GB SCIENCES INC Management’s Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

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The following discussion and analysis contains "forward-looking statements," as
defined in the 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 the United States and foreign
countries, including any actions or advice that may affect the design,
initiation, timing, continuation, progress or outcome of clinical trials or
result in the need for additional clinical trials,


(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 the Securities 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 with United States generally accepted
accounting principles. You should read this discussion and analysis together
with such financial statements and the related notes thereto.



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Overview



GB 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 in North America and Europe.
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 issued U.S. and three issued foreign patents, as well as 18 U.S. and 49
foreign patent-pending applications. On October 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. On March 1st, 2022,
the Company's newest patent was issued by the U.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 the National
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 at Michigan State University.
Proof-of-concept studies in animals that support our heart disease formulations
have been successfully completed at the University 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.



On April 4, 2014, we changed our name from Signature Exploration and Production
Corporation to Growblox Sciences, Inc. Effective December 12, 2016, the Company
amended its Certificate of Corporation pursuant to shareholder approval, and the
Company's name was changed from Growblox Sciences, Inc. to GB Sciences, Inc.



Effective April 8, 2018, Shareholders of the Company approved the change in
corporate domicile from the State of Delaware to the State of Nevada and
increase in the number of authorized capital shares from 250,000,000 to
400,000,000. Effective August 15, 2019, Shareholders of the Company approved an
increase in authorized capital shares from 400,000,000 to 600,000,000.

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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 the
Natural Sciences and Mathematics Department at Chaminade 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 of Traditional 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.



The U.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.
On March 1st, 2022, the Company's newest patent was issued by the U.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.



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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 necessary ADMET
(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 the US 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 the National Research Council ("NRC") Canada in Halifax, 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 at Michigan 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 the US 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 the U.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 on US FDA-approved, cannabinoid-containing drugs, their Schedule I drug
manufacturing facilities, their familiarity with US 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.



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Additionally, the Company has selected the University 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 conduct ADMET 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 the ADMET testing. In the IND application for our novel Parkinson's
disease therapy, the ADMET 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 in Halifax, 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 on August 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 at
Michigan 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.



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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 reach USD
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
with Chaminade University, 2) the Company's Cannabis Metabolomics Project with
both Chaminade University of Honolulu, Hawai'i and the University of Athens,
Greece, and 3) the Company's Time-Released Nanoparticles for Delivery of
Cannabis-based Ingredients with the University of Seville, Spain and the
University 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 of U.S. Patent No. 10,653,640 entitled
"Cannabinoid-Containing Complex Mixtures for the Treatment of Neurodegenerative
Diseases" on May 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% of U.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 the U.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 the US 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 on March 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 in the 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.



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Intellectual Property Portfolio




GBSGB retained Fenwick & West, a Silicon 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.

U.S. Patent protection was granted for GBSGB’s Cannabinoid-Containing Complex Mixtures for the treatment
of Parkinson’s disease.




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 U.S. for use in the treatment of pain related to arthritis,
shingles, irritable bowel syndrome, sickle cell disease, and endometriosis.

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.

U.S. Patent protection was granted for GBSGB’s Cannabinoid-Containing Complex Mixtures for the
treatment of Mast Cell Activation Syndrome (MCAS).

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.

U.S. Patent protection was granted for GBSGB’s
Cannabinoid-Containing Complex Mixtures 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.





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 

Sevilla, 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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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 the University 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 the University 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 from Seville are very promising,
and these nanoparticles have entered the animal testing phase at the NRC in
Halifax.



The National Research Center (NRC) of Canada, 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.



University of Hawaii: Validating the efficacy of a complex cannabis-based
mixture for the treatment of cardiac hypertrophy and cardiac disease in a rodent
model. Proof of concept work is complete in rodents, and we are seeking
commercialization partners.

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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 obtaining US 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
the US 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 the US FDA. Even if we obtain US 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



On March 24, 2020, the Company entered into the Membership Interest Purchase
Agreement ("Teco MIPA") with AJE Management, LLC. Pursuant to the Teco MIPA, the
Company agreed to sell 100% of its membership interests in GB Sciences Nevada,
LLC, and GB 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.



