canadian subsidiary,GbS Global Biopharma, Inc. ("GBSGB"). Through GBSGB, the Company is engaged in the research and development of plant-inspired medicines, with virtual operations inNorth America andEurope . GBSGB's assets include a portfolio of intellectual property containing both proprietary plant-inspired formulations and our AI-enabled drug discovery platform, as well as critical research contracts and key supplier arrangements. The Company's intellectual property portfolio, which is held by GBSGB, contains six issuedU.S. and three issued foreign patents, as well as 18 U.S. and 49 foreign patent-pending applications. OnOctober 14th, 2021 , we filed the nonprovisional USPTO patent application entitled "METHOD AND SYSTEMS FOR PHYTOMEDICINE ANALYTICS FOR RESEARCH OPTIMIZATION AT SCALE" to further protect aspects of our proprietary drug discovery engine, PhAROS™, which stands for Phytomedical Analytics for Research Optimization at Scale. OnMarch 1st, 2022 , the Company's newest patent was issued by theU.S. Patent and Trademark Office (USPTO) for a cannabinoid-containing mixture designed to treat cardiac hypertrophy, often present in advanced heart disease. The Company's newly issued patent also covers the use of these receptor-targeted formulations for the treatment of TRPV1-receptor associated hearing loss and urinary cystitis. GBSGB's intellectual property covers a range of over 65 medical conditions, from which five drug development programs are in the preclinical stage of drug development including our formulations for Parkinson's disease ("PD"), chronic pain, COVID-related cytokine release syndrome, depression/anxiety, and cardiovascular therapeutic programs. The Company's primary focus is on preparing its lead program for the treatment of the motor symptoms of Parkinson's disease for a first-in-human clinical trial. Depending on the results of ongoing preclinical studies, the Company intends to move forward with clinical trials for its chronic pain and COVID-related cytokine release syndrome therapies after PD. The Company's formulations for chronic pain, anxiety, and depression are currently in preclinical animal studies with researchers at theNational Research Council Canada . The Company also recently received positive preclinical proof-of-concept data supporting its complex mixtures for the treatment of Cytokine Release Syndrome related to COVID-19, and its lead candidates will be optimized based on late-stage preclinical studies atMichigan State University . Proof-of-concept studies in animals that support our heart disease formulations have been successfully completed at theUniversity of Hawaii . The Company runs a lean drug development program through GBSGB and takes effort to minimize expenses, including personnel, overhead, and fixed capital expenses through strategic partnerships with Universities and Contract Research Organizations ("CROs"). Our productive research and development network includes distinguished universities, hospitals, and Contract Research Organizations. OnApril 4, 2014 , we changed our name fromSignature Exploration and Production Corporation toGrowblox Sciences, Inc. EffectiveDecember 12, 2016 , the Company amended its Certificate of Corporation pursuant to shareholder approval, and the Company's name was changed fromGrowblox Sciences, Inc. toGB Sciences, Inc.
Effective
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Table of Contents Plan of Operation
Drug Discovery and Development of Novel Cannabis-Based Therapies
Through its wholly owned Canadian subsidiary,GBS Global Biopharma, Inc. ("GBSGB"), the Company has conducted ground-breaking research embracing the rational design of plant-inspired medicines led by Dr.Andrea Small-Howard , the Company's President, Chief Science Officer, and Director. In the early days, Small-Howard and Dr.Helen Turner , Vice President of Innovation and Dean of theNatural Sciences and Mathematics Department atChaminade University , posited that minimum essential mixtures of plant-based ingredients would provide more targeted and effective treatments for specific disease conditions than either single ingredient or whole plant formulations. They started with cannabis-based drug discovery and developed a rapid screening and assaying system that tested thousands of combinations of cannabinoids and terpenes in vitro against cell-based models of disease. This process identified precise mixtures of cannabinoids and terpenes, many of which contained no THC, to treat categories of disease conditions, including neurological disorders, inflammation, heart disease, metabolic syndrome, and chronic neuropathic pain. More recently, a similar approach has been applied to the discovery and validation of therapies informed by plants described in a variety ofTraditional Medical Systems . These rich discovery efforts have yielded new preclinical programs; for example, our anxiety and depression formulations that contain minimum essential mixtures of compounds derived from plants in the Piper plant family, such as kava. Currently, the Company's drug discovery engine involves both a data analytics/machine learning tool to expedite drug discovery and high throughput screening of cell and animal models of disease. As previously mentioned, the Company initially explored the potential medical uses of specific mixtures derived from cannabis-based raw materials, but our early in silico tools have now been improved, and they are becoming increasingly effective for investigating the medical applications of potential therapeutic mixtures from any plant-derived starting material. In 2014, the Company developed its first rapid screening and assaying system which tested thousands of combinations of cannabinoids and terpenes against cell-based models of diseases. This process has been refined over the years and now has identified precise mixtures of cannabinoids and terpenes, many of which contained no THC, to treat categories of disease conditions, including neurological disorders, inflammation, heart disease, metabolic syndrome, chronic and neuropathic pain. Through GBSGB, the Company has filed for patent protection on these plant-inspired, minimum essential mixtures, and they are validating them in disease-specific animal models in preparation for human trials. The Company's drug discovery process combines: 1) PhAROS™: Phytomedical Analytics for Research Optimization at Scale for the prediction of minimum essential mixtures from plant-based materials, and 2) HTS: high throughput screening to refine and validate plant-inspired, minimum essential mixtures in well-established cell and animal models of diseases. This combined approach to drug discovery increases research efficiency and accuracy reducing the time from ideation to patenting from 7 years to 1.5 years. The Company now uses its PhAROS™ Drug Discovery Platform to 'pre-validate' therapeutic mixtures. PhAROS can both prioritize and eliminate some potential combinations, which reduces time and resources used in the discovery period. PhAROS™ can also be used to identify and predict the efficacy of plant-inspired, minimum essential mixtures for specific diseases in silico, which are then