UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1/A
(Amendment No. 4 )
 
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
 
GROWBLOX SCIENCES, INC.
(Exact name of registrant as specified in its charter)
 
DELAWARE
(State or other jurisdiction of incorporation or organization)
 
2834
(Primary Standard Industrial Classification Code)
 
7251 West Lake Mead Blvd, Suite 300
Las Vegas, Nevada 89128
Phone: (844) 843-2569
Fax: (866) 929-5122
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
 
A Registered Agent, Inc.
1521 Concord Pike #303
Wilmington, DE
Telephone: (302) 288-0670
(Name, address, including zip code, and telephone number, including area code, of agent for service)
 
Copies of Communications to:
Gary R. Henrie, Esq.
486 W. 1360 N.
American Fork, Utah 84003
Tel: (801) 310-1419
Email: grhlaw@hotmail.com
Approximate date of commencement of proposed sale to public:
From time to time after the effective date of this registration statement.
 
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If any securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. [X]
 
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
 
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
 
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
 
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]
 
CALCULATION OF REGISTRATION FEE
Title of Each Class of
Securities To Be Registered
 
Amount to
be
Registered
 
Proposed Maximum
Offering Price
Per Share
 
Proposed Maximum
Aggregate
Offering Price
 
Amount of
Registration Fee
Common stock, par value $.0001 per share
 
33,000,000 shares(1)
 
$1.12 (2)
$0.40 (2)
 
$34,584,000
 
$4,284.40 (2)
$153.39 (2)
(1)
Of this amount, 10,000,000 common shares being registered are shares to be offered by Selling Stockholders, 20,000,000 common shares underlie warrants that are held by the Selling Stockholders and 3,000,000 common shares underlie warrants that are held by an entity who acted as a placement agent for the Registrant in a private offering.
 
(2)
The closing price of the common shares on July 23, 2014 with regard to 29,700,000 shares being registered. The closing price of the common shares on December 3, 2014 with regard to 3,300,000 shares being registered. $4,284.40 of the registration fee was paid in connection with the original filing of the registration statement on July, 25, 2014. $153.39 of the registration fee was paid in connection with the filing of Amendment No. 3 to the registration statement.
 
The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
 
The information in this prospectus is not complete and may be changed. The selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and the selling stockholders are not soliciting offers to buy these securities in any state where such offers are not permitted.
 
Subject to completion,
 
December _____, 2014

 
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PROSPECTUS
33,000,000 Shares
GROWBLOX SCIENCES, INC.
Common Stock
 
We are registering the sale of 10,000,000 shares of common stock of Growblox Sciences, Inc., a Delaware corporation (“Growblox” or the “Company”), held by the selling stockholders. We are also registering the issuance of and the resale of 20,000,000 common shares that underlie warrants held by the Selling Stockholders and the resale of 3,000,000 common shares that underlie warrants held by an entity who acted as a placement agent for the Registrant in a private offering. The selling stockholders will receive all of the proceeds from the sale of the shares. We will pay all expenses incident to the registration of the shares under the Securities Act of 1933, as amended.
 
At the present time our common stock is listed on the OTCQB under the symbol GBLX. The Selling Stockholders will sell the shares at prevailing market prices or at privately negotiated prices.
 
Investing in our common stock involves risks, which are described in the “Risk Factors” section beginning on page 9 of this prospectus.
 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
 
The date of this prospectus is December _____, 2014.

 
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TABLE OF CONTENTS
 
You should rely only on the information contained in this prospectus. We have not authorized any person to provide you with any information or represent anything not contained in this prospectus, and, if given or made, any such other information or representation should not be relied upon as having been authorized by us. The selling stockholders are not offering to sell, or seeking offers to buy, our common stock in any jurisdiction where the offer or sale is not permitted. You should not assume that the information provided in this prospectus is accurate as of any date other than the date on the front cover of this prospectus.
   
Page
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
  5
PROSPECTUS SUMMARY
  6
RISK FACTORS
  9
USE OF PROCEEDS
  12
MARKET FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
  12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  13
BUSINESS
  19
MANAGEMENT
  23
EXECUTIVE COMPENSATION   25
VOTING SECURITIES AND PRINCIPAL HOLDERS
  26
SELLING STOCKHOLDERS
  27
PLAN OF DISTRIBUTION
  29
DESCRIPTION OF CAPITAL STOCK
  31
LEGAL MATTERS
  31
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
  31
EXPERTS
  32
WHERE YOU CAN FIND MORE INFORMATION
  32
INDEX TO FINANCIAL STATEMENTS
  33


 
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
In addition to historical information, this prospectus contains forward-looking statements. The words “forecast”, “eliminate”, “project”, “intend”, “expect”, “should”, “believe” and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors, including those discussed in “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations,” which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the following:
 
·
Our ability to achieve our business of producing and selling products;
·
The legalization of cannabis production and use in states where it is not currently legal;
·
Our ability to obtain licensing for cannabis production and distribution in the various states;
·
Our ability to produce medical grade cannabis products;
·
Our ability to attract, retain and motivate qualified employees and management.
·
The impact of federal, state or local government regulations;
·
Competition in the cannabis industry;
·
Availability and cost of additional capital;
·
Litigation in connection with our business;
·
Our ability to protect our trademarks, patents and other proprietary rights;
·
Other risks described from time to time in our periodic reports filed with the Securities and Exchange Commission
 
This list of factors that may affect future performance and the accuracy of forward-looking statements are illustrative but not exhaustive. Accordingly, all forward-looking statements should be evaluated with an understanding of their inherent uncertainty.
Except as required by law, we assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

 
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PROSPECTUS SUMMARY
 
The following summary highlights information contained elsewhere in this prospectus. It is not complete and does not contain all of the information that you should consider before investing in our common stock. You should read the entire prospectus carefully, especially the risks of investing in our common stock discussed under “Risk Factors” and our consolidated financial statements and accompanying notes. Any references to “Growblox”, “we”, “us” or “our” refer to Growblox Sciences, Inc., a Delaware corporation.
 
Our Business
 
Growblox’s business pursuit is to pioneer the medical marijuana industry by combining agriculture with biotechnology. The Company’s cultivation technology allows for exact and consistent growth of medical-grade cannabis for direct dispensary sale of the cannabis plant, marijuana. Moreover, their cannabinoid research and extraction process adds a biotech element to manufacture and acquire strains of medical cannabis and cannabis oils to treat patients with specific medical conditions. The Company's proprietary technology will allow for consistent, medical grade cannabis and cannabis products. The Company will also employ state of the art extration techniques and engage in peer reviewed research and development to further enhance its product offerings.
 
Our mission is to create the trusted brand of technology that empowers patients with access to the benefits of medicinal-grade cannabis, and to become the trusted producer of consistent and efficacious medicinal cannabis strains and product lines. Our focus is to bring to market, cutting-edge technologies to commercially cultivate and produce medical-grade cannabis and cannabis concentrates. These medical-grade products will provide patients with valuable medicines that make a real difference to their quality of life. Please note however that our beliefs in the medical viability of cannabis related products are contrary to the position taken by the United States federal government and various of its agencies that cannabis has no medical benefit.
 
The Company’s current and short term business plan involves research and development in the growing and processing of cannabis products for medicinal purposes and in obtaining state licenses for the production and sale of cannabis products. These activities are not in violation of Federal Law. The Company’s long term business plan is to operate within the parameters of any state licenses obtained, which activities we believe will violate federal laws as presently constituted. If the Company is successful in obtaining state licenses and operating pursuant to those licenses and if federal law does not change, we believe the Company will be in violation of federal law which will likely have material adverse consequences to our business.
 
Our Offices
 
Growblox Sciences, Inc. is a Delaware corporation organized on April 1, 2001. Our principal executive offices are located at 7251 West Lake Mead Blvd., Suite 309, Las Vegas, NV 89128. Our telephone number is (884) 843-2569.
 
Our Website
 
Our Internet address is www.growbloxsciences.com. Information contained on our website is not part of this prospectus.
 
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The Offering
 
Shares of common stock offered by us: None.
 
Shares of common stock that may be sold by the selling stockholders: 33,000,000.
 
At the present time our common stock is listed on the OTCQB under the symbol GBLX. The Selling Shareholders will sell the shares at prevailing market prices or at privately negotiated prices.
 
Use of proceeds:
 
We will not receive any proceeds from the resale of the shares offered hereby, all of which proceeds will be paid to the selling stockholders.
 
Risk factors:
 
The purchase of our common stock involves a high degree of risk. You should carefully review and consider “Risk Factors” beginning on page 8.
 
We will pay all expenses incident to the registration of the shares under the Securities Act.
 
Summary Financial Information
 
The tables and information below are derived from Growblox’s audited financial statements for the years ended March 31, 2014, and March 31, 2013.
 
Balance Sheet Summary
 
March 31, 2014
   
March 31, 2013
 
   
(Audited)
   
(Audited)
 
             
Cash
  $ 339,327     $ 2,427  
Subscription receivable
    150,000       -  
Property and equipment, net
    44,922       128  
Total assets
    537,984       6,618  
Total liabilities
    1,551,354       1,196,307  
Total stockholders’ deficiency
    (1,013,370 )     (1,189,689 )
Statement of Operations Summary
 
Year Ended March 31, 2014
   
Year Ended March 31, 2013
 
   
(Audited)
   
(Audited)
 
             
Revenues
  $ 0     $ 0  
Gross profit
    0       0  
General and administrative expenses
    187,760       75,718  
Net income/(loss)
    (655,955 )     36,150  
 
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The tables and information below are derived from Growblox’s unaudited financial statements at September 30, 2014 and for the six month periods ended September 30, 2014, and September 30, 2013.
 
Balance Sheet Summary
 
September 30, 2014
 
   
(Unaudited)
 
       
Cash
  $ 1,638,239  
Other current assets
    229,972  
Property and equipment, net
    141,439  
Total assets
    2,013,265  
Total liabilities
    42,294  
Total stockholders’ deficiency
    2,018,178  
Statement of Operations Summary
 
Six Month Period Ended September 30, 2014
   
Six Month Period Ended September 30, 2013
 
   
(Unaudited)
   
(Unaudited)
 
             
Revenues
  $ -     $ -  
Gross profit
    -       -  
General and administrative expenses
    1,780,161       13,982  
Net income/(loss)
    (1,670,099 )     273,953  
 
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RISK FACTORS
 
This offering involves a high degree of risk. You should carefully consider the risks and uncertainties described below in addition to the other information contained in this prospectus before deciding whether to invest in shares of our common stock. If any of the following risks actually occur, our business, financial condition or operating results could be harmed. In that case, the trading price of our common stock could decline and you may lose part or all of your investment. In the opinion of management, the risks discussed below represent the material risks known to the company. Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also impair our business operations and adversely affect the market price of our common stock.
 
The success of the Company is dependent upon the services of key personnel.
 
The current business prospects of the Company are dependent upon the business and technological acumen and services of Mr. Craig Ellins. In the event the Company should lose the services of Mr. Ellins for any reason, it is doubtful the Company could be successful in commercializing its current business plan. The services of Mrs. Andrea Small-Howard are also important to the ongoing success of the Company without whom the business prospects of the Company will suffer.
 
Federal law prohibits the use of cannabis for the purposes in which the Company expects to engage.
 
As of the date of this prospectus, the policy and regulations of the Federal government and its agencies are that cannabis has no medical benefit and a range of activities including cultivation and use of cannabis for personal use is prohibited on the basis of federal law and may or may not be permitted on the basis of state law. Active enforcement of the current federal regulatory position on cannabis on a regional or national basis may directly and adversely affect the ability of the Company to develop its business plan even though it is allowed by state regulation in the various states in which the Company intends to operate. The Company’s current and short term business plan involves research and development in the growing and processing of cannabis products for medicinal purposes and in obtaining state licenses for the production and sale of cannabis products. These activities are not in violation of Federal Law. The Company’s long term business plan is to operate within the parameters of any state licenses obtained, which activities we believe will violate federal laws as presently constituted. If the Company is successful in obtaining state licenses and operating pursuant to those licenses and if federal law does not change, we believe the Company will at that time be in violation of federal law. If at that time the federal laws are enforced, it is likely the business will be significantly, adversly affected, as will hundreds of other businesses around the country and investors in this offering will lose their investments.
 
Our intellectual property may be compromised.
 
Part of the value of the Company going forward is vested in the intellectual property that the Company is acquiring the rights to at the present time. There may have been many persons involved in the development of the intellectual property, some of which the Company is not successful in obtaining the rights from. It is possible that in the future, claimants to the property rights may come forward that the Company is not aware of at the present time. It is also possible that the Company may not be successful in protecting its property rights. In either event, it is possible that the Company could lose the value of its intellectual property and if so the business prospects of the Company may suffer.
 
The fact that we have generated operating losses in the past raises doubt about our ability to continue as a going concern.
 
The Company has a history of generating operating losses. We have in the past covered any shortfall in operating capital from sales of equity and debt securities, but there can be no assurance that we will continue to be able to do so. The unpredictable economy in the United States and the volatile public equity markets may make it more difficult for us to raise capital as and when we need it, and it is difficult for us to assess the impact this might have on our operations or liquidity. If we cannot raise the funds that we require to continue our business operations, there is a substantial risk that our business will fail.
 