On August 10, 2020, the Company entered into the Membership Interest Purchase
Agreement ("Nopah MIPA") and Promissory Note Modification Agreement with 483
Management, LLC. Pursuant to the Nopah MIPA, the Company agreed to sell its 100%
membership interest in GB Sciences Nopah, LLC ("Nopah"), which holds a Nevada
medical marijuana cultivation certificate. As consideration, the Company would
receive $300,000 as a reduction to the balance of the 0% Note payable dated
October 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 the Nevada cultivation and production licenses. On December 14,
2021, the Company received approval from the Nevada Cannabis Compliance Board
for the transfer of cannabis cultivation and extraction licenses held by its
subsidiaries GB Sciences Nevada, LLC, GB Sciences Las Vegas, LLC, and GB
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 on December 31, 2021. After
the closing date, the Company retains no ownership interest in the Nevada
Subsidiaries.



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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 Six Months Ended
                                                    September 30,                      September 30,
                                                2022               2021            2022             2021

General and administrative expenses $ 275,839 $ 411,545

    $    735,357     $    904,951
LOSS FROM OPERATIONS                             (275,839 )       (411,545 )       (735,357 )       (904,951 )
OTHER INCOME/(EXPENSE)
Interest and other income, net                    (37,218 )        (86,244 )        (75,789 )       (151,498 )
LOSS BEFORE INCOME TAXES                         (313,057 )       (497,789 )       (811,146 )     (1,056,449 )
Income tax expense                                      -                -                -                -
LOSS FROM CONTINUING OPERATIONS            $     (313,057 )     $ (497,789 )   $   (811,146 )   $ (1,056,449 )



Comparison of the Three and Six Months Ended September 30, 2022 and 2021

General and Administrative Expenses




General and administrative expenses decreased by $135,706 to $275,839 for the
three months ended September 30, 2022, compared to $411,545 for the three months
ended September 30, 2021, and decreased by $169,594 to $735,357 for the six
months ended September 30, 2022 compared to $904,951 for the six months ended
September 30, 2021. The decrease is attributable primarily to the completion of
a research contract with Michigan State University for which the Company had
recorded expense of $100,690 in the prior six month period. 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 $58,026 to $37,218 for the three months ended
September 30, 2022, compared to $95,244 in the prior year quarter. Other income
was $9,000 in the prior year quarter. For the six months ended September 30,
2022, interest expense decreased by $84,709 to $75,789 compared to $160,498 in
the six months ended September 30, 2021, and other income was $9,000 for the
prior year six months.



The decrease in both periods is attributable to less debt outstanding as the
result of the repayment of $500,000 debt principal during the March 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.




At  September 30, 2022, cash was $657,754, other current assets excluding cash
were $220,727, and our working capital deficit was $3,212,742. Current
liabilities were $4,091,223 and consisted principally of $1,581,823 in accounts
payable, $442,986 in accrued liabilities, $1,169,919 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 March 31, 2022, cash was $233,893, other current assets excluding cash
were $93,933, and our working capital deficit was $3,607,638. Current
liabilities were $3,935,464, which consisted principally of $1,657,008 in
accounts payable, $394,396 in accrued liabilities, $987,565 in notes and
convertible notes payable, and an income tax liability related to the Company’s
past ownership of the Nevada Subsidiaries of $896,495.

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Sources and Uses of Cash



Operating Activities



Net cash used in operating activities was $907,564 for the six months ended
September 30, 2022, compared to cash used of $772,461, net of $16,243 provided
by operating activities of discontinued operations for the six months ended
September 30, 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 six months ended September 30, 2022, $30,320 was used in investing
activities for the acquisition of intangible assets. During the six months ended
September 30, 2021, cash provided by investing activities was $101,502, which
consists of $200,000 in proceeds from the sale of the Nevada Subsidiaries,
offset by $100,000 paid to acquire intangible assets and $1,502 provided by
investing activities of discontinued operations.



Financing Activities



During the six months ended September 30, 2022, cash flows provided by financing
activities totaled $1,361,745, including $1,595,000 in gross proceeds from sales
of the Company's common stock in a private placement, offset by $207,350 in
brokerage fees and $25,905 of principal payments on a note payable. Cash
provided by financing activities for the six months ended September 30, 2021
included $62,660 proceeds from warrant exercises and $50,000 proceeds from a
convertible note, offset by $67,931 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 $105,391,268 at September 30, 2022. The Company had a working capital deficit
of $3,212,742 at September 30, 2022, compared to a deficit of $3,607,638 at
March 31, 2022. In addition, the Company has consumed cash in its operating
activities of $907,564 for the six months ended September 30, 2022, compared to
$772,461 used in operating activities, net of $16,243 provided by discontinued
operations for the six months ended September 30, 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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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 ended March 31,
2022.

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