tested by screening in cell and animal models. Screening of plant-inspired mixtures for drug discovery involves the testing of specific combinations of plant chemicals from many naturally occurring plants and the use of live models for these diseases that have been well established by other researchers. The Company refines the potential therapeutic mixtures pre-validated by PhAROS™ to optimize their effectiveness using cell and animal models. Based on data from disease-specific assays, therapeutic formulations are refined during the HTS screening process by removing compounds that do not act synergistically with the others in the mixtures. The goal is to identify minimum essential mixtures (MEM) that retain the efficacy of the whole plant extracts, but with the manufacturing and quality control advantages of single ingredient pharmaceutical products. In October of 2021, GBSGB began its first preclinical animal trial of non-cannabis-based formulations that were discovered and pre-validated using our PhAROS™ drug discovery platform.The National Research Council of Canada ("NRC") are testing the Company's proprietary, psychotropic plant-based formulas for the treatment of depression and anxiety. For these novel psychotropic drug candidates, the Company used the PhAROS™ platform to identify new ingredients to improve upon an initial formulation for anxiety based on traditional medicine. The original plant mixture was derived from the kava plant, but some elements of kava are thought to cause liver toxicity. PhAROS™ identified ingredients from the Piper plant family as a substitute for the functionality of the ingredients in question without the potentially adverse safety profiles of those original ingredients. The Piper plant family includes pepper plants that are used worldwide in traditional medicines. The Company's new psychotropic formulations are currently in preclinical trials at the Zebrafish Toxicology,Genomics and Neurobiology Lab at the NRC, led by Dr.Lee Ellis , Research Officer and Team Lead. The ongoing work between the NRC and the Company has produced strong and applicable data for the evaluation of its therapies, and this trial could provide novel treatment options for patients with depression and anxiety. TheU.S. Patent and Trademark Office allows complex mixtures to be claimed as Active Pharmaceutical Ingredients ("APIs"). Through GBSGB, the Company has six issued patents, plus a series of pending patents containing plant-derived complex mixtures and minimum essential mixtures that act as therapeutic agents for specific disease categories, as described below. The Company's pending patents are protected whether the individual compounds are derived from the cannabis plant, another plant, synthetically produced, or derived from a combination of sources for the individual chemical compounds in these mixtures. OnMarch 1st, 2022 , the Company's newest patent was issued by theU.S. Patent and Trademark Office (USPTO) for a cannabinoid-containing mixture designed to treat cardiac hypertrophy, often present in advanced heart disease. The Company's newly issued patent also covers the use of these receptor-targeted formulations for the treatment of TRPV1-receptor associated hearing loss and urinary cystitis. This year, our growing intellectual property portfolio was augmented with additional patent-protections for our PhAROS™ drug discovery platform, new PhAROS™ discovered, non-cannabis formulations, and improved formulations for our PD therapeutics. 22
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Table of Contents Drug Development Progress The Company has made significant strides in the past year with respect to both its drug discovery research and product development programs. The Company, through GBSGB, now has five preclinical phase product development programs and is aggressively preparing its lead formulations for the treatment of Parkinson's disease for a first-in-human clinical trial. Our lead program in Parkinson's disease is being prepared for a first-in-human trial through the following essential steps: a) creating clinical prototypes by combining our proprietary Parkinson's formulas with a convenient oral delivery system; b) performing a dose response study in rodents to establish the correct range of active ingredients for our first-in-human trial; c) performing necessaryADMET (Absorption, Distribution, Metabolism, Excretion, and Toxicology) tests on the clinical prototypes; and d) selecting a Contract Research Organization (CRO) to prepare an Investigational New Drug (IND) application to theUS FDA to begin our first-in-human trial. In addition to our work in preparing the Parkinson's formulation for a First-in-Human trial, the Company's chronic pain, anxiety, and depression formulations are currently in preclinical animal studies with Dr.Lee Ellis of theNational Research Council ("NRC")Canada inHalifax, Nova Scotia . We received positive preclinical, proof-of-concept data supporting our minimum essential mixtures for the treatment of Cytokine Release Syndrome in COVID-19 (COVID-CRS) and other severe hyperinflammatory conditions. GBSGB's lead COVID-CRS candidates will be optimized based on late-stage preclinical studies with Dr.Norbert Kaminski atMichigan State University . For the Company's lead program in PD therapeutics, the efficacy of our original formulations has been improved and the Company has filed a new patent application family to protect our defined cannabinoid ratio-minimum essential mixtures (DCR-MEMs) for the treatment of Parkinsonian motor symptoms. The Company had announced previously that it has obtained the statistically significant reduction of Parkinson's-disease like symptoms using proprietary cannabinoid-containing MEMs in an animal model of Parkinson's disease ("PD"). Three of the Company's PD formulations significantly reduced the PD-like motor symptoms. In addition, the toxicity studies for these original PD formulas came back without any significant negative findings. These initial efficacious PD formulations were equimolar minimum essential mixtures (E-MEMs), wherein, each contained three cannabinoids combined at an equimolar ratio (1:1:1). In the past year 2020-2021, the Company has screened an additional sixty-three variations of the original three equimolar MEMs and identified a total of twenty-two DCR-MEMs with optimized ratios of cannabinoids that produced a statistically significant reduction in OHDA induced motor symptoms. Five of these twenty-two efficacious MEMs outperformed the original equimolar cannabinoid MEMs. A new patent application has been filed to protect these DCR-MEMs. These important preclinical results will be included in GBS' Investigational New Drug ("IND") application with theUS FDA to enter human clinical trials as soon as possible. New therapies to address Parkinson's disease symptoms are needed to help those afflicted with this debilitating disease. The combined direct and indirect costs associated with Parkinson's disease are estimated at$52 billion in theU.S. alone. This year, we are working with Catalent Pharma on the preparation of clinical prototypes of our proprietary cannabinoid-based formulations