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Our common shares are penny stock. Trading of our common shares may be restricted by the SEC’s penny stock regulations and the FINRA’s sales practice requirements, which may limit a shareholder’s ability to buy and sell our common shares.
 
Our common shares are deemed to be penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the common shares that are subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in, and limit the marketability of, our common shares.
 
In addition to the “penny stock” rules promulgated by the Securities and Exchange Commission, the Financial Industry Regulatory Authority has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the Financial Industry Regulatory Authority believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The Financial Industry Regulatory Authority requirements make it more difficult for broker-dealers to recommend that their customers buy our common shares, which may limit your ability to buy and sell our shares.
 
Clearing Brokers may Decline to Deposit the Shares in the Subscriber’s Account.
 
Clearing brokers may decline to deposit into Subscriber's account a stock certificate for a security that (1) is a penny stock or (2) has stale or incomplete filings with the U.S. Securities and Exchange Commission (SEC). In addition to these conditions and limitations, the clearing broker may subject The Company's securities to additional review before accepting such securities for deposit. This review process may (1) take up to two weeks or longer, and (2) may include research into the Company or Subscriber. The characteristics that may trigger additional review include (1) low price of the security or securities under review; (2) large number of shares being deposited with clearing broker into Subscriber's account; (3) the securities in question are non-exchange traded; (4) the stock certificates are recently issued; (5) recent merger activity of the underlying company; and/or (6) change of name of the underlying company issuing these stock certificates. Finally, all of the aforementioned conditions, limitations, and characteristics triggering review may apply to Subscriber's Deposit/Withdrawal At Custodian (DWAC) requests, Automated Customer Account Transfer Account Service (ACATS) requests, and Depository Trust Company (DTC) receipts for deposit requests.
 
We may be unable to attract and retain qualified, experienced, highly skilled personnel, which could adversely affect the implementation of our business plan.
 
Our success depends to a significant degree upon our ability to attract, retain and motivate skilled and qualified personnel. As we become a more mature company in the future, we may find recruiting and retention efforts more challenging. If we do not succeed in attracting, hiring and integrating excellent personnel, or retaining and motivating existing personnel, we may be unable to grow effectively. The loss of any key employee, including members of our senior management team, and our inability to attract highly skilled personnel with sufficient experience in our industries could harm our business.
 
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Our common stock is quoted on the OTCQB which may have an unfavorable impact on our stock price and liquidity.
 
Our common stock is quoted on the OTCQB, which is a significantly more limited trading market than the New York Stock Exchange or The NASDAQ Stock Market. The quotation of the Company’s shares on the OTCQB may result in a less liquid market available for existing and potential stockholders to trade shares of our common stock, could depress the trading price of our common stock and could have a long-term adverse impact on our ability to raise capital in the future.
 
There is limited liquidity on the OTCQB which may result in stock price volatility and inaccurate quote information.
 
When fewer shares of a security are being traded on the OTCQB, volatility of prices may increase and price movement may outpace the ability to deliver accurate quote information. Due to lower trading volumes in shares of our common stock, there may be a lower likelihood of one’s orders for shares of our common stock being executed, and current prices may differ significantly from the price one was quoted at the time of one’s order entry.
 
Our common stock is thinly traded, so you may be unable to sell at or near asking prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate your shares.
 
Currently, the Company’s common stock is quoted in the OTCQB and future trading volume may be limited by the fact that many major institutional investment funds, including mutual funds, as well as individual investors follow a policy of not investing in OTCQB stocks and certain major brokerage firms restrict their brokers from recommending OTCQB stocks because they are considered speculative, volatile and thinly traded. The OTCQB market is an inter-dealer market much less regulated than the major exchanges and our common stock is subject to abuses, volatility and shorting. Thus, there is currently no broadly followed and established trading market for the Company’s common stock. An established trading market may never develop or be maintained. Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders. Absence of an active trading market reduces the liquidity of the shares traded there.
 
Our common stock is subject to price volatility unrelated to our operations.
 
The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of other companies in the same industry, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting the Company’s competitors or the Company itself. In addition, the OTCBB is subject to extreme price and volume fluctuations in general. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.
 
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The success of our business plan is dependent upon obtaining state licenses to operate in the cannabis industry which we may or may not be successful in obtaining.
 
We are in the process of directly or indirectly through subsidiaries, applying for state licenses to operate in the cannabis industry. The application process is extremely competitive and we may or may not be successful in obtaining one or more licenses. In the event we are not successful in obtaining the licenses applied for or if the approval of the licenses is significantly delayed, we may not be successful in implementing our business plan.
 
The Company has warrants outstanding for the purchase of shares of common stock of the Company and there are certain notes which could be converted into common stock, the exercise of which and the conversion of which may dilute the value of shares held by Company shareholders.
 
The Company has warrants outstanding that if exercised would lead to the issuance of 23,000,000 shares of common stock of the company. There are also certain notes on which the Company is not obligated but which are the subject of litigation in which the Company is involved that parties adverse to the Company have asked the Court to order a conversion of such notes into common shares of the Company. In the event the warrants or any of them are exercised, or if the court orders the described notes to be converted, the stock of the existing stockholders will be diluted.
 
USE OF PROCEEDS
 
Shares totaling 33,000,000 offered by this prospectus are being offered solely for the account of the selling stockholders. We will not receive any proceeds from the sale of the shares by the selling stockholders.
 
MARKET FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
 
Our common stock is quoted on the OTCQB under the symbol "GBLX".
 
For the periods indicated, the following table sets forth the high and low per share intra-day sales prices per share of common stock. These prices represent inter-dealer quotations without retail markup, markdown, or commission and may not necessarily represent actual transactions.
 
  High ($) Low ($)
     
Fiscal Quarter Ended September 30, 2014 $1.48 $0.67
     
Fiscal Quarter Ended June 30, 2014 $6.28 $0.98
     
Fiscal Year 2014
 
 
     
Fourth Quarter
$8.90
$0.40
Third Quarter
$1.00
$0.30
Second Quarter
$0.70
$0.30
First Quarter
$0.70
$0.70
     
Fiscal Year 2013
   
     
Fourth Quarter
$0.80
$0.30
Third Quarter
$2.00
$0.03
Second Quarter
$0.70
$0.70
First Quarter
$1.80
$1.80
 
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Dividends and Dividend Policy
 
We have never declared or paid cash dividends on our common stock and do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently intend to retain future earnings, if any, to finance the expansion of our business and for general corporate purposes. We cannot assure you that we will pay dividends in the future. Our future dividend policy is within the discretion of our Board of Directors and will depend upon various factors, including our results of operations, financial condition, capital requirements and investment opportunities.
 
Equity Compensation Plan Information
 
The 2007 Amended Stock Option Plan was adopted by the Board of Directors on February 6, 2008. Under this plan, a maximum of 8,000,000 shares of our common stock, par value $0.0001, were authorized for issue. The vesting and terms of all of the options are determined by the Board of Directors and may vary by optionee; however, the term may be no longer than 10 years from the date of grant.
 
The 2014 Equity Incentive Plan was adopted by the Board of Directors on November 3, 2014. Under this plan, a maximum of 3,000,000 shares of our common stock, par value $0.0001, were authorized for issue. The vesting and terms of all of the options are determined by the Board of Directors and may vary by optionee.
 
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
 
The following discussion of our plan of operation, financial condition and results of operations should be read in conjunction with the Company’s financial statements, and notes thereto, included elsewhere herein. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors including, but not limited to, those discussed in this prospectus.
 
Overview
 
Our company was incorporated in the State of Delaware on April 4, 2001, under the name “Flagstick Venture, Inc.” On March 28, 2008, a majority of our stockholders approved changing our name to Signature Exploration and Production Corp. as our business model had changed to become an independent energy company engaged in the acquisition and development of crude oil and natural gas leases in the United States.
 
On March 18, 2014, we purchased assets from Craig Ellins, which included the innovative and proprietary GrowBLOX™ cultivation technology. We plan to utilize this technology to commercially cultivate and produce medical grade cannabis for sale in the U.S. states and territories in which it is legal. We also plan to research the medical treatment potential of cannabis and develop treatments from those findings. On April 4, 2014, we officially changed our name to GrowBLOX™ Sciences, Inc. to reflect this new corporate direction
 
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Plan of Operation
 
Our goal is to be an industry leader in the cultivation of and the research and development of cannabis for medical drugs and treatments. To achieve our goal, we plan on developing methods and products that will improve the cultivation of cannabis and provide consistent medical-grade yields for biopharmaceutical and nutraceutical products.
 
We estimate that we will require an additional $4,750,000 to fund our currently anticipated requirements for ongoing operations and grow and dispensary facilities for our existing business for the next twelve-month period.
 
Based upon our cash position, we will need to raise additional capital prior by the end of fiscal 2015 in order to fund current operations. These factors raise substantial doubt about our ability to continue as a going concern. We are pursuing several alternatives to address this situation, including the raising of additional funding through equity or debt financings. We are in discussions with our existing stockholders to provide additional funding in exchange for notes or equity. However, there can be no assurance that the requisite financing will be consummated in the necessary time frame or on terms acceptable to us. Should we be unable to raise sufficient funds, we may be required to curtail our operating plans or possibly cease operations. No assurance can be given that we will be able to operate profitably on a consistent basis, or at all, in the future.
 
We have created a majority owned limited liability company (55%), GB Sciences Nevada, LLC to obtain licensing for cultivation and distribution of cannabis in the state of Nevada. We have been granted a special use permit by Clark County, NV for a cultivation location. T he state of Nevada recently granted the Company a provisional license for our proposed cultivation facility and operation in Clark County Nevada. They did not grant us licenses for our proposed dispensary operations in the City of Las Vegas and in Clark County Nevada. The Company intends to go forward with its cultivation operations in Clark County utilizing its proprietary GrowBlox technology. It is evaluating its ability to achieve licensing for dispensary operations. However, there can be no assurance that such efforts will be successful. Our co-owner in GB Sciences Nevada, LLC is a Nevada limited liability company named GBS Nevada Partners LLC that owns the other 45%. The Hammer Family Trust of which James D. Hammer is the trustee, owns a 17.78% membership interest in GBS Nevada Partners LLC and 177,777 shares of common stock in the Company.The Meservey Family Trust of which James M. Meservey is the trustee, also owns a 17.78% membership interest in GBS Nevada Partners LLC and 177,777 shares of common stock in the Company.Both the Hammer Family Trust and the Meservey Family Trust also each own warrants to purchase 355,554 common shares of the Company. Michael B. Viellion is a trustee and beneficiary of the Carmik Family Trust. Mr. Viellion is also the manager of MMJ Investment Facility, LLC which owns an 11.11% membership interest in GBS Nevada Partners LLC. The Carmik Family Trust also owns warrants to purchase 222,224 common shares of the Company. The Company made an initial contribution of $137,500 for its 55% of GB Sciences Nevada, LLC and GBS Nevada Partners LLC made an initial contribution of $112,500 for its 45%. The Company has agreed to loan GB Sciences Nevada LLC up to $3,750,000 to fund its initial business operations. We plan to use our Nevada operations as a model for establishing business in other U.S. states and territories. At this time, we have created subsidiary companies in New York, Puerto Rico, Florida and New Jersey.
 
We are finalizing the production and testing of the GrowBLOX™ system. We received the first prototype growing chamber in September, 2014. After testing and revisions are made, an initial round of production will provide containers for the first cultivation facility in Clark County, Nevada in the quarter ending March 31, 2015.
 
We also plan to set up biopharmaceutical research and development of products using our harvested cannabis. Our initial phase will be the accelerated “virtual pharma” and will include obtaining license patents on promising projects, testing and FDA approval, and co-developing the resulting product for marketing and sale. The next phase will involve setting up a traditional biopharmaceutical research method to allow our company to begin the R&D process in-house and fully own resulting patents and products.
 
 
- 14 -
 
Results of Operations
 
Comparison of the fiscal year ended March 31, 2014 and March 31, 2013.
 
FINANCIAL INFORMATION
   
2014
   
2013
 
Loss on oil and gas properties
  $ -     $ 36,000  
General and administrative
    166,000       76,000  
Other income/(expense)
    (468,000 )     148,000  
Net income/(loss)
  $ ( 634,000 )   $ 36,000  
 
Loss on oil and gas properties. Loss on oil and gas properties increased by $36,000 due to a lease cancelation during 2013.
 
General and Administrative. General and administrative expenses increased in 2014 due to an increase in professional and consulting fees for obtaining licenses in Nevada.
 
Other Income/(Expense). Other expenses increased by $616,000 in 2014 due to the change in the fair value of convertible notes and warrants by 57,000 and a loss on loan modifications of $559,000.
 
Liquidity and Capital Resources relative to year end of March 31, 2014
 
We had cash balances totaling approximately $339,000 as of March 31, 2014. Historically, our principal source of funds has been cash generated from financing activities. We raised have $5 million in capital in the past three months.
 
