LAS VEGAS, Nov. 18, 2019 /PRNewswire/ -- PRESS RELEASE -- GB Sciences, Inc. completed the sale on Nov. 15, 2019 of its 50% membership interest in GB Sciences Louisiana, LLC to Wellcana Plus, LLC, an affiliate of Wellcana Group, LLC who owns the other 50% interest. The sale immediately eliminates current cash obligations due from GB Sciences as well as the company's share of operating expenses going forward. While selling the cannabis cultivation and oil production business, GB Sciences retained the benefit of Wellcana Plus's 50% interest in intellectual property developed under the Master Research and Development Agreement.
The terms of the sale include a promissory note from Wellcana Plus to GB Sciences for $8 million, with payments commencing in June 2020 through December 2021. The promissory note is secured by a pledge agreement with the 50% interest as collateral, declining pro-rata with note payments until all principal and accrued interest have been paid. In addition to the note, there will be an earn out of $8 million from operations through the term of the Agreement for Services including renewals, if any. The actual proceeds realized through the earn out and the timing of those proceeds will depend upon patient count accretion and the profitability of the Louisiana operations.
John Poss, CEO of GB Sciences, stated, "We think the transaction is a win for everyone. Wellcana Group has been an exceptional partner in Louisiana. With the same managers, we know Wellcana Plus will lead GB Sciences Louisiana to even greater success for not only their investors but also the patients and other stakeholders in Louisiana. For our own shareholders, the sale will greatly reduce our operating expenses while maintaining the benefit of intellectual property developed in Louisiana. It allows us to focus on continued development of clinical cannabis formulations for which the company has filed numerous patents, and progressing the research on our Parkinson's Disease and Chronic Neuropathic Pain formulations towards clinical trials and first-in-human pilot studies. We believe this strategy offers tremendous opportunity to create shareholder value in this untapped segment of the cannabis sector."