for Parkinson's disease in Catalent Pharma's proprietary Zydis® delivery system. Catalent Pharma's Zydis® delivery system is an Orally Disintegrating Tablet format ("ODT") that should be ideal for delivering our cannabinoid-ratio controlled formulations to Parkinson's patients. More than 50% of Parkinson's patients have trouble swallowing, but the Zydis® format delivers the active ingredients into the mouth by dispersion without needing water or the ability to swallow. To ready the Company's Parkinson's disease therapies for a First-in-Human trial, the initial clinical prototypes of our Defined Cannabinoid Ratio (DCR)-MEM have been formulated by Catalent Pharma using Catalent's Zydis® Orally Disintegrating Tablet technology and they are being evaluated in stability and functional testing. As mentioned above, the ODT format was selected for the PD formulas because it dissolves on the tongues of patients without the need to swallow for ease of use in patients with PD, who often have difficulties with swallowing. Previously, the Company has completed two proof-of-concept studies for its MEM. Now, the Company is performing a Feasibility Study that will produce and validate the clinical prototypes for its DCR-MEM. The Company selected Catalent for the delivery of their PD therapies due to Catalent's prior experience in working onUS FDA -approved, cannabinoid-containing drugs, their Schedule I drug manufacturing facilities, their familiarity withUS FDA and international regulatory and manufacturing requirements, their expertise in tackling formulation challenges, and their ability to achieve the stability and dosing necessary for these novel therapeutic mixtures. In addition to its Zydis® technology, Catalent has early drug development services and additional oral drug delivery solutions available for the efficient delivery of the Company's proprietary APIs. 23
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Additionally, the Company has selected theUniversity of Lethbridge to start our required dose response study in a rodent model of Parkinson's disease, which will help us to establish the correct dosing for our first-in-human trial. Prior to filing our IND application, we must conductADMET testing on the clinical prototypes of our Parkinson's medication being formulated for us by Catalent Pharma. The Company has identified a Contract Research Organization that will perform theADMET testing. In the IND application for our novel Parkinson's disease therapy, theADMET testing data will be combined with the Chemistry Manufacturing and Controls (CMC) data prepared by Catalent Pharma and our proof-of-concept data (National Research Council Canada ). In the near future, we expect to announce the selection of the Contract Research Organization that will write the IND-application and run the first-in-human trials for our novel treatment for the motor symptoms of Parkinson's disease. For its lead chronic pain program, the Company is testing its MEM for chronic pain both as encapsulated, time-released nanoparticles, as well as in non-encapsulated forms of these therapeutic mixtures in an animal model at the NRC inHalifax, Nova Scotia . In preparation for human clinical trials, our standard MEM and the time-released MEM are currently being compared in an animal model that demonstrates their potential effectiveness at treating chronic pain. The early results from this preclinical research project look very promising. However, the COVID pandemic adversely affected the progress on this study, but we are happy to report that we are back on track to continue with the testing of these promising chronic pain formulations. In late summer of 2021, the Company received positive proof-of-concept data from a human immune cell model supporting the efficacy of their proprietary MEM designed for the suppression of COVID-related, cytokine release syndromes (CRS) while preserving key anti-viral immune responses. Based on this new positive proof-of-concept data, GBSGB converted their provisional patent application entitled, "CANNABINOID-CONTAINING COMPLEX MIXTURES FOR THE TREATMENT OF CYTOKINE RELEASE SYNDROME WHILE PRESERVING KEY ANTI-VIRAL IMMUNE REACTIONS" to a nonprovisional patent application onAugust 18, 2021 . The best performing MEM will be further developed in preparation for clinical studies to evaluate their anti-inflammatory potential in the treatment of severely ill COVID-19 patients contending with Cytokine Release Syndrome (CRS) and associated hyperinflammatory conditions, such as macrophage activation syndrome (MAS) and acute respiratory distress syndrome (ARDS). CRS, MAS, and ARDS are the leading causes of deaths in COVID-19 patients. The Company's proof-of-concept study was performed atMichigan State University using a state-of-the-science human immune model. In the Company's proof-of-concept study, immune cells from human donors were co-cultured together in one of four treatment groups: untreated (no inflammatory stimulus), inflammatory stimulus, control (inflammatory stimulus + vehicle from cannabinoid mixtures), or pre-treatment with the cannabinoid mixture + inflammatory stimulus. Then a panel of cytokines and inflammatory markers was measured from each of these treatment groups from different immune cell types within the co-cultured cells at four time points to determine whether the Company's MEMs were able to alter the levels of pro-inflammatory cytokines or other inflammatory agents. The Company's COVID-CRS formulations showed potential for the selective inhibition of pro-inflammatory processes in response to viral- and bacterial-triggered hyperinflammation in a human immune cell model. These positive proof-of-concept results support the potential for some of these mixtures to accomplish our therapeutic goals, but, ultimately, clinical trial results will determine whether they are efficacious. The Company's plant-based drug discovery platform is advancing biopharmaceutical research at a time when thousands are dying from COVID-19. The next step is to further develop our plant-inspired drugs and eventually bring them to human trials so that the use of well-defined cannabinoid mixtures in clinical practice can become a reality. 24