Cash flow from operations . We have been unable to generate either significant liquidity or cash flow to fund our current operations. We anticipate that cash flows from operations will be insufficient to fund our business operations for the next twelve-month period.
 
Cash flows from investing activities . There was $15,200 and $0.00 cash used in investing activities for the years ended March 31, 2014 and 2013.
 
Cash flows from financing activities . Net cash provided by financing activities was generated from promissory notes and sale of common stock that total $715,750 and $37,700 for the years ended March 31, 2014 and 2013.
 
- 15 -
 
Comparison of the six month periods ended September 30, 2014 and September 30, 2013.
 
FINANCIAL INFORMATION
   
September 30, 2014
   
September 30, 2013
 
General and administrative other than Stock Compensation
  $ 3,275,358     $ 43,469  
Other income/(expense)
    334       275,218  
Net income/(loss)
  $ (3,275,024 )   $ 231,749  
 
Comparison of the Three Months Ended  September 30, 2014 and September 30, 2014
 
General and Administrative . General and administrative expenses increased by $1,766,229 in 2014 due to an increase in stock compensation, investor relations, professional and consulting fees relating to our licensing process, and the addition of six employees. Travel expenses have also increased due to the licensing process in multiple states.

Other Income/(Expense). Other income decrease by $287,793 in 2014 due to the change in the fair value of convertible notes and warrants that were settled.

Comparison of the Six Months Ended September 30, 2014 and September 30, 2013

General and Administrative . General and administrative expenses increased by $3,231,889 in 2014 due to an increase in stock compensation, investor relations, professional and consulting fees relating to our licensing process, and the addition of six employees. Travel expenses have also increased due to the licensing process in multiple states.

Other Income/(Expense). Other income decrease by $274,884 in 2014 due to the change in the fair value of convertible notes and warrants that were settled.

Liquidity and Capital Resources

We had cash balances totaling $1,638,269 as of September 30, 2014. Historically, our principal source of funds has been cash generated from financing activities.
 
 
Cash flow from operations. We have been unable to generate either significant liquidity or cash flow to fund our current operations. We anticipate that cash flows from operations will be insufficient to fund our business operations for the next twelve-month period.
 
 
Based upon our cash position, we will need to raise additional capital prior by the end of fiscal 2015 in order to fund current operations. These factors raise substantial doubt about our ability to continue as a going concern. We are pursuing several alternatives to address this situation, including the raising of additional funding through equity or debt financings. We are in discussions with our existing stockholders to provide additional funding in exchange for notes or equity. In order to finance existing operations and pay current liabilities over the next twelve months, we will need to raise $3,150,000 of capital. However, there can be no assurance that the requisite financing will be consummated in the necessary time frame or on terms acceptable to us. Should we be unable to raise sufficient funds, we may be required to curtail our operating plans or possibly cease operations. No assurance can be given that we will be able to operate profitably on a consistent basis, or at all, in the future.
 
Cash flows from investing activities. There was $97,865 and $0 cash used in investing activities for the six months ended September 30, 2014 and 2013.
 
Cash flows from financing activities. Net cash provided by financing activities was generated from the sale of equity that totaled $3,842,112 and $26,000 for the six months ended September 30, 2014 and 2013.
 
Variables and Trends
 
We have no operating history with respect to our current business plan. In the event we are able to obtain the necessary financing to move forward with our business plan, we expect our expenses to increase significantly as we grow our business. Accordingly, the comparison of the financial data for the periods presented may not be a meaningful indicator of our future performance and must be considered in light these circumstances.
 
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Critical Accounting Policies
 
General
 
The preparation of financial statements requires management to utilize estimates and make judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. These estimates are based on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. The estimates are evaluated by management on an ongoing basis, and the results of these evaluations form a basis for making decisions about the carrying value of assets and liabilities that are not readily apparent from other sources. Although actual results may differ from these estimates under different assumptions or conditions, management believes that the estimates used in the preparation of our financial statements are reasonable. Policies involving the most significant judgments and estimates are summarized below.
 
Fair Value of Financial Instruments
 
The Company holds certain financial liabilities which are measured at fair value on a recurring basis in accordance with ASC Topic 825-10-15. ASC Topic 820-10 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). ASC Topic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability.
 
Convertible notes issued with detachable warrants were measured at fair value, in accordance with ASC Topic 825-10-15, as one instrument, and that fair value was allocated to each component. The Company made the fair value election due to this methodology providing a fairer representation of the economic substance of the transaction within the fair value hierarchy. Due to the lack of relevant and market reflective Level 1 and Level 2 inputs, the Company valued the instruments using Level 3 inputs, which require significant judgment and estimates on behalf of management in developing model assumptions. The factors considered in developing those assumptions included; the Company’s inability to attract investment at terms more favorable to the Company, the lack of success in developing oil properties thus far, the continuing reduction in the net assets of the Company and the Company’s history of default on currently outstanding debt.
 
Based on management’s evaluation of the assumptions discussed above, the liabilities were initially recorded in an amount equal to the transaction price, which represented the fair value of the total liability at initial recognition. The model used by the Company is calibrated so that the model value at initial recognition equals the transaction price. On an ongoing basis the fair value model used in valuing the convertible notes and derivative liability utilizes the following inputs; exercise price per warrant, conversion price per share, contract term, volatility, current stock prices and risk free rates. The following assumptions were made in the model: (1) risk free interest rate of 0.19% to 0.51%, (2) remaining contractual life of 1 to 4.98 years, (3) expected stock price volatility of 697% and (4) expected dividend yield of zero.
 
- 17 -
 
Equity-Based Compensation
 
The computation of the expense associated with stock-based compensation requires the use of a valuation model. The FASB issued accounting guidance requires significant judgment and the use of estimates, particularly surrounding Black-Scholes assumptions such as stock price volatility, expected option lives, and expected option forfeiture rates, to value equity-based compensation. We currently use a Black-Scholes option pricing model to calculate the fair value of our stock options. We primarily use historical data to determine the assumptions to be used in the Black-Scholes model and have no reason to believe that future data is likely to differ materially from historical data. However, changes in the assumptions to reflect future stock price volatility and future stock award exercise experience could result in a change in the assumptions used to value awards in the future and may result in a material change to the fair value calculation of stock-based awards. This accounting guidance requires the recognition of the fair value of stock compensation in net income. Although every effort is made to ensure the accuracy of our estimates and assumptions, significant unanticipated changes in those estimates, interpretations and assumptions may result in recording stock option expense that may materially impact our financial statements for each respective reporting period.
 
Property and Equipment
 
Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets: 3-8 years for machinery and equipment, leasehold improvements are amortized over the shorter of the estimated useful lives or the underlying lease term. Repairs and maintenance expenditures which do not extend the useful lives of related assets are expensed as incurred.
 
Intangibles
 
Intangible assets with definite lives are amortized, but are tested for impairment annually and when an event occurs or circumstances change such that it is more likely than not that an impairment may exist. Our annual testing date is March 31. We test intangibles for impairment by first comparing the carrying value of net assets to the fair value of the related operations. If the fair value is determined to be less than carrying value, a second step is performed to compute the amount of the impairment. In this process, a fair value for intangibles is estimated, based in part on the fair value of the operations, and is compared to its carrying value. The shortfall of the fair value below carrying value represents the amount of intangible impairment. We test these intangibles for impairment by comparing their carrying value to current projections of discounted cash flows attributable to the customer list. Any excess carrying value over the amount of discounted cash flows represents the amount of the impairment.
 
Off Balance Sheet Arrangements
 
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
 
Stock-Based Compensation
 
Please see page F-6, Note 3 of the audited financial statements.
 
Recent Accounting Pronouncements
 
Please see page F-6, Note 3 of the audited financial statements.
 
- 18 -
 

BUSINESS
 
Company Background
 
Our company was incorporated in the State of Delaware on April 4, 2001, under the name “Flagstick Venture, Inc.” On March 28, 2008, a majority of our stockholders approved changing our name to Signature Exploration and Production Corp. as our business model had changed to become an independent energy company engaged in the acquisition and development of crude oil and natural gas leases in the United States.
 
On March 18, 2014, we purchased assets from Craig Ellins, which included the revolutionary GrowBLOX™ technology. We plan to utilize this technology to commercially cultivate and produce medical grade cannabis for sale in the U.S. states and territories in which it is legal. We also plan to research the medical treatment potential of cannabis and develop treatments from those findings. On April 4, 2014, we officially changed our name to GrowBLOX™ Sciences, Inc. to reflect this new corporate direction.
 
Our common stock is quoted for trading on the OTC Market QB under the symbol GBLX.
 
Our principal executive offices are located at 7251 West Lake Mead Blvd., Suite 309, Las Vegas, NV 89128. Our telephone number is (884) 843-2569.
 
Business Strategy
 
GrowBLOX™ Sciences, Inc. maintains two research and development focuses: research in indoor agriculture technology for the medical cannabis industry and biopharmaceutical product development specializing including research, testing, and development of FDA-approved medical treatments and nutraceuticals using extracts from the Cannabis sativa plant.
 
To accomplish our biopharmaceutical strategy, the Company has designed the GrowBLOX™ system, a proprietary technology that allows for completely controlled growing conditions, ensuring the manufacture of a consistent, toxin-free, natural, medicinal-grade cannabis and cannabis concentrates. We will use this, and related cutting-edge technologies and methodologies, to commercially cultivate, produce, and market products which will provide patients with valuable medicines expected to make a difference in their quality of life. We expect to begin to generate revenue from the operations described in this paragraph in the second quarter of 2015.
 
For our biopharmaceutical product development, we will employ a two-phase strategy. Initially, we will use an accelerated near-term "virtual pharma" strategy to fast-track treatments to market. The method, in partnership with respected, independent contract research organizations, would include exploring existing cannabinoid patents with promising product prototypes, receiving licensing for selected product prototypes and testing through human trial phases for FDA approval, and co-developing the resulting drugs/treatments for marketing and sale. This accelerated phase would shorten the anticipated time from 15 years/$1 billion to an estimated 3.5 years/$7-20 million. We expect to begin to generate revenue from the operations described in this paragraph in approximately five years from now.
 
 
- 19 -
 
We will also utilize a longer-term traditional pipeline approach which will allow us to capture more of the value created from our cannabis-derived extracts using a vertically-integrated model that will allow for growth through addressing treatments for multiple illnesses and through expanding manufacturing and distribution to other companies. Additional near-term revenue may be generated through licensing opportunities. Through both our biotech and biopharmaceutical research strategies, our ultimate goal is to be an industry leader in the cultivation technology and research and development of medical cannabis drugs and treatments.
 
In order to further our ' virtual pharma" strategy, GB Sciences, Inc. is looking to partner with companies that have promising synthetic cannabinoid technology, or license their proprietary formulations, and then leverage our contacts with contract research organizations to get these therapies tested in human clinical trials for eventual approval by the US FDA. GB Sciences has undertaken a search for promising cannabinoid technologies and related therapies by attending research conventions (ie. the 24th International Cannabinoid Research Society Meeting sponsored by GW Pharma the leader in cannabinoid therapies) and through our network of contacts. Our business development and science team have been in multiple rounds of talks with two very promising partners. Our goal is to form a partnership or license their technologies. We will act as the accelerators of the product development through our financial resources, experience with triais, and the relationships that we have with Clinical Research Organizations.
 
In order to accomplish the establishment of a traditional pharmaceutical style pipeline of new products for eventual human clinical testing and submission to the US FDA, we are creating custom blends of extracted cannabinoids from our plants for testing at the pre-clinical level (cell culture and animal models) first. The initial blends will be screened in the future through a collaboration with an academic research lab and then the most promising candidates for cannabinoid therapies in each disease category (pain-management, anxiety, Parkinson's disease) will be tested through human clinical trial phase I (safety), phase II (efficacy over time-limited enrollment), and phase III (efficacy over time with full patient enrollment).
 
Markets
 
To accomplish the aforementioned strategy, we endeavor to secure a strong technological presence in all U.S. states and territories that have, or are seeking, to legally allow cultivation, production, and distribution of medical-grade cannabis. We are developing corporate partnerships in those locations in order to maximize the value of our technology and shareholder returns. Upon receiving the appropriate licenses in each location, we will establish our proprietary growing system to produce medical grade cannabis for that region. We will also partner with the local medical community to distribute the appropriate products needed to improve their patients’ quality of life.
 
As part of implementing our strategy in Nevada, we sought cultivation and dispensary licenses for medicinal cannabis in Nevada. On November 3, 2014, our license application to cultivate cannabis in Nevada was granted. However, on the same day, our license applications to distribute cannabis were denied. Accordingly, in Nevada the Company will be able to cultivate cannabis but distribution of the cannabis produced in the growing process will be through retailers who have received cannabis distribution licenses. I t is the company’s intention that many of the initiatives outlined in the Business Strategy section, will take place in Nevada and other appropriate locations.
 
The company has also recently hired a new Chief Science Officer and two PhD-level scientists in order to engage in the research and development of biopharmaceutical and neutraceutical applications of our medical-grade marijuana and medical-grade cannabinoid extracts. The company is working on licensing its initial biopharmaceutical cannabinoid product prototype to begin clinical trials. In addition, we are looking for co-development partners to assist us with growing our own phytocannabinoid-based biopharmaceutical product pipeline.
 
- 20 -
 
Competition
 
In Nevada, there will be numerous applicants who, along with the Company, will be granted provisional cultivation licenses. While it is too early to determine how many licenses will ultimately be developed and opened, the Company must assume that there will be significant competition in the cultivation of medical cannabis in Clark County, Nevada. The Company believes that its proprietary GrowBlox technology which starts from the inception of the growth process through the curing of the final product will yield the highest quality, consistent, medical grade cannabis. available in the market. The Company believes that this will give it a competitive advantage in the marketplace.
 
Intellectual Property
 
The company currently has one patent pending and opportunity for several potential patents. Our key technology is the patent-pending indoor agricultural growing chamber known as the GrowBLOX™. The GrowBLOX™ is a controlled-climate indoor agricultural growing chamber designed and engineered to cultivate medical-grade cannabis plants. The GrowBLOX™ chambers create the ideal growing environment for each plant by monitoring and adjusting the light, humidity, nutrition, temperature and aeration, while excluding outside stresses like, toxins, pathogens and pests. This customized environment ensure maximum harvest of the finest grade product which will provide patients with specific treatment options and consistently deliver the quality and efficacy expected from a medical-grade cannabis product.
The GrowBLOX™ system is very environmental and user friendly as it utilizes the following technologies:
 
·
GrowBLOX’s™ AeroVAPOR™ misting system delivers all of the moisture, nutrients and oxygen the cannabis plants need to grow through a misting system that recycles the water used. Absolutely, no gray water remains that would traditionally be released back into the environment.
·
Energy-efficient LED lighting system.
·
Integrated, intelligent control system that continuously monitors, manages, records, and analyzes the cultivation methodology for optimal growth.
·
Remote monitoring system sends alerts via text, email and telephone to our scientists, botanists and cultivators, recommending adjustments to the chambers cultivation levels.
 
Additional patents relating to the GrowBLOX™ technology are currently being sought and will be added to our portfolio of industry-leading technology.
 
- 21 -
 
We also anticipate patent applications in conjunction with our research, testing, and development of biopharmaceutical treatment options using the phytocannabinoids present in the cannabis plant. Cannabis sativa contains 70 naturally occurring cannabinoids. These cannabinoids, either in isolated form or in varying combinations within strains of cannabis plants, are either proven, or have the potential, for treatment of numerous conditions, including pain; nausea, seizure and inflammation reduction; tumor inhibition; psychotic and anxiety issue; and muscle spasms. This research will be facilitated by our GrowBLOX™ controlled indoor growing system which will provide scientists with the necessary consistent samples containing adequate cannabinoid levels from harvest to harvest, thus removing environmental variables.
 
Government Regulation
 
Currently, there are twenty states plus the District of Columbia that have laws and/or regulation that recognize in one form or another legitimate medical uses for cannabis and consumer use of cannabis in connection with medical treatment. Fifteen other states are considering legislation to similar effect. As of the date of this writing, the policy and regulations of the Federal government and its agencies is that cannabis has no medical benefit and a range of activities including cultivation and use of cannabis for personal use is prohibited on the basis of federal law and may or may not be permitted on the basis of state law.
 
Related Party Transaction
 
On March 13, 2014, the Company acquired from Craig Ellins assets to be used in the production and use of cannabis (the “Assets”). At that time there were approximately twenty-one states plus the District of Columbia that had laws and/or regulations that recognized in one form or another medical uses for cannabis and consumer use of cannabis in connection with medical treatment. The Assets equipped the Company to be among the first to provide methods of cannabis production for the uses that are being legislated in the various states. The Assets included:
 
·
a provisional patent application associated with the production or use of cannabis;
·
concepts associated with the production, use of, or in any way connected with cannabis conceived or developed by Mr. Ellins or his associates;
·
trademarks;
·
business plans;
·
investor presentations and histories;
·
websites;
·
trade secrets including without limitation trade secrets involving nutrient mixes;
·
drawings and digital artwork;
·
research analysis and reports, including without limitation a report entitled “GrowOpp Hydroponic Agriculture;
·
raw materials associated with the production and use of cannabis;
·
production equipment and related assets including without limitation electrical equipment, plastic molds and internal parts;
·
proof-of-concept equipment; and
·
URL’s associated with or intended to be associated with the production, use of, or in any way connected with cannabis.
 
In exchange for the Assets, the Company has issued to Mr. Ellins 12,500,000 restricted shares of the Company’s common stock. The stock and assets were valued in accordance with SAB Topic 5(G), Transfers of Nonmonetary Assets by Promoters or Shareholders. The assets value was $33,457.
 
Approval of Related Party Transactions
 
Related party transactions are reviewed and approved or denied by the board of directors of the Company. If the related party to a transactions is a member of the board of directors, the transaction must be approved by a majority of the board that does not include the related party.
 
Employees
 
We currently employ a Chief Executive Officer, Chief Science Officer, and a support staff of six employees and contractors.
 
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Properties
 
Our executive offices are located at 7251 West Lake Mead Blvd, Suite 300, Las Vegas, NV 89128.
 
Legal Proceedings
 
On April 2, 2014, the Company commenced an action in the United States District Court for the Southern District of New York against GCM Administrative Services, LLC (“GCM”), Strategic Turnaround Equity Partners, L.P., Gary Herman, and Seth M. Lukash. The action was brought for the purpose of determining whether the defendants or any of them were entitled to receive stock in the Company pursuant to conversion rights held under promissory notes given by an affiliate of the Company to GCM. The defendants answered the compliant and brought five counterclaims back against the Company. The counterclaims were for declaratory judgment, damages for breach of fiduciary duty and unjust enrichment, a money award for quantum meruit, and for breach of contract for refusing to convert the notes into shares. No specific amount of money damages is identified in the counterclaims. The Company believes the court will rule that there are no conversion rights pursuant to which the Company will be required to issue stock and that the counterclaims are without merit.
 
MANAGEMENT
 
Executive Officers and Directors
 
The names of our executive officers and directors, their ages as of December 3, 2014, and the positions currently held by each are as follows:
 
Name
Age
Position
     
Craig Ellins
62
Chief Executive Officer and Chairman of the Board
Cathryn J. Kennedy 56 Chief Financial Officer and Chief Accounting Officer
Dr. Andrea Small-Howard
45
Chief Science Officer and Director
 
Craig Ellins, Chairman and Chief Executive Officer
 
Mr. Ellins was appointed as our Chief Executive Officer and as chairman of our board of directors on March 13, 2014, and has served continuously in both positions since that time. Mr. Ellins has spent over 30 years discovering emerging trends and developing start-ups for various industries. He has served as Chief Executive Officer and on the Board of Directors of numerous organizations, both in the private and public sectors and has worked with a multitude of Fortune 500 organizations. Mr. Ellins has a proven and successful background in international and domestic product and business development, technological innovation, trade secrets, strategic planning, critical infrastructure and sustainable growth. Mr. Ellins continuously sets new standards for innovation and most recently set his sights on the cannabis industry. His work in medical marijuana has produced significant advancements in indoor growing technology, all of which have pending patents. Mr. Ellins has worked diligently over the years to produce state-of-the-art technology that has a substantial impact on cultivation and ingenuity. Finding treatments to serious medical conditions has become the benchmark to Mr. Ellins technological innovation, out of which has come the GrowBLOX™. Mr. Ellins’ rich history of new technology and financial expertise has created a framework for change in technological enterprises, especially in cultivation.
 
From 2013 to 2014, Mr. Ellins served as the Chairman and CEO of Cognitiv, Inc. Cognitiv, Inc., together with its subsidiaries, engages in the creation, development, and maintenance of Websites and mobile applications. It also provides Website search engine optimization services; email marketing services; pay per click consultation services; social media consultation, creation, and marketing services; domaining services; and mobile marketing services. The company was formerly known as University Health Industries, Inc. and changed its name to Cognitiv, Inc. in March 2012. Cognitiv, Inc. is based in Heathrow, Florida. As Chairman and CEO, Mr. Ellins was responsible for all aspects of the company.
 
From 2009 to 2013, Mr. Ellins served as CEO and Chairman of Phototron Holdings, Inc., now known as GrowLife, Inc. GrowLife, Inc. manufactures and supplies branded equipment and expendables for urban gardening in the United States. The company offers equipment and expendables, such as nutrients and soils for the growing of medical marijuana. As Chairman and CEO, Mr. Ellins was responsible for all aspects of the company.
 
Cathryn J. Kennedy, Chief Financial Officer and Chief  Accounting Officer
 
Effective December 9, 2014, Cathryn J. Kennedy was appointed as our Chief Financial Officer and Chief Accounting Officer.  From 2013 to the present Ms. Kennedy served as controller and secretary to the board of directors of American Optical Services. American Optical Services owns and operates ophthalmology and optometry practices across the U.S.  As controller, she managed P&L, cash flow, implemented audit policies and managed financial reporting and tax return preparation with a national firm.  She managed personnel in the accounting and treasury departments.

From 2008 through 2013, Ms. Kennedy worked for eCommLink, Inc.  eCommLink, Inc. is a  prepaid card processor which supports a full array of global and domestic payments and transactions, which was sold via asset sale to Green Dot.  From 2011 to 2013 she served as CFO, from 2010 to 2011 she served as Vice President of Finance and as controller from 2008 to 2010.

From 2005 to 2008, Ms. Kennedy served as director of SEC reporting for Pinnacle Entertainment Inc., an entertainment company with 15 hotel and gaming operations located in the U.S.  Prior to 2005, she served as controller for American Wagering Inc. overseeing all corporate reporting, consolidations, financial preparations, preparation of SEC reports on forms 10QSB and 10KSB, and preparation of NGC tax filings, and oversaw gaming audits and compliance.
 
 

 
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Dr. Andrea Small-Howard, PhD, MBA, Chief Science Officer and Board of Directors
 
Dr. Small-Howard was appointed as our Chief Science Officer and as a member of our board of directors on June 10, 2014 and has served continuously in both positions since that time. As the Chief Science Officer, her goal is to create and maintain a novel cannabinoid therapy pipeline based on the Company's proprietary technology suite, direct research & development efforts, facilitate clinical research partnerships, guide product commercialization strategies, develop corporate cannabis education programming, and create corporate messaging around our novel drug discovery process.
 
 
From January, 2012 to present, she has served as a Director on the Board of Directors at The Center for Healthcare Innovation, "CHI". CHI is a non-profit, non-partisan, and independent organization committed to serving as a catalyst for stimulating ideas, people, companies, and institutions to collaborate and achieve excellence in healthcare innovation, particularly in the biotechnology, medical device, nanotechnology, and pharmaceutical sectors. The CHI vision is to become the world’s #1 independent thought-leadership institution and “think tank” for the global pharmaceutical and life sciences community. Her board level responsibilities at CHI have included shaping and supporting the evolving mission of this dynamic group. She has also been on the planning committee for their annual "Emerging Markets in the Life Sciences" seminar series, which is now in its 5th consecutive year.
 
 
From July 2011 to June 2014, she was the Founder and President of International Biotechnology Solutions. International Biotechnology Solutions was a management consulting firm that created customized, cost-effective commercialization solutions for viable yet abandoned biopharmaceutical products. Based on her understanding that the paradigm by which biotechnology and pharmaceutical products reach the market had fundamentally changed, she explored new avenues to bring healthcare products to market in regions where there were unique needs. International Biotechnology Solutions had provided management consulting with a focus on assisting US biotech companies with products that could be commercialized within the Asia-Pacific region. In particular, developing commercialization solutions to meet the needs of the healthcare market in the Asia-Pacific region could be more cost effective and benefit a larger patient population. In her consulting, she successfully completed projects within the areas of business development, corporate alliance building, product commercialization, due diligence reporting on medical marijuana companies, corporate restructuring, and management of successful fund raising campaigns.
 
 
From June 2011 to March 2013, she served as a Director on the Board of Directors (President for part of that time), for the Ceremax Investment Corporation. The Ceremax Investment Group was established by members of the USC EMBA Class XXV to pool its financial and intellectual resources to identify investment opportunities. Ceremax's mission was to capitalize on the collective experiences and pool of contacts of its members to source, underwrite, and manage these investment opportunities. Additionally, Ceremax would provide a channel for its members to strengthen the relationships first developed in the classroom while attending USC. Within the context of Ceremax, she reviewed and approved capital and resource investments in promising start-up or scale-up phase private companies.
 