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As mentioned above, the Company announced that the NRC Canada is testing our proprietary, psychotropic plant-based formulas for the treatment of depression and anxiety in preclinical animal studies. The Company has leveraged its patent-pending PhAROS™ (Phytomedical Analytics for Research Optimization at Scale) platform to identify these combinations of plant compounds for novel drug candidates to treat depression and anxiety. These are the company's first non-cannabis formulations to enter preclinical studies. For these novel psychotropic drug candidates, the Company used the PhAROS™ platform to identify new ingredients to improve upon an initial formulation for anxiety based on traditional medicine. The original plant mixture was derived from the kava plant, but some elements of kava are thought to cause liver toxicity. PhAROS™ identified ingredients from the Piper plant family as a substitute for the functionality of the ingredients in question without the potentially adverse safety profiles of those original ingredients. The Piper plant family includes pepper plants that are used worldwide in traditional medicines. The Global Anxiety Disorder and Depression Treatment Market size is forecast to reachUSD 19.81 Billion by 2028 according to Reports & Data. Favorable Research Updates from our university collaborators reveal the promise in our discovery programs including: 1) Multiple MEM discovery projects using and advancing our proprietary PhAROS™ drug discovery platform in conjunction withChaminade University , 2) theCompany's Cannabis Metabolomics Project with bothChaminade University ofHonolulu , Hawai'i and theUniversity of Athens, Greece , and 3) the Company's Time-Released Nanoparticles for Delivery of Cannabis-based Ingredients with theUniversity of Seville, Spain and theUniversity of Cadiz, Spain . This year, our growing intellectual property portfolio was augmented with additional patent-protections for our PhAROS™ drug discovery platform that were filed in July of 2021 and in October of 2021. The Company, through GBSGB, also filed for protection of new PhAROS™ discovered, non-cannabis formulations in July of 2021. In September of 2021, the Company filed a patent application for the Company's improved DCR-MEM formulations for our PD therapeutic program. These new patent applications expanded upon the solid foundation of intellectual property developed over the past six years. In 2020, the three patents which protect formulations for the Company's lead therapeutic programs were issued by the USPTO. The issuance ofU.S. Patent No. 10,653,640 entitled "Cannabinoid-Containing Complex Mixtures for the Treatment of Neurodegenerative Diseases" onMay 19, 2020 protects methods of using GBSGB's proprietary cannabinoid-containing complex mixtures (CCCM™) for treating Parkinson's Disease. This was an important milestone in the development of these vitally important therapies and validates GBSGB's drug discovery platform. In the US alone, the combined direct and indirect costs associated with Parkinson's disease are estimated at$52 billion , and new therapies to address Parkinson's disease symptoms are greatly needed. This was also the first time that a US patent has been awarded for a cannabis-based complex mixture defined using this type of drug discovery method. The first US patent for PD therapies validated our drug discovery platform and strengthened our intellectual property portfolio of unique CCCM's™, each targeting one of up to 60 specific clinical applications. The issuance of the Company's second and third US patents for active pharmaceutical ingredients that are complex mixtures identified by our biotech platform further confirmed that the Company's pharmaceutical compositions can be patent protected for use as biopharmaceutical and nutraceutical products. The US Patent entitled "Myrcene-Containing Complex Mixtures Targeting TRPV1" protects methods of using our proprietary MEMs for the treatment of pain disorders related to arthritis, shingles, irritable bowel syndrome, sickle cell disease, and endometriosis. In the US alone, chronic pain represents an estimated health burden of between$560 and$650 billion dollars , and an estimated 20.4% ofU.S. adults suffer from chronic pain that significantly decreases their quality of life. Despite the widespread rates of addiction and death, opioids remain the standard of care treatment for most people with chronic pain. The Company believes that it is important to create safer, less addictive alternatives to opioids for the treatment of chronic pain disorders, like GBSGB's myrcene-containing MEMs. The Company's third issued US Patent entitled "Cannabinoid-Containing Complex Mixtures for the Treatment of Mast-Cell-Associated or Basophil-Mediated Inflammatory Disorders" protects methods of using the Company's proprietary MEMs for treating Mast Cell Activation Syndrome (MCAS). MCAS is a severe immunological condition in which mast cells inappropriately and excessively release inflammatory mediators, resulting in a range of severe chronic hyperinflammatory symptoms and life-threatening anaphylaxis attacks. Receiving this patent for the treatment of MCAS using our MEMs is an important milestone in the development of this urgently needed medicine. There is no single recommended treatment for MCAS patients. Instead, they attempt to manage MCAS symptoms primarily by avoiding 'triggers' and using rescue medicines for their severe hyperinflammatory attacks. Therefore, MCAS patients need new therapeutic options to control their mast cell related symptoms, and our MEMs were designed to simultaneously control multiple inflammatory pathways within mast cells as a comprehensive treatment option. The Company is strategically targeting MCAS for two additional reasons. By focusing on a rare disease with no known cure, our company can apply for theU.S. Food and Drug Administration's expedited approval process, which allows clinically successful treatments to get to market both quicker and more cost effectively. Gaining approval from theUS FDA for the entire anti-inflammatory market would be extremely time consuming and cost prohibitive. Demonstrating that our MEMs are safe for the treatment of MCAS would favorably position our Company for clinical testing of these MEMs as potential treatments for other related inflammatory disorders, such as inflammatory bowel disease, thereby widening the target market and drastically shortening the development cycle and costs. The Company's fourth US Patent was issued onMarch 1, 2022 for a cannabinoid-containing mixture designed to treat cardiac hypertrophy, often present in advanced heart disease.Gb Sciences' newly issued patent also covers the use of these receptor-targeted formulations for the treatment of TRPV1-receptor associated hearing loss and urinary cystitis. Despite multiple categories of prescription heart medications on the market, heart disease remains the leading cause of death inthe United States for people of most racial and ethnic groups. Alternative therapeutic approaches are still needed, especially for the treatment of advanced heart disease. The market for prescription heart disease medications is predicted to rise to$64 billion dollars in the US by 2026, with future market growth fueled by innovative new therapeutic approaches. 25
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Intellectual Property Portfolio
GBSGB retained Fenwick & West, aSilicon Valley based law firm focusing on life sciences and high technology companies with a nationally top-ranked intellectual property practice, to develop strategies for the protection of the Company's intellectual property. The status of the intellectual property portfolio is as follows. Unless otherwise indicated, all patents listed below are assigned to the Company's wholly owned subsidiary,GBS Global Biopharma, Inc. Issued Patents
Title: CANNABINOID-CONTAINING COMPLEX MIXTURES FOR THE TREATMENT OF NEURODEGENERATIVE DISEASES
U.S. Patent Number: 10,653,640 Expiration date: October 23, 2038 Issued: May 19, 2020 Inventors: Andrea Small-Howard et al.