 
From November, 2008 to July, 2011, she served as the Vice President of Scientific Oversight for the Radient Pharmaceutical Corporation. At that time, Radient Pharmaceutical Corporation was a vertically-integrated biopharmaceutical research, development and manufacturing corporation with operations in both the US and China. At the Radient Pharmaceutical Corp, she provided oversight for global product development in multiple international business divisions. She authored and/or attained 12 patents & 3 trademarks on proprietary cancer tests, cancer (gene) therapies, cosmeceuticals, and animal models. She achieved numerous regulatory approvals for cancer tests, cancer therapies, pharmaceuticals, and cosmeceutical products with US FDA, Health Canada, Korean FDA, China SFDA, Taiwanese Ministry of Health, Indian Ministry of Health. I initiated and/or nurtured 5 international, collaborative, cancer research trial programs with universities and hospitals studying colon, lung, and pancreatic cancer; as well as general cancer screening programs that yielded 7 publications supporting cancer products. She championed Elleuxe®/Goodnak® cosmeceutical line: a) provided oversight for formulations, safety & effectiveness testing, regulatory strategy; b) led branding committee and created marketing materials with external agencies; c) created commercialization strategy, sourced US raw materials, hired contract manufacturers. She advised the CEO and CFO on Production Capacity as the Management Representative. She supervised the Quality Management Systems for the ISO 13485/cGMP compliant medical device manufacturing facility in the US; as well as the Chinese SFDA regulated and cGMP regulated manufacturing facilities in China. She also led and participated in internal and US FDA, CDPH, CE Mark/ISO 13485, and CMDR audits of our Quality Management System.
 
During the past five years none of our directors, executive officers, promoters or control persons was:
 
1)
the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
2)
convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
3)
subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
4)
found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law.
 
Director Independence
 
We do not have any independent directors serving on our Board of Directors. The definition the Company uses to determine whether a director is independent is NASDAQ Rule 4200(a)(15). See Exhibit 99 hereto.
 
- 24 -
 
EXECUTIVE COMPENSATION

The following summary compensation table reflects all compensation awarded to, earned by, or paid to our Chief Executive Officer and president and other employees for all services rendered to us in all capacities during each of the years ended March 31, 2014, 2013 and 2012. Mr. Weldon resigned his positions as an officer and director of the Company effective November 21, 2014 to accept another career opportunity.
 
Summary Compensation Table
 
Name and Position
Year
Salary($)
All Other Compensation
Total($)
         
Craig Ellins, CEO and Chairman of the Board
2014
2013
2012
6,125
0
0
0
0
0
6,125
0
0
Steven Weldon, CFO and Director
2014
2013
2012
2,000
0
0
0
0
0
2,000
0
0
Dr. Andrea Small-Howard, Chief Science Officer and Director
2014
2013
2012
0
0
0
0
0
0
0
0
0
 
Employment Agreements
 
The Company has employment agreements with its Chief Executive Officer and its Chief Science Officer summarized as follows:
 
The term of the employment agreement with our CEO, Craig Ellins, commenced on March 17, 2014, and continues for three years. During the first year Mr. Ellins receives cash compensation of $147,000. During the second year he receives cash compensation of $180,000. During the third year he receives cash compensation of $240,000. The employment agreement also grants to Mr. Ellins 3,000,000 shares of common stock which vests over the three year term.
 
The term of the employment agreement with our Chief Science Officer, Andrea Small-Howard, commenced on June 10, 2014, and continues for three years. During the term of the agreement, Ms. Small-Howard receives cash compensation of $78,000 annually. The employment agreement also grants to her 450,000 shares of common stock which vests over the three year term.
 
- 25 -
 
Directors’ Compensation
 
Directors are not currently compensated, although each is entitled to be reimbursed for reasonable and necessary expenses incurred on our behalf. All directors hold office until the next annual meeting of stockholders and until their successors have been duly elected and qualified. There are no agreements with respect to the election of directors. Officers are appointed annually by the Board of Directors and each executive officer serves at the discretion of the Board of Directors. Our board of directors does not have an audit or any other committee.
 
VOTING SECURITIES AND PRINCIPAL HOLDERS
 
The following table presents information known to us, as of December 22, 2014, relating to the beneficial ownership of common stock by:
 
·
each person who is known by us to be the beneficial holder of more than 5% of our outstanding common stock;
·
each of our named executive officers and directors; and
·
our directors and executive officers as a group.
We believe that all persons named in the table have sole voting and investment power with respect to all shares beneficially owned by them, except as noted.
 
Percentage ownership in the following table is based on 34,904,926 shares of common stock outstanding as of December 3, 2014. A person is deemed to be the beneficial owner of securities that can be acquired by that person within 60 days from the date of this Annual Report upon the exercise of options, warrants or convertible securities. Each beneficial owner’s percentage ownership is determined by dividing the number of shares beneficially owned by that person by the base number of outstanding shares, increased to reflect the shares underlying options, warrants or other convertible securities included in that person’s holdings, but not those underlying shares held by any other person.
 
Beneficial Owner
 
Amount and Nature of
Beneficial Ownership
 
Percentage
         
Craig Ellins
 
7,520,000 (3)
 
19.3%(3)
Lazarus Investment Partners, LLLP (2)
 
3,000,000 Direct
 
8.7%
Andrea Small-Howard
 
50,000 Direct
 
0.1%
Cathryn J. Kennedy     0     n/a
All directors and executive officers as a group ( 3 persons)
 
7,570,000 (3)
 
19.5%(3)
(1)
(2)
Unless otherwise noted, the address of each person listed is c/o Growblox Sciences, Inc. 7251 West Lake Mead Blvd, Suite 300, Las Vegas, NV 89128.
Lazarus Investment Partners, LLLP. c/o Lazarus Management Company LLC, 3200 Cherry Creek South Drive, Suite 670,Denver, CO 80209.
(3)
Of this amount, 4,000,000 of the shares are held indirectly and the remainder are held directly. Mr. Ellins is the beneficial owner of the 4,000,000 shares held indirectly and will receive the shares upon the filing of two additional provisional patent applications for technology inside the GrowBLOX Controlled Environment Agricultural Chamber. The percentage calculation for Mr. Ellins and for the directors and executive officers as a group, assumes that the 4,000,000 shares indirectly and beneficially owned by Mr. Ellins were issued and outstanding.  All other percentages were calculated based upon shares actually issued and outstanding.
 
- 26 -
 
SELLING STOCKHOLDERS
 
This prospectus relates in part to the offer and sale from time to time by the selling stockholders of 10,000,000 shares of common stock that have been issued. There can be no assurance that the selling stockholders will sell any or all of their common stock offered by this prospectus. We do not know if, when, or in what amounts, the selling stockholders may offer the common stock for sale.
 
Selling Stockholders
 
The following table sets forth:
 
·
the names of the selling stockholders;
·
the number of shares of common stock beneficially owned by each of the selling stockholders before the offering;
·
the number of shares of common stock being registered with respect to each selling stockholder;
·
the number of shares of common stock beneficially owned by each of the selling stockholders after the offering; and
·
the person with voting or investment control if the stockholder is not a natural person.
 
This table is based on information furnished to us by or on behalf of the selling stockholders. As of December 3, 2014, there were 34,904,926 shares of common stock outstanding. To the extent that any successor(s) to the named selling stockholder(s) wish to sell under this prospectus, we will file a prospectus supplement identifying such successors as selling stockholders.
 
- 27 -
 
Selling Stockholder
Shares Beneficially Owned Before the Offering
Shares Being Registered (1)
Shares Beneficially Owned After the Offering
Person with Voting or Investment Control
         
Robbie Acevedo
20,000
60,000
0
 
Airmont Trust
20,000
60,000
0
Brad Houtkin
Gary Avendano
30,000
90,000
0
 
Marvin Beutz
30,000
90,000
0
 
Lawrence & Barbara Cagney
200,000
600,000
0
 
Carmik Family Trust (4)
111,112
333,336
0
Michael Viellon
Thomas & Theresa Ciano
20,000
60,000
0
 
Hammer Family Trust 3/13/2000 (3)
177,777
533,331
0
James Hammer
Deltazulu Investments, LLC
200,000
600,000
0
David Zemach
The Raben Education Trust (2)
50,000
150,000
0
Bruce Raben
ELGJO, LLC
100,000
300,000
0
Lawrence Ordower
Scott Elsas
60,000
180,000
0
 
Bruce I. Famalian Irrevocable Trust
88,500
265,500
0
Bruce Famalian
Bruce Famalian Revocable Trust
88,500
265,500
0
Bruce Famalian
Michael Figler
88,500
265,500
0
 
Jose Fune
40,000
120,000
0
 
Glen Gabisan
100,000
300,000
0
 
Gitel Family Partnership, LP
100,000
300,000
0
Ester Stahler
Chris Gordon
1,500,000
4,500,000
0
 
Michael & Sheila Hoffman
10,000
30,000
0
 
Richard Hunt (2)
20,000
60,000
0
 
William Hunt (2)
20,000
60,000
0
 
Investors League Special Opportunity Fund I, LP (2)
50,000
150,000
0
Adam Pasholk
James & Joan Family Limited Partnership
50,000
150,000
0
James Hammer
The JEM Living Trust dated 9-19-2004
100,000
300,000
0
James Meservey
Charles Knapp SEP IRA DCG&T TTEE
20,000
60,000
0
 
Michael Kodsi
40,000
120,000
0
 
Loic & Ann Lamouruex
20,000
60,000
0
 
LDP Family Partnersip, LP
100,000
300,000
0
Laya Perlysky
Simon Asset Management LLC
200,000
600,000
0
Howard Liebreich
Joseph and Christina Malcheski
68,000
204,000
0
 
Meservery Family Trust DTD 12-19-1994 (3)
177,777
533,331
0
James Meservey
Melissa L Beuchat 1998 Irrevocable Trust
177,777
533,331
0
Melissa Beuchat
MH Life, LLC
177,777
533,331
0
Barry Moore
John & Maria Moeller
20,000
60,000
0
 
Craig Nakamura
32,000
96,000
0
 
Neurological Associates
100,000
300,000
0
James Adametz
Lawrence Ordower
100,000
300,000
0
 
Adam Pasholk (2)
50,000
150,000
0
 
Plaza Services, LLC
20,000
60,000
0
William Hunt
Warren Postman
150,000
450,000
0
 
Raben Family Foundation (2)
50,000
150,000
0
Bruce Raben
James & Jennifer Robinsom
50,000
150,000
0
 
Romero Oak Terrace, LLC
200,000
600,000
0
Moshe Zemach
Maj-Britt Rosenbaum
56,000
168,000
0
 
Christine Sclafani
20,000
60,000
0
 
Cheryl Schwartz
20,000
60,000
0
 
Stephen Schwimmer
10,000
30,000
0
 
Keith Testaverde (2)
50,000
150,000
0
 
Theodore Deikel Trust
500,000
1,500,000
0
Theodore Deikel
VCM South LLC
20,000
60,000
0
Scott Feiwell
W-Net Fund I, LP
200,000
600,000
0
David Weiner
Elizabeth Zarraga IRA DCG&T TTEE
14,000
42,000
0
 
Marc Zarraga
20,000
60,000
0
 
Lazarus Investment Partners LLLP (2)
3,000,000
9,000,000
0
Elliot Penn
Lazarus Israel Opportunities Fund LLLP (2)
1,000,000
3,000,000
0
Elliot Penn
Network 1 Financial Securities, Inc. (2)
0
495,000
0
William Hunt
Damon Testaverde (2)
0
900,000
0
 
William Heming (2)
0
135,000
0
 
Peter Fulton (2)
0
1,095,000
0
 
Joel Marcus (2)
0
15,000
0
 
Miguel Zarraga (2)
0
30,000
0
 
Richard Hunt (2)
0
30,000
0
 
William Hunt (2)
0
30,000
0
 
Scott Elsas (2)
0
30,000
0
 
Keith Testaverde (2)
0
180,000
0
 
Adam Pasholk (2)
0
60,000
0
 
 
(1) Each number represents shares beneficially owned by the selling stockholder before the offering and common shares that underlie warrants held by the selling stockholder.
 
(2) This selling stockholder or the person with voting or investment control of the shares owned by the selling stockholder is either a registered broker-dealer or is affiliated with a registered broker-dealer. Because of this, the selling stockholder is an underwriter.
 
(3) The Hammer Family Trust of which James D. Hammer is the trustee, owns a 17.78% membership interest in GBS Nevada Partners LLC and 177,777 shares of common stock in the Company. The Meservey Family Trust of which James M. Meservey is the trustee, also owns a 17.78% membership interest in GBS Nevada Partners LLC and 177,777 shares of common stock in the Company. Both the Hammer Family Trust and the Meservey Family Trust also each own warrants to purchase 355,554 common shares of the Company.
 
(4) Michael B. Viellion is a trustee and beneficiary of the Carmik Family Trust. Mr. Viellion is also the manager of MMJ Investment Facility, LLC which owns an 11.11% membership interest in GBS Nevada Partners LLC. The Carmik Family Trust also owns warrants to purchase 222,224 common shares of the Company.

 
- 28 -
 
PLAN OF DISTRIBUTION
The Selling Stockholders (the “ Selling Stockholders ”) of the common stock (“ Common Stock ”) of the Company and any of their pledges, assignees and successors-in-interest may, from time to time, sell any or all of their shares of Common Stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. The common shares are currently listed on the OTCQB under the symbol GBLX. The Selling Stockholders may use any one or more of the following methods when selling shares:
 
· ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
· block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
· purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
· an exchange distribution in accordance with the rules of the applicable exchange;
· privately negotiated transactions;
· settlement of short sales entered into after the date of this prospectus;
· broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share;
· a combination of any such methods of sale;
· through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; or
· any other method permitted pursuant to applicable law.
 