Title: MYRCENE-CONTAINING COMPLEX MIXTURES TARGETING TRPV1
U.S. Patent
Number: 10,709,670 Expiration date: May 22, 2038
Issued: July 14,
2020 Inventors: Andrea Small-Howard, et al.
GBSGB's MCCMs are protected in the
Title: CANNABINOID-CONTAINING COMPLEX MIXTURES FOR THE TREATMENT OF MAST CELL-ASSOCIATED OR BASOPHIL-MEDIATED INFLAMMATORY DISORDERS
U.S. Patent Number: 10,857,107 Expiration date: January 31, 2038 Issued: December 8, 2020 Inventors: Andrea Small-Howard et al.
Title: TRPV1 ACTIVATION-MODULATING COMPLEX MIXTURES OF CANNABINOIDS AND/OR TERPENES
U.S. Patent 11,260,044 Expiration Number: date: January 31, 2038 Issued: March 1, Andrea Small-Howard et 2022 Inventors: al.
Title: METHODS AND COMPOSITIONS FOR PREVENTION AND TREATMENT OF CARDIAC HYPERTROPHY
Inventor: Alexander
Stokes Assignee: University of Hawai'i
U.S. Patent
Number: 9,084,786 Issued: July 21, 2015
U.S. Patent
Number: 10,137,123 Issued: November 27, 2018
E.U. Patent
Number: 2,635,281 Issued: March 14, 2018
Hong Kong
Patent Number: 14102182.8 Issued: March 14, 2018
GBSGB has sublicensed from Makai Biotechnology, LLC these two issued USPTO patents and two issued
international patents for the prevention and treatment of heart failure due to cardiac
hypertrophy through therapeutic regulation of TRPV1.
Title: METHOD FOR PRODUCING A PHARMACEUTICAL COMPOSITION OF POLYMERIC NANOPARTICLES FOR TREATING NEUROPATHIC PAIN CAUSED BY PERIPHERAL NERVE COMPRESSION
Spain Patent ES2582287 Inventors: Lucia Martin Banderas, Mercedes
Number: Fernandez Arevalo, Esther Berrocoso
Dominguez, Juan Antonio Mico Segura
Issued: September Assignees: Universidad de
29, 2017 Cadiz, Centro de Investigacion
Biomedica En Red
Exclusive worldwide license held by GBS Global Biopharma, Inc. Claims benefit of Spanish Patent
Application No. P201500129 (Pub. No. ES 2582287). GBSGB holds the exclusive rights to
commercialize these cannabinoid-containing, time-released, oral nanoparticles for the treatment
of neuropathic pain.
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In addition to the issued patents listed above, GBSGB's intellectual property
portfolio includes a total of 14 USPTO and 41 international patents pending:
Other
International
Application Applications
Title Jurisdiction Number Filed Continuation of
CANNABINOID-CONTAINING COMPLEX US USPTO 16/844,713 AU, CA, CN, 15/729,565
MIXTURES FOR THE TREATMENT OF PCT/US2017/055989 EP, HK, IL, JP
NEURODEGENERATIVE DISEASES
MYRCENE-CONTAINING COMPLEX US USPTO 16/878,295 AU, CA, CN, 15/986,316
MIXTURES TARGETING TRPV1 PCT/US2018/033956 EP, HK, IL, JP
CANNABINOID-CONTAINING COMPLEX US USPTO 17/065,400 AU, CA, CN, 15/885,620
MIXTURES FOR THE TREATMENT OF PCT/US2018/016296 EP, HK, IL, JP
MAST CELL-ASSOCIATED OR
BASOPHIL-MEDIATED INFLAMMATORY
DISORDERS
TRPV1 ACTIVATION-MODULATING US USPTO 16/420,004 AU, CA, CN,
COMPLEX MIXTURES OF CANNABINOIDS PCT/US2019/033618 EP, HK, IL, JP AND/OR TERPENES THERAPEUTIC NANOPARTICLES US USPTO 16/686,069 ENCAPSULATING TERPENOIDS AND/OR PCT/ES2019/070765
CANNABINOIDS
TREATMENT OF PAIN USING US USPTO 16/914,205
ALLOSTERIC MODULATOR OF TRPV1 PCT/US2020/039989
CANNABINOID-CONTAINING COMPLEX US USPTO 63/067,269
MIXTURES FOR THE TREATMENT OF (provisional)
CHRONIC INFLAMMATORY DISORDERS
CANNABINOID-CONTAINING COMPLEX US USPTO 17/406,035
MIXTURES FOR THE TREATMENT OF PCT/US2021/046584
CYTOKINE RELEASE SYNDROME WHILE
PRESERVING KEY ANTI-VIRAL IMMUNE
REACTIONS
IN SILICO META-PHARMACOPEIA US USPTO 17/501,498
ASSEMBLY FROM NON-WESTERN MEDICAL PCT/US2021/055056
SYSTEMS USING ADVANCED DATA
ANALYTIC TECHNIQUES TO IDENTIFY
AND DESIGN PHYTOTHERAPEUTIC
STRATEGIES
METHODS AND COMPOSITIONS FOR EU EPO 3,348,267 IN, CN
PREVENTION AND TREATMENT OF
CARDIAC HYPERTROPHY
METHOD FOR PRODUCING A WIPO/PCT WIPO 2016/128591 EU, CA
PHARMACEUTICAL COMPOSITION OF PCT/ES2016/000016
POLYMERIC NANOPARTICLES FOR
TREATING NEUROPATHIC PAIN CAUSED
BY PERIPHERAL NERVE COMPRESSION
CANNABINOID-CONTAINING US USPTO 63/249,482
FORMULATIONS FOR PARKINSONIAN (provisional)
MOVEMENT DISORDERS
METHODS AND COMPOSITIONS FOR THE US USPTO 63/221,334
IDENTIFICATION OF NOVEL (provisional)
THERAPEUTIC APPROACHES TO
MIGRAINE USING THE PHAROS IN
SILICO DRUG DISCOVERY PLATFORM
METHOD AND COMPOSITIONS FOR THE US USPTO 63/221,358
PHYTOMEDICAL COMPONENT SUPPLY (provisional)
CHAIN DECISION SUPPORT USING THE
PHAROS IN SILICO DRUG DISCOVERY
PLATFORM
METHODS AND COMPOSITIONS FOR US USPTO 63/221,364
NOVEL PAIN THERAPIES INCLUDING (provisional)
OPIOID-ALTERNATIVE STRATEGIES
IDENTIFIED USING THE PHAROS IN
SILICO DRUG DISCOVERY PLATFORM
METHODS AND COMPOSITIONS FOR US USPTO 63/221,366
NOVEL PAIN THERAPIES TARGETED TO (provisional)
SPECIFIC PAIN SUBTYPES IDENTIFIED
USING THE PHAROS IN SILICO DRUG
DISCOVERY PLATFORM
METHODS AND COMPOSITIONS US USPTO 63/221,367
DEVELOPMENT OF NOVEL THERAPEUTICS (provisional)
BASED ON PIPER SPECIE-CONTAINING
PHYTOMEDICINES FOR ANXIETY AND
ASSOCIATED DISORDERS USING THE
PHAROS IN SILICO DRUG DISCOVERY
PLATFORM
METHODS AND COMPOSITIONS FOR US USPTO 63/221,371
DECONVOLUTION OF COMPLEX (provisional)
PHYTOMEDICAL FORMULAE FOR CANCER
TO IDENTIFY TARGETED STRATEGIES
FOR CANCER PAIN AND CYTOTOXIC
THERAPEUTIC CANDIDATES USING THE
PHAROS IN SILICO DRUG DISCOVERY
PLATFORM
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Table of Contents
Partnering Strategy
The Company runs a lean drug development program and minimizes expenses,
including personnel, overhead, and fixed capital expenses (such as lab and
diagnostic equipment), through strategic partnerships with universities,
hospitals, suppliers, Contract Research Organizations ("CROs"), and Contract
Manufacturing Organizations ("CMOs"). Through these research and development
agreements, the Company has created a virtual pipeline for the further
development of novel medicines based on ingredients originally derived from the
cannabis plant and other plant-based traditional medicines. The partners bring
both expertise and infrastructure at a reasonable cost to the life sciences
program. In most instances, the Company has also negotiated with these partners
to keep 100% of the ownership of the IP within GBSGB for original patent
filings.
The Company currently has on-going research agreements with the following institutions covering the indicated areas of research:
Chaminade University : Broad-based research program to support the drug discovery platform that has yielded many of the Company's original patents to date in the areas of neurodegenerative diseases, heart disease, inflammatory diseases, neuropathic and chronic pain. They have also performed the bioassay portion of the Cannabis Metabolomics study performed with theUniversity of Athens, Greece and the Company. Our collaborations with Chaminade also led to the development of our PhAROS™ drug discovery platform.University of Athens : Broad-based metabolomics analysis of over 100 cannabis genotypes including both hemp and THC-producing cannabis varieties, in combination with the Company's bioassay data linking genotypes and potential disease-remediations. This project has the potential to define active ingredients from plant-derived mixtures beyond the standard cannabinoids and terpenoids. The discovery potential is huge, and novel agents have recently been discovered. Novel ligands have been identified and are being validated. This project will ultimately yield novel patent-protected therapies.Michigan State University : Preclinical work using a cutting-edge, multi-cellular model of the human immune system and a multi-cell model of the brain to validate our MEMs for use in the treatment of COVID-19-related cytokine release syndromes (COVID-CRS). MSU has performed experiments using their novel model of the human-immune system that have allowed GBSGB to prepare cannabis-based formulas for the potential treatment of virally-induced hyperinflammation/cytokine storm syndrome that has led to the majority of COVID-19 deaths. Positive proof-of-concept results have guided the development of these selectively anti-inflammatory MEM.The University of Seville : Bringing their novel expertise to the development and functional testing of time-released and disease-targeted nanoparticles of cannabis-based minimum essential mixtures for oral administration. These specialized nanoparticles are being used for the precise and time-released delivery of several of our therapies, including the Company's chronic pain MEMs used in the preclinical animal testing performed at the NRC Canada.The University of Seville has completed functional testing on nanoparticles containing myrcene, nerolidol, and beta-caryophyllene for our chronic pain MEMs. In cell-based assays, the effectiveness and kinetics of the nanoparticle-forms of these terpenes were compared with the "naked" terpenes both individually and in mixtures. In all cases, the effectiveness of the nanoparticles was superior to the naked terpenes, however, the mixtures were dramatically more effective than the individuals. Recently, our partners at theUniversity of Seville have completed the formulation of new cannabis-based ingredients for inclusion into the oral, time-released nanoparticle format for the completion of our maximally effective MEMs for chronic pain. The results fromSeville are very promising, and these nanoparticles have entered the animal testing phase at the NRC inHalifax .The National Research Center (NRC) ofCanada ,Halifax, Nova Scotia : Four animal-phase studies are being performed by Dr.Lee Ellis' group at the NRC. 1) Parkinson's Disease: In Q1 of 2020, an animal safety and efficacy study was completed for the Company's equimolar MEMs for the treatment of the motor symptoms of Parkinson's disease, and the NRC has demonstrated that the company's PD formulations were able to reduce behavioral changes associated with the loss of dopamine-producing neurons, which underlies the pathology of Parkinson's disease in the animal model. Based on achieving the statistically significant reduction in Parkinson's disease symptomology in these equimolar MEMs, the Company completed a final phase of testing in August of 2021, which identified five defined cannabinoid ratio (DCR)-MEMs that were more effective than the root equimolar MEM. 2) Chronic Pain: In Q1 of 2019, the Company started a safety and efficacy study in animals for our Chronic Pain (CP) formulas. The midterm results for these preclinical pain studies were promising, but the study was significantly delayed by the COVID pandemic. These preclinical studies have resumed and are progressing well. 3 & 4) Depression and Anxiety: Minimum essential mixtures of plant-based ingredients from kava and the related Piper plant family are being evaluated now.The University of Cadiz : Testing the safety and efficacy of the above-mentioned time-released nanoparticles in rodent models of chronic pain. Proof of concept complete for one formulation.