The Selling Stockholders may also sell shares under Rule 144 under the Securities Act of 1933, as amended (the “ Securities Act ”), if available, rather than under this prospectus.
 
Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with NASDR Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with NASDR IM-2440.
 
In connection with the sale of the Common Stock or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the Common Stock in the course of hedging the positions they assume. “Short sale” is the name given to a transaction that takes place when a person believes a company’s stock price is about to go down. The person borrows from his broker or other individual shares of the company’s stock and sells the borrowed shares at the current price. After the price goes down, the person buys in the market, shares of the company’s stock at the reduced price and uses the purchased shares to replace the shares that were borrowed. As a result of the short sale, the person succeeds in buying low and selling high. The buying and selling are simply reversed in order. Short sales can have the effect of driving down the trading price of a company’s stock. If a stock price is falling and stockholders are selling short, stock purchases for the purpose of replacing borrowed shares further depress the market and encourages additional short selling. The net effect can be a downward spiral of the stock price of the company.
 
- 29 -
 
The Selling Stockholders may also sell shares of the Common Stock short and deliver these securities to close out their short positions, or loan or pledge the Common Stock to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
 
The Selling Stockholders and any broker dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each Selling Stockholder has informed the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the Common Stock. In no event shall any broker-dealer receive fees, commissions and markups which, in the aggregate, would exceed eight percent (8%).
 
The Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the shares. The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
Because Selling Stockholders may be deemed to be “underwriters” within the meaning of the Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act. In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus. It is our understanding that no Selling Stockholder has entered into any written or oral agreements, understandings or arrangements with any underwriter or broker-dealer regarding the sale or the resale shares. There is no underwriter or coordinating broker acting in connection with the proposed sale of the resale shares by the Selling Stockholders.
 
We agreed to keep this prospectus effective until the earlier of (i) the date on which the shares may be resold by the Selling Stockholders without registration and without regard to any volume limitations by reason of Rule 144(e) under the Securities Act or any other rule of similar effect or (ii) all of the shares have been sold pursuant to the prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale shares will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
 
Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale shares may not simultaneously engage in market making activities with respect to the Common Stock for a period of two business days prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of shares of the Common Stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale.
 
- 30 -
 
DESCRIPTION OF CAPITAL STOCK
 
Our authorized capital stock consists of 250,000,000 shares of common stock, $0.0001 par value. As of December 3, 2014, 34,904,926 shares of common stock were issued and outstanding. The outstanding shares of common stock have been duly authorized and are fully paid and non-assessable.
 
Common Stock
 
The holders of common stock are entitled to one vote per share on all matters to be voted on by stockholders and are entitled to receive such dividends, if any, as may be declared from time to time by our board of directors from funds legally available therefore, subject to the dividend preferences of the preferred stock, if any. Upon our liquidation or dissolution, the holders of common stock are entitled to share ratably in all assets available for distribution after payment of liabilities and liquidation preferences of the preferred stock, if any. Holders of common stock have no preemptive rights, no cumulative voting rights and no rights to convert their common stock into any other securities. Any action taken by holders of common stock must be taken at an annual or special meeting or by written consent of the holders of over 50% of our capital stock entitled to vote on such action.
 
Warrants
 
As of December 3, 2014, Growblox has warrants issued and outstanding for the purchase of 23,000,000 shares of its common stock.
 
LEGAL MATTERS
 
Certain legal matters in connection with this offering will be passed upon for us by Gary R. Henrie, Attorney at Law, American Fork, Utah. These legal matters include that shares of common stock to be sold by the selling shareholders is validly issued, fully paid and non-assessable. Mr. Henrie's address is 486 W. 1360 N., American Fork, Utah 84003. Mr. Henrie is licensed to practice law in the State of Nevada, the state in which Growblox’ business operations are headquartered.
 
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
 
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable.
 
- 31 -
 
EXPERTS
 
The audited financial statements as of March 31, 2014 and March 31, 2013 included in this prospectus have been audited by L J Sullivan Certified Public Accountant, LLC, independent registered public accounting firm, as stated in their report appearing elsewhere herein, and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
 
WHERE YOU CAN FIND MORE INFORMATION
 
We have filed a registration statement on Form S-1 under the Securities Act with the Securities and Exchange Commission with respect to the shares of our common stock offered by this prospectus. This prospectus was filed as a part of that registration statement but does not contain all of the information contained in the registration statement and exhibits. Reference is thus made to the omitted information. Statements made in this prospectus are summaries of the material terms of contracts, agreements and documents and are not necessarily complete; however, all information we considered material has been disclosed. Reference is made to each exhibit for a more complete description of the matters involved and these statements are qualified in their entirety by the reference. You may inspect the registration statement, exhibits and schedules filed with the Securities and Exchange Commission at the Securities and Exchange Commission's principle office in Washington, D.C. Copies of all or any part of the registration statement may be obtained from the Public Reference Section of the Securities and Exchange Commission, 100 F. Street, N.E., Washington, D.C. 20549. The Securities and Exchange Commission also maintains a web site (http://www.sec.gov) that contains this filed registration statement, reports, proxy statements and information regarding us that we have filed electronically with the Commission. For more information pertaining to our company and the common stock offered in this prospectus, reference is made to the registration statement.
 
Upon the effective date of this registration statement and thereafter, we will file with the Securities and Exchange Commission annual and quarterly periodic reports on forms 10-K and 10-Q respectively and current reports on form 8-K as needed. We are not required to deliver annual reports to our shareholders and at this time we do not intend to do so. We encourage our shareholders, however, to access and review all materials that we will file with the Securities and Exchange Commission at http://www.sec.gov . Our SEC file number is 333-82580.

 
- 32 -
 

INDEX TO FINANCIAL STATEMENTS
 
Pages
Balance Sheets as of June 30, 2014 (Unaudited) and March 31, 2014
34
   
Statements of Operations (Unaudited) for the three month periods ended June 30, 2014 and June 30, 2013
35
   
Statements of Cash Flows (Unaudited) for the three month periods ended June 30, 2014 and June 30, 2013
36
   
Notes to Financial Statements
37
   
Report of Independent Registered Public Accounting Firm
41
   
Balance Sheets - March 31, 2014 and March 31, 2013
42
   
Statements of Operations - Years ended March 31, 2014 and 2013
43
   
Statements of Stockholders’ Equity (Capital Deficiency) - Years ended March 31, 2014 and 2013
44
   
Statements of Cash Flows - Years ended March 31, 2014 and 2013
45
   
Notes to Financial Statements
46

 
- 33 -
 

GROWBLOX SCIENCES, INC AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Condensed Balance Sheets

Assets
           
   
September 30,
   
March 31,
 
   
2014
   
2014
 
             
Current assets:
           
Cash
  $ 1,638,239     $ 339,327  
Subscription Receivable
    -       150,000  
Prepaid expenses and other current assets
    229,972       -  
                 
Total current assets
    1,868,211       489,327  
                 
Property and Equipment:
               
                 
                 
Property and Equipment, net
    141,439       44,922  
Intangible assets, net
    3,615       3,735  
                 
Total property and equipment
    145,054       48,657  
                 
Total assets
  $ 2,013,265     $ 537,984  
                 
Liabilities and Stockholders’
Equity (Deficiency)
               
                 
Current liabilities:
               
Accounts payable
  $ 21,294     $ 19,762  
Subscription payable
    16,000       10,000  
Accrued interest
    -       252,304  
Other accrued expenses
    -       1,847  
Notes from shareholders
    5,000       5,000  
Convertible notes from shareholders
    -       1,262,441  
                 
Total current liabilities
    42,294       1,551,354  
                 
Commitments and contingencies
    -       -  
                 
Stockholders’ equity (deficiency):
               
Common stock, $0.0001 par value, 250,000,000 shares authorized
               
34,363,276 and 7,268,948 shares issued and outstanding at                
September 30, 2014 and March 31, 2014     3,438       727  
Additional paid-in capital
    11,342,813       5,198,659  
Accumulated deficit
    (9,328,073 )     (6,212,756 )
                 
Total stockholders’ equity (deficiency)
    2,018,178       (1,013,370 )
Noncontrolling interest
    (47,207 )     -  
Total equity
    1,970,971       (1,013,370 )
                 
Total liabilities and stockholders’ equity (deficiency)
  $ 2,013,265     $ 537,984  

See accompanying notes to the financial statements.



 
- 34 -
 


GROWBLOX SCIENCES, INC AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Condensed Statements of Operations (unaudited)


   
For the Three Months Ended September 30,
   
For the Six Months Ended September 30,
 
   
2014
   
2013
   
2014
   
2013
 
                         
                         
Net revenue
  $ -     $ -     $ -     $ -  
                                 
Cost of revenue
    -       -       -       -  
                                 
Gross profit (loss)
    -       -       -       -  
                                 
General and administrative expenses
    1,780,161       13,982       3,275,358       43,469  
                                 
Loss from continuing operations
    (1,780,161 )     (13,982 )     (3,275,358 )     (43,469 )
                                 
Other income/(expense)
                               
                                 
Change in fair value of convertible notes
    -       135,905       -       135,905  
Change in fair value of warrants
    -       165,340       -       165,340  
Loss on extinguishment of debt
    -       -       -       -  
Loss on loan modification
    -       -       -       -  
Interest income
    160       -       334       -  
Interest expense
    -       (13,310 )     -       (26,027 )
 
                               
Total other income/(expense)
    160       287,935       334       275,218  
                                 
Total income/(expense)
    (1,780,001 )     273,953       (3,275,024 )     231,749  
Less net income (loss) attributable to noncontrolling interests
    (109,902 )     -       (159,707 )     -  
                                 
Net income/(loss)
  $ (1,670,099 )   $ 273,953     $ (3,115,317 )   $ 231,749  
                                 
Weighted average common shares outstanding – basic and diluted
    34,046,111       850,110       25,515,847       850,110  
                                 
Net income/( loss) per share - basic and diluted
  $ (0.07 )   $ 0.33     $ (0.12 )   $ 0 .28  




The accompanying notes are an integral part of the financial statements.


 
- 35 -
 

GROWBLOX SCIENCES, INC AND SUBSIDIARIES
(A Development Stage Company)
Condensed Consolidated Statements of Cash Flows
For the Six months ended September 30, 2014 and 2013

   
2014
   
2013
 
Cash flows from operating activities:
           
Net loss
  $ (3,115,317 )   $ 231,749  
Less net loss attributable to noncontrolling interest
    (159,707 )        
                 
Adjustments to reconcile net loss to net cash used in operating activities:
               
Depreciation expense
    1,338       128  
Amortization expense
    130       -  
Stock compensation
    1,033,258       -  
Non-cash interest
    -       3,982  
Change in fair value of convertible notes
    -       (135,905 )
Change in fair value of warrants
    -       (165,340 )
Changes in operating assets and liabilities:
               
Prepaid expenses
    (152,490 )     -  
Other assets
    (77,483 )     -  
Accounts payable
    (314 )     (475 )
Stock subscription payable
    25,250       -  
Accrued expenses
    -       37,435  
                 
Net cash used in operating activities
    (2,445,335       (28,426 )
                 
Cash flows from investing activities:
               
                 
Purchase of property and equipment
    (97,865 )     -  
                 
Net cash used in investing activities
    (97,865 )     -  
                 
Cash flows from financing activities:
               
Stock subscription receivable
    150,000       -  
Proceeds from issuance of stock
    3,579,612       -  
Proceeds from noncontrolling interest
    112,500       -  
Proceeds from issuance of debt to stockholders
    -       26,000  
                 
Net cash provided by financing activities
    3,842,112       26,000  
                 
Net increase (decrease) in cash
    1,298,912       (2,426 )
                 
Cash, beginning of year
  $ 339,327     $ 2,427  
                 
Cash, end of September 30, 2014
  $ 1,638,239     $ 1  
                 
Supplemental disclosures of cash flow information:
               
Cash paid during the year for:
               
Interest
  $ -     $ -  
                 
                 
Non-cash investing and financing activities:
               
Stock issued to settle convertible debt
  $ 1,262,411     $ -  
Stock issued to settle interest expense
  $ 252,304     $ -  
The accompanying notes are an integral part of the financial statements.

 
- 36 -
 

GROWBLOX SCIENCES, INC AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
September 30, 2014

NOTE 1 - ORGANIZATION AND PRINCIPLES OF CONSOLIDATION
 
 
The accompanying unaudited condensed financial statements have been prepared by the Company, pursuant to the rules and regulations of the U. S. Securities and Exchange Commission for Form 10-Q. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. The unaudited condensed financial statements included herein reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim period. Interim results are not necessarily indicative of the results that may be expected for the year. The unaudited condensed financial statements should be read in conjunction with the condensed financial statements and notes thereto, together with management’s discussion and analysis of financial condition and results of operation, for the year ended March 31, 2014, contained in the Company’s March 31, 2014 Annual Report on Form 10-K.