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Table of Contents
Path to Market: Drug Development Stages and Proposed Clinical Trials
The Company has plant-based therapeutic products in the following stages of drug development: Discovery, Pre-Clinical, and entering the Clinical Phase. It has also licensed therapeutic products that the Company intends to develop through partners, labeled Partner Programs. The completion of discovery, preclinical studies, clinical trials, and the required regulatory submissions required for obtainingUS FDA pre-market approvals for pharmaceutical products (and equivalent approvals from other corresponding agencies worldwide) is traditionally a long and expensive process. However, the Company asserts that its proprietary, PhAROS™, AI-enabled, drug discovery engine; plant-inspired formulations; lean development program; novel regulatory strategy; experienced development partners; and aggressive licensing of these products at early clinical stages can mitigate some of the risks. The Company uses a combination of in silico discovery methods and automated screening of cellular and animal models of disease to decrease the time in Discovery prior to filing novel patent applications for disease-specific therapeutics. Through GBSGB, the Company's original patent applications cover new chemical entities ("NCE") based on discovery and validation of minimum essential mixtures derived from complex, plant-based therapeutics. The Company plans to use an Exploratory IND/Phase 0 Program that gets the Company to First-in-Human sooner than traditional programs, which reduces translational risks, and includes preliminary efficacy measures for responsible development decisions. In contrast, a traditional phased-development path would not provide any efficacy measures until Phase II. After the completion of our Phase 0 study for PD, which compares the efficacies of multiple related cannabinoid-based formulations, the Company plans to advance the lead PD drug candidate using an adaptive trial design that is more efficient than the traditional phased-development pathway. Through GBSGB, the Company has entered into research contracts, partnerships, and/or joint ventures with several respected, independent contract research organizations, medical schools, universities, and with other scientific consultants to increase developmental efficiencies. If and when one or more of the Company's drugs, therapies or treatments are approved by theUS FDA , the Company will seek to market them under licensing arrangements with major biotechnology or pharmaceutical companies. There can be no assurance that we will ever be able to enter into any joint ventures or other arrangements with third parties to finance our drug development program or that if we are able to do so, that any of our projected therapies will ever be approved by theUS FDA . Even if we obtainUS FDA approval to market one of our therapies, there can be no assurance that it could be successfully marketed or would not be superseded by another plant-based therapy produced by one or more of our competitors. It also may be anticipated that even if we enter into a joint venture development with a financially stable pharmaceutical or institutional partner, we will still be required to raise significant additional capital in the future to achieve the strategic goals of the Company. There can be no assurance that we will be able to obtain such additional capital on reasonable terms, if at all. If the Company fails to achieve its goal of producing one or more plant-inspired pharmaceuticals or therapies, it would have a material adverse effect on our future financial condition and business prospects. Other Operations OnMarch 24, 2020 , the Company entered into the Membership Interest Purchase Agreement ("Teco MIPA") withAJE Management, LLC . Pursuant to the Teco MIPA, the Company agreed to sell 100% of its membership interests inGB Sciences Nevada, LLC , andGB Sciences Las Vegas, LLC (the "Teco Subsidiaries") for approximately$8 million , which amount includes a cash payment at closing, the extinguishment of certain liabilities owed to the purchaser and affiliates of the purchaser, and an 8% promissory note. OnAugust 10, 2020 , the Company entered into the Membership Interest Purchase Agreement ("Nopah MIPA") and Promissory Note Modification Agreement with 483Management, LLC . Pursuant to the Nopah MIPA, the Company agreed to sell its 100% membership interest inGB Sciences Nopah, LLC ("Nopah"), which holds aNevada medical marijuana cultivation certificate. As consideration, the Company would receive$300,000 as a reduction to the balance of the 0% Note payable datedOctober 23, 2017 and accounts payable of$74,647 , which were owed to an affiliate of the purchaser. The closing of the Teco and Nopah sales was contingent upon the successful transfer of theNevada cultivation and production licenses. OnDecember 14, 2021 , the Company received approval from theNevada Cannabis Compliance Board for the transfer of cannabis cultivation and extraction licenses held by its subsidiariesGB Sciences Nevada, LLC ,GB Sciences Las Vegas, LLC , andGB Sciences Nopah, LLC (the "Nevada Subsidiaries"). Consequently, all conditions to closing the sales of the 100% membership interests in the Nevada Subsidiaries were satisfied, and the transactions formally closed onDecember 31, 2021 . After the closing date, the Company retains no ownership interest in theNevada Subsidiaries. 29
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Table of Contents
RESULTS OF OPERATIONS
The following table sets forth certain of our Statements of Operations data from
continuing operations:
For the Three Months Ended For the Nine Months Ended
December 31, December 31,
2022 2021 2022 2021
General and administrative expenses
$ 1,142,658 $ 1,417,738 LOSS FROM OPERATIONS (407,302 ) (512,788 ) (1,142,658 ) (1,417,738 ) OTHER INCOME/(EXPENSE) Interest expense (41,470 ) (159,478 ) (117,260 ) (319,976 ) Gain on deconsolidation - 5,206,208 - 5,206,208 Other expense - (15,639 ) - (6,639 ) GAIN/(LOSS) BEFORE INCOME TAXES (448,772 ) 4,518,303 (1,259,918 ) 3,461,855 Income tax expense - - - -
GAIN/(LOSS) FROM CONTINUING OPERATIONS
$ (1,259,918 ) $ 3,461,855
Comparison of the Three and Nine Months Ended
General and Administrative Expenses
General and administrative expenses decreased by$105,486 to$407,302 for the three months endedDecember 31, 2022 , compared to$512,788 for the three months endedDecember 31, 2021 , and decreased by$275,080 to$1,142,658 for the nine months endedDecember 31, 2022 compared to$1,417,738 for the nine months endedDecember 31, 2021 . The decrease is attributable in part to the completion of a research contract withMichigan State University for which the Company had recorded expense of$100,690 in the prior nine month period. In addition, the Company is continuing its efforts to maintain administrative costs at a minimum and to make the best use of its limited resources in advancing research & development of the Company's intellectual property portfolio.