The Company’s consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has experienced net losses since April 4, 2001 which losses have caused an accumulated deficit of approximately $9,300,000 as of September 30, 2014. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.
 
 
Management has been able, thus far, to finance the losses through a public offering, private placements and obtaining operating funds from stockholders. The Company is continuing to seek sources of financing. There are no assurances that the Company will be successful in achieving its goals.
 
 
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 condensed 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 cannot continue as a going concern.
 
 
NOTE 2 – BASIS OF PRESENTATION

Reporting Entity. GrowBlox Sciences, Inc. (“GrowBlox” or “the Company”) was incorporated on April 4, 2001 under the laws of the State of Delaware. The Company is authorized to issue 250,000,000 shares of common stock, par value $.0001. On March 18, 2014, we purchased assets from Craig Ellins, which included the revolutionary GrowBLOX™ technology. We plan to utilize this technology to commercially cultivate and produce medical grade cannabis for sale in the U.S. states and territories in which it is legal. We also plan to research the medical treatment potential of cannabis and develop treatments from those findings. On April 4, 2014, we officially changed our name to GrowBLOX™ Sciences, Inc. to reflect this new corporate direction. The Company’s office is located in Las Vegas, Nevada.


 
- 37 -
 

GROWBLOX SCIENCES, INC AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
September 30, 2014


NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Development Stage Company . The Company is considered to be in the development stage.

Cash and Cash Equivalents. The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

Property and Equipment. Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets: 3-8 years for machinery and equipment, leasehold improvements are amortized over the shorter of the estimated useful lives or the underlying lease term. Repairs and maintenance expenditures which do not extend the useful lives of related assets are expensed as incurred.

Income Taxes . The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in financial statements or tax returns. Deferred tax items are reflected at the enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Due to the uncertainty regarding the success of future operations, management has valued the deferred tax asset allowance at 100% of the related deferred tax assets.

Loss per Share. The Company’s basic loss per share has been calculated using the weighted average number of common shares outstanding during the period. The Company has 8,757,106 potentially dilutive common shares at March 31, 2014. However, such common stock equivalents were not included in the computation of diluted net loss per share as their inclusion would have been anti-dilutive.

Fair Value Measurement. ASC Topic 820-10 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). ASC Topic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability. The three levels of the fair value hierarchy under ASC Topic 820-10 are described below:

Level 1. Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access.

Level 2. Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

Level 3. Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 fair value elections are made on an instrument by instrument basis.

In accordance with the fair value accounting requirements, companies may choose to measure eligible financial instruments and certain other items at fair value. The Company has not elected the fair value option for any eligible financial instruments.
 
Recent Accounting Pronouncements

There were no recently issued accounting pronouncements that will have a material impact on the Company’s financial statements.

 
- 38 -
 

GROWBLOX SCIENCES, INC AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
September 30, 2014


NOTE 4 – CONVERTIBLE NOTES AND WARRANTS

Convertible Notes from Shareholders

The Company had debt outstanding to shareholders, which was issued between 2006 and 2013. The debt was not issued with warrants and some of the debt was not originally issued with a conversion feature. During fiscal years 2009 and 2010, the notes without conversion features were modified to contain a conversion feature, for which the Company recorded a loss on the modification. Convertible notes from shareholders issued during fiscal year 2010 contained a beneficial conversion feature, with the discount being amortized over the term of the note.
 
Convertible notes from shareholders accrued interest at a rate of 10 percent per annum. The note holders had the sole option of converting the principal and interest represented by these notes into our common stock at a strike price equal to a $0.01. The note holders were only be allowed to convert shares or portion thereof to the extent that, at the time of the conversion, the conversion will not result in the note holders beneficially owning more than 9.9% of the issued and outstanding common shares of the Company.

Additional, between December 2009 and February 2013, the Company entered into several Convertible Note Agreements ("Notes") for a total of $1,033,744. The Company received aggregate proceeds of $884,700 reflecting a 15% original issue discount to the Note holders and a nominal rate of 16.63%.

The Notes were due after one year. The note holders could have converted any portion of the Notes that are outstanding, whether such portion represents principal or interest, into shares of common stock of the Company at a price equal to $0.10. The Notes includes an anti-dilution adjustment that may not be adjusted below $0.01.

Simultaneously with the issuance of these Notes, the Company issued to the Note holders a 5-year warrant (the "Warrants") to purchase 12,364,766 shares of common stock of the Company. The Warrants were exercisable at a price equal to $0.15. The Warrants included an anti-dilution adjustment that may not be adjusted below $0.01.

The note holders were only be allowed to convert shares or exercise warrants or portion thereof to the extent that, at the time of the conversion or exercise, the conversion or exercise will not result in the note holder beneficially owning more than 9.9% of the issued and outstanding common shares of the Company.

Simultaneously with the issuance of this Note, the Company issued to each Note holder a 5-year warrant (the "Warrant") to purchase 504,203 shares of common stock of the Company. The Warrant is exercisable at a price equal to $0.50. The Warrants include an anti-dilution adjustment that may not be adjusted below $0.01.
 
The note holder will only be allowed to convert shares or exercise warrants or portion thereof to the extent that, at the time of the conversion or exercise, the conversion or exercise will not result in the note holder beneficially owning more than 9.9% of the issued and outstanding common shares of the Company.
 
In March 2014, the note holders’ agreed to modify the terms of all the notes and warrants. The notes are now convertible at a fixed price of $0.26. The warrants have been cancelled and no longer have any value. A loss of $559,048 for the extinguishment of debt has been recorded on the State of Operations as of March 31, 2014. As of September 30, 2014, all of the notes have been converted to common stock.



   
For the six months ended September 30, 2014
   
For the year ended March 31, 2014
 
   
Convertible Notes
   
Accrued Interest
   
Convertible Notes
   
Accrued Interest
 
Balance, beginning of period
  $ 1,262,441     $ 252,304     $ 442,750     $ 208,088  
Conversion to common stock
    (1,262,411 )     (252,304 )     (114,057 )     -  
Reclassified from Convertible Notes at Fair Value     -       -       933,748       -  
Accrued interest
    -       -       -       44,216  
Balance, end of period
  $ -     $ -     $ 1,262,441     $ 252,304  

 
- 39 -
 
GROWBLOX SCIENCES, INC AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
September 30, 2014


NOTE 4 – CONVERTIBLE NOTES AND WARRANTS, CONTINUED

             
   
Warrants Outstanding
 
   
Number of Shares
   
Exercise Price
 
Outstanding at March 31, 2013
    12,364,766     $ 0.15-$0.10  
Warrants issued
    2,960,000     $ 1.00-$2.00  
Warrants exercised
    -          
Warrants expired/cancelled
    (12,364,766 )        
Outstanding at March 31, 2014
    2,960,000     $ 1.00-$2.00  
Warrants issued
    12,038,446     $ 0.55-$2.00  
Warrants exercised
    -          
Warrants expired/cancelled
               
Outstanding at September 30, 2014
    14,995,446     $ 0.55-$2.00  


NOTE 5 – STOCKHOLDERS’ EQUITY (CAPITAL DEFICIENCY)

From April 2014 to September 2014, the Company converted a total of $1,262,411 of notes payable from certain Note Holders into common stock of the Company. The Company issued 5,757,015 shares of our common stock to satisfy the principal and interest balances of the notes payable.

As of September 30, 2014, the Company sold 4,520,000 units through a private placement. Each unit consists of one share of common stock, one A warrant, expiring in three years, with an exercise price of $1.00 and one B warrant, expiring in five years, with an exercise price of $2.00. The price was $0.50 per unit.

On March 13, 2014 the Company entered into a definitive agreement (the “Agreement”) with Mr. Craig Ellins for the acquisition of assets. In accordance with the Agreement, Mr. Ellins was issued an additional four million shares upon the completion of a minimum of $1,000,000 in proceeds to the Company from fund raising on May 1, 2014. The shares were issued pursuant to the exemption from registration set forth in Section 4(2) of the Securities Act of 1933.

On June 27, 2014, the Company issued 8,950,000 shares of common stock pursuant to the employment contracts of our three executive officers valued at $1.24 per share. Fifty thousand of the shares were issued directly to one of the officers. The remaining shares will be held by the Company until such time as certain milestones are reached and vesting periods have run. The issuance was exempt from the registration requirements of Section 5 of the Securities Act of 1933 pursuant to Section 4(2) of the Act because there was no public offering in connection with the issuance of the shares.

NOTE 6 – SUBSEQUENT EVENTS
 
 
On October 6, 2014 the company issued 225,000 shares of restricted common stock to four consultants valued at $157,000.
 
 
On October 7, 2014, the company issued 8,000 shares of restricted common stock to two scientific advisory board members for a total of $5,600.
 
- 40 -
 
LJ SULLIVAN CERTIFIED PUBLIC ACCOUNTANT, LLC
701 Brickell Avenue, Suite 1550
Miami, Florida 33131
 
 
 
 
REPORT OF IINDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 
To the Board of Directors and Stockholders of GrowBlox Sciences, Inc.
 
 
I have audited the accompanying balance sheets of GrowBlox Sciences, Inc. as of March 31, 2014 and 2013, and the related statements of operations, stockholders’ equity, and cash flows for the years then ended. GrowBlox Sciences, Inc.’s management is responsible for these financial statements. My responsibility is to express an opinion on these financial statements based on my audit.
 
 
I conducted my audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor was I engaged to perform, an audit of its internal control over financial reporting. My audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion the effectiveness of the company’s internal control over financial reporting. Accordingly, I express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.
 
 
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of GrowBlox Sciences, Inc. as of March 31, 2014 and 2013, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
 
 
The accompanying financial statements have been prepared assuming the company will continue as a going concern. As discussed in Note 2 of the accompanying financial statements, the company has incurred losses, has not generated any revenue, and has negative operating cash flows since the inception of exploration activities. These factors and the need for additional financing in order for the company to meet its business plan, raise substantial doubt about its ability to continue as a going concern. Management’s plan to continue as a going concern is also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 
/s/ L J Sullivan Certified Public Accountant, LLC

 
L J Sullivan Certified Public Accountant, LLC
Miami, Florida
June 27, 2014
 
 
 
- 41 -
 
 
 
 
GROWBLOX SCIENCES, INC.
(A Development Stage Company)
Condensed Balance Sheets
 
Assets
           
   
March 31,
   
March 31,
 
   
2014
   
2013
 
             
Current assets:
           
Cash
  $ 339,327     $ 2,427  
Subscription Receivable
    150,000       -  
Debt issuance costs
    -       3,963  
Prepaid expenses and other current assets
    -       100  
                 
Total current assets
    489,327       6,490  
                 
                 
Property and Equipment, net
    44,922       128  
Intangibles, net
    3,735       -  
                 
Total assets
  $ 537,984     $ 6,618  
                 
Liabilities and Stockholders’ Equity (Deficiency)
               
                 
Current liabilities:
               
Accounts payable
  $ 19,762     $ 11,886  
Subscriptions payable
    10,000       -  
Accrued interest
    252,304       208,088  
Other accrued expenses
    1,847       45,751  
Notes from shareholders
    5,000       -  
Convertible notes from shareholders
    1,262,441       442,750  
Convertible notes from shareholders, at fair value
    -       227,521  
Derivative liability, at fair value
    -       260,311  
                 
Total current liabilities
    1,551,354       1,196,307  
                 
Commitments and contingencies
               
                 
Stockholders’ equity (deficiency):
               
Common stock, $0.0001 par value, 250,000,000 shares authorized 7,268,948 and 850,110 shares issued and outstanding at March 31, 3014 and March 31, 2013
    727       85  
Additional paid-in capital
    5,198,659       4,367,028  
Deficit accumulated related to abandoned activities
    (1,676,223 )     (1,676,223 )
Deficit accumulated during development stage
    (4,536,533 )     (3,880,579 )
                 
Total stockholders’ equity (deficiency)
    (1,013,370 )     (1,189,689 )
                 
Total liabilities and stockholders’ equity (deficiency)
  $ 537,984     $ 6,618  
 
 
 
The accompanying notes are an integral part of the financial statements
 
 
- 42 -
 
GROWBLOX SCIENCES, INC.
(A Development Stage Company)
Statements of Operations
For the years ended March 31, 2014 and 2013,
 
 
             
             
  2014     2013  
Net revenue
  $ -     $ -  
                 
Cost of revenue
    -       -  
                 
Gross profit (loss)
    -       -  
                 
                 
Loss on oil and gas properties
    -       36,000  
Investor relations
    -       -  
General and administrative expenses
    187,760       75,718  
                 
Loss from continuing operations
    (187,760 )     (111,718 )
                 
Other income/(expense)
               
Change in fair value of convertible notes
    65,235       101,701  
Change in fair value of warrants
    78,385       97,575  
Loss on extinguishment of debt
    (559,048 )     -  
Loss on loan modification
    -       -  
Interest expense
    (52,767 )     (51,408 )
                 
Total other income/(expenses)
    (468,195 )     147,868  
                 
Net income/(loss)
  $ (655,955 )   $ 36,150  
                 
Weighted average common shares outstanding – basic and diluted
    940,723       966,858  
                 
Net loss per share - basic and diluted
  $ (0.70 )   $ 0.04  
 
 
 
 
The accompanying notes are an integral part of the financial statements.