Interest and Other Income
Interest expense decreased by$118,008 to$41,470 for the three months endedDecember 31, 2022 , compared to$159,478 in the prior year quarter. Other expense was$15,639 in the prior year quarter. For the nine months endedDecember 31, 2022 , interest expense decreased by$202,716 to$117,260 compared to$319,976 in the nine months endedDecember 31, 2021 , and other expense was$6,639 for the prior year nine months. The decrease in both periods is attributable to less debt outstanding as the result of the repayment of$500,000 debt principal during theMarch 31, 2022 quarter and a decrease in amortization expense from debt discounts during the current year period as the result of prior amortization of discounts on outstanding debt.
LIQUIDITY AND CAPITAL RESOURCES
Current Liquidity The Company will need additional capital to implement its strategies. There is no assurance that it will be able to raise the amount of capital needed for future growth plans. Even if financing is available, it may not be on terms that are acceptable. If unable to raise the necessary capital at the times required, the Company may have to materially change the business plan, including delaying implementation of aspects of the business plan or curtailing or abandoning the business plan. The Company represents a speculative investment and investors may lose all of their investment. In order to be able to achieve the strategic goals, the Company needs to further expand its business and financing activities. Based on the Company's cash position, it is necessary to raise additional capital by the end of the next quarter in order to continue to fund current operations. These factors raise substantial doubt about the ability to continue as a going concern. The Company is pursuing several alternatives to address this situation, including the raising of additional funding through equity or debt financing. In order to finance existing operations and pay current liabilities over the next twelve months, the Company will need to raise additional capital. No assurance can be given that the Company will be able to operate profitably on a consistent basis, or at all, in the future.
The principal sources of liquidity to date have been cash generated from sales of debt and equity securities and loans along with the sale of our subsidiaries.
AtDecember 31, 2022 , cash was$274,038 , other current assets excluding cash were$159,185 , and our working capital deficit was$3,962,864 . Current liabilities were$4,396,087 and consisted principally of$1,751,820 in accounts payable,$360,090 in accrued liabilities,$1,387,682 in notes and convertible notes payable, and and a federal income tax liability related to the Company's past ownership of the Nevada Subsidiaries of$896,495 .
At
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Table of Contents Sources and Uses of Cash Operating Activities Net cash used in operating activities was$1,306,971 for the nine months endedDecember 31, 2022 , compared to cash used of$1,200,915 , including$87,772 used in operating activities of discontinued operations for the nine months endedDecember 31, 2021 . We anticipate that cash flows from operations will be insufficient to fund business operations for the next twelve-month period. Accordingly, we will have to generate additional liquidity or cash flow to fund our current and anticipated operations. This will likely require the sale of additional common stock or other securities. There is no assurance that we will be able to realize any significant proceeds from such sales, if at all. Investing Activities During the nine months endedDecember 31, 2022 ,$31,650 was used in investing activities for the acquisition of intangible assets. During the nine months endedDecember 31, 2021 , cash provided by investing activities was$1,550,339 , which consists of$1,648,772 in proceeds from the sale of theNevada Subsidiaries, offset by$100,000 paid to acquire intangible assets and$1,567 provided by investing activities of discontinued operations. Financing Activities During the nine months endedDecember 31, 2022 , cash flows provided by financing activities totaled$1,378,766 , including$1,625,000 in gross proceeds from sales of the Company's common stock in a private placement, offset by$207,350 in brokerage fees and$34,984 of principal payments on a note payable. Cash provided by financing activities for the nine months endedDecember 31, 2021 included$62,660 proceeds from warrant exercises and$50,000 proceeds from a convertible note, offset by$103,387 used in discontinued operations. Going Concern The Company's unaudited condensed consolidated 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$105,840,040 atDecember 31, 2022 . The Company had a working capital deficit of$3,962,864 atDecember 31, 2022 , compared to a deficit of$3,607,638 atMarch 31, 2022 . In addition, the Company has consumed cash in its operating activities of$1,306,971 for the nine months endedDecember 31, 2022 , compared to$1,200,915 used in operating activities, including$87,772 used in discontinued operations for the nine months endedDecember 31, 2021 . 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 debt financings, 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.
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.
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Table of Contents VARIABLES AND TRENDS In the event the Company is able to obtain the necessary financing to progress with its business plan, the Company expects expenses to increase significantly to grow the business. Accordingly, the comparison of the financial data for the periods presented may not be a meaningful indicator of future performance and must be considered in light of these circumstances. CRITICAL ACCOUNTING POLICIES A description of the Company's significant accounting policies is included in Note 3 of its Annual Report on Form 10-K for the fiscal year endedMarch 31, 2022 .
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