 
 
- 43 -
 

 
GROWBLOX SCIENCES, INC.
(A Development Stage Company)
Statements of Stockholders’ Equity (Deficiency)
For the years ended March 31, 2014 and 2013,
and the Period from March 1, 2008 (Inception) to March 31, 2014
 
 
                     
Deficit
   
Deficit
       
                     
Accumulated
   
Accumulated
       
               
Additional
   
Related to
   
During
       
   
Common stock
   
Paid-in
   
Abandoned
   
Exploration
       
   
Shares
   
Amount
   
Capital
   
Activities
   
Stage
   
Total
 
Balance, March 1, 2008
    88,682     $ 9     $ 1,469,728     $ (1,676,223 )   $ -     $ (206,486 )
                                                 
Net loss
    -       -       -       -       (9,845 )     (9,845 )
                                                 
Balance, March 31, 2008
    88,682     $ 9     $ 1,469,728     $ (1,676,223 )     (9,845 )   $ (216,331 )
                                                 
Issuance of stock as compensation, in March 2009
    1,033       -       516       -       -       516  
                                                 
Loss on loan modification
    -       -       202,500       -       -       202,500  
                                                 
Net loss
    -       -       -       -       (341,967 )     (341,967 )
                                                 
Balance, March 31, 2009
    89,714     $ 9     $ 1,672,744     $ (1,676,223 )   $ (351,812 )   $ (355,282 )
                                                 
Issuance of stock for debt conversions
    216,225       22       21,600       -       -       21,622  
                                                 
Compensation expense – employment contracts
    387,300       38       1,031,002       -       -       1,031,040  
                                                 
Compensation expense – stock option
    -       -       984,600       -       -       984,600  
                                                 
Compensation expense – consulting
    8,014       1       89,256       -       -       89,257  
                                                 
Beneficial conversion features
    -       -       133,000       -       -       133,000  
                                                 
Loss on loan modification
    -       -       258,441       -       -       258,441  
                                                 
Net loss
    -       -       -       -       (2,964,861 )     (2,964,861 )
                                                 
Balance, March 31, 2010
    701,253     $ 70     $ 4,190,643     $ (1,676,223 )   $ (3,316,673 )   $ (802,183 )
                                                 
                                                 
Compensation expense – consulting
    6,000       1       62,399       -       -       62,400  
                                                 
Legal Retainer
    2,857       -       10,000       -       -       10,000  
                                                 
Net loss
    -       -       -       -       (585,293 )     (585,293 )
                                                 
Balance, March 31, 2011
    710,110     $ 710     $ 4,263,042     $ (1,676,223 )   $ (3,901,966 )   $ (1,315,076 )
                                     
Compensation – employment contracts
    2,402,682       2,40       (2,40 )     -       -       -  
                                                 
Issuance of stock for debt conversions
    140,000       14       103,986       -       -       104,000  
                                                 
Net loss
    -       -       -       -       (14,763 )     (14,763 )
                                                 
Balance, March 31, 2012
    32,527,930     $ 3,253     $ 4,363,860     $ (1,676,223 )   $ (3,916,729 )   $ (1,225,839 )
                                                 
Compensation – employment contracts
    (2,402,682 )     (240 )     240       -       -       -  
                                                 
Sale of stock subscription
            1       11,499       -       -       12,500  
                                                 
Return of stock sold
            (1 )     (11,499 )     -       -       (12,500 )
                                                 
Rounding
            1               -       -       -  
                                                 
Net income
    -       -       -       -       36,150       36,150  
                                                 
Balance, March 31, 2013
    850,110     $ 85     $ 4,367,028     $ (1,676,223 )   $ (3,880,579 )   $ (1,189,689 )
Fractional share from stock split
    157       -       -       -       -       -  
                                                 
Asset acquisition
    4,500,000       450       33,317       -       -       33,467  
                                                 
Sale of stock subscription
    1,480,000       148       739,852       -       -       740,000  
                                                 
Issuance of stock for debt conversion
    438,681       44       114,013       -       -       114,057  
                                                 
Stock issuance costs
    -       -       (55,250 )     -       -       (55,250 )
                                                 
Rounding                     (1 )             1          
                                                 
Net loss
    -       -       -       -       (655,955 )     (655,955 )
                                                 
Balance, March 31, 2014
    7,268,948     $ 727     $ 5,615,193     $ (1,676,223 )   $ (4,536,533 )   $ (1,013,370 )
 
 
The accompanying notes are an integral part of the financial statements.
 
 
 
- 44 -
 
 
GROWBLOX SCIENCES, INC.
(A Development Stage Company)
Statements of Cash Flows
For the years ended March 31, 2014 and 2013,
 
             
Cash flows from operating activities:
           
      2014       2013  
Net loss
  $ (655,955 )   $ 36,150  
                 
Adjustments to reconcile net loss to net cash used in
               
operating activities:
               
Depreciation expense
    128       300  
Amortization expense
    10       -  
Loss on oil and gas assets
    -       36,000  
Stock compensation
    -       -  
Loss on loan modification
    -       -  
Loss on extinguishment of debt
    559,048       -  
Change in fair value of convertible notes
    (65,235 )     (101,701 )
Change in fair value of warrants
    (78,385 )     (97,575 )
Non-cash interest
    8,552       7,317  
Changes in operating assets and liabilities:
               
Other assets
    -       350  
Accounts payable
    7,875       5,327  
Stock subscription payable
    10,000          
Accrued expenses
    312       76,385  
                 
Net cash used in operating activities
    (213,650 )     (37,447 )
                 
Cash flows from investing activities:
               
                 
Investment in oil and gas properties
    -       -  
Purchase of property and equipment
    (15,200 )     -  
                 
Net cash used in investing activities
    (15,200 )     -  
                 
Cash flows from financing activities:
               
Stock subscription receivable     (150,000 )     -  
Proceeds for sale of stock
    684,750       -  
Proceeds from issuance of debt to stockholders
    31,000       37,700  
                 
Net cash provided by financing activities
    565,750       37,700  
                 
Net increase (decrease) in cash
    336,900       253  
                 
Cash, beginning of year
  $ 2,427     $ 2,174  
                 
Cash, end of year
  $ 339,327     $ 2,427  
                 
Supplemental disclosures of cash flow information:
               
Cash paid during the year for:
               
Interest
  $ -     $ -  
                 
Non-cash investing and financing activities:
               
Stock issued for intangible assets
  $ 33,467     $ -  
Stock issued for legal retainer included in other assets
  $ -     $ -  
Convertible debt issued for oil and gas lease agreements
  $ -     $ -  
Stock issued to settle convertible debt
  $ 114,057     $ -  
Stock issued to settle interest expense
  $ -     $ -  
 
The accompanying notes are an integral part of the financial statements.
 
 
- 45 -
 
GROWBLOX SCIENCES, INC.
Notes to Financial Statements
March 31, 2014 and 2013
 
 
NOTE 1 – ORGANIZATION AND PRINCIPLES OF CONSOLIDATION
 
Reporting Entity. GrowBlox Sciences, Inc. (“GrowBlox” or “the Company”) was incorporated on April 4, 2001 under the laws of the State of Delaware. The Company is authorized to issue 250,000,000 shares of common stock, par value $.0001. On March 18, 2014, we purchased assets from Craig Ellins, which included the revolutionary GrowBLOX™ technology. We plan to utilize this technology to commercially cultivate and produce medical grade cannabis for sale in the U.S. states and territories in which it is legal. We also plan to research the medical treatment potential of cannabis and develop treatments from those findings. On April 4, 2014, we officially changed our name to GrowBLOX™ Sciences, Inc. to reflect this new corporate direction. The Company’s office is located in Las Vegas, Nevada.
 
 
NOTE 2 – BASIS OF PRESENTATION
 
The Company’s financial statements have been prepared assuming the Company will continue as a going concern. The Company has experienced net losses since April 4, 2001, which losses have caused an accumulated deficit of approximately $6,100,000 at March 31, 2014 of which $4,500,000 has been accumulated during our current development activities. In addition, the Company has consumed cash in its operating activities of approximately $364,000 and $37,000 for the years ended March 31, 2014 and 2013, respectively. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management has been able, thus far, to finance the losses through a public offering, private placements and obtaining operating funds from stockholders. The Company is continuing to seek sources of financing. There are no assurances that the Company will be successful in achieving its goals. 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. The Company is currently acquiring and developing crude oil and natural gas leases. 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 cannot continue as a going concern.
 
 
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 
Development Stage Company . The Company is considered to be in the development stage.
 
 
Cash and Cash Equivalents. The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
 
 
Revenue Recognition . The Company will recognize revenue when the following conditions have been met:
 
1. Persuasive evidence of an arrangement exists,
2. Delivery has occurred, or services have been rendered,
3. The price is fixed or determinable, and
4. Collectability is reasonably assured.
The Company had no revenue during the period.
 
Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
 
 
 
- 46 -
 
 
GROWBLOX SCIENCES, INC.
Notes to Financial Statements
March 31, 2014 and 2013
 
 
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
 
 
Property and Equipment. Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets: 3-8 years for machinery and equipment, leasehold improvements are amortized over the shorter of the estimated useful lives or the underlying lease term. Repairs and maintenance expenditures which do not extend the useful lives of related assets are expensed as incurred.
 
 
Income Taxes . The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in financial statements or tax returns. Deferred tax items are reflected at the enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Due to the uncertainty regarding the success of future operations, management has valued the deferred tax asset allowance at 100% of the related deferred tax assets.
 
 
Loss per Share. The Company’s basic loss per share has been calculated using the weighted average number of common shares outstanding during the period. The Company has 8,757,106 potentially dilutive common shares at March 31, 2014. However, such common stock equivalents were not included in the computation of diluted net loss per share as their inclusion would have been anti-dilutive.
 
 
 
NOTE 4 – FAIR VALUE MEASUREMENTS
 
 
The Company holds certain financial liabilities that are measured at fair value on a recurring basis in accordance with ASC Topic 825-10-15. ASC Topic 820-10 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). ASC Topic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability. The three levels of the fair value hierarchy under ASC Topic 820-10 are described below:
 
 
Level 1. Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access.
 
Level 2. Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
 
Level 3. Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 fair value elections are made on an instrument-by-instrument basis. The Company uses Level 3 inputs to value convertible notes and detachable warrants accounted for as derivatives.
 
 
 
- 47 -
 
 
GROWBLOX SCIENCES, INC.
Notes to Financial Statements
March 31, 2014 and 2013
 
 
NOTE 4 – FAIR VALUE MEASUREMENTS, CONTINUED
 
 
The tables below detail the Company’s assets and liabilities measured at fair value.
 
 
   
Fair Value Measurements March 31, 2014
       
   
Level 1
   
Level 2
   
Level 3
   
Total
 
Convertible notes from stockholders, at fair value
  $ -     $ -     $ -     $ -  
Derivative liability
  $ -     $ -     $ -     $ -  
   
Fair Value Measurement March 31, 2013
         
   
Level 1
   
Level 2
   
Level 3
   
Total
 
Convertible notes from stockholders, at fair value
  $ -     $ -     $ 227,521     $ 227,521  
Derivative liability
  $ -     $ -     $ 260,311     $ 260,311  
 
The following table presents the changes in Level 3 instruments measured on a recurring basis for the year ended March 31, 2013:
   
Convertible Notes
   
Derivative Liability
   
Total
 
                   
Balance, March 31, 2012
  $ 308,255     $ 334,497     $ 308,255  
Realized and unrealized gains (losses);
                       
Included in other income (expense)
    (101,701 )     (97,575 )     (199,276 )
Purchases, issuances, and settlements
    20,967       23,389       (44,356 )
Balance, March 31, 2013
  $ 227,521     $ 260,311     $ 487,832  
 
The convertible notes and derivative liability in the preceding tables were measured at fair value, in accordance with ASC Topic 825-10-15, as one instrument and that fair value was allocated to each component. The Company made the fair value election due to this methodology providing a fairer representation of the economic substance of the transaction within the fair value hierarchy. Due to the lack of relevant and market reflective Level 1 and Level 2 inputs, the Company valued the instruments using Level 3 inputs, which require significant judgment and estimates on behalf of management in developing model assumptions. The factors considered in developing those assumptions included; the Company’s inability to attract investment at terms more favorable to the Company, the lack of success in developing oil properties thus far, the continuing reduction in the net assets of the Company and the Company’s history of default on currently outstanding debt. Based on management’s evaluation of the assumptions discussed above, the liabilities were initially recorded in an amount equal to the transaction price, which represented the fair value of the total liability at initial recognition. The model used by the Company is calibrated so that the model value at initial recognition equals the transaction price. On an ongoing basis the fair value model used in valuing the convertible notes and derivative liability utilizes the following inputs; exercise price per warrant, conversion price per share, contract term, volatility, current stock prices and risk free rates. The following assumptions were made in the model (1) risk free interest rate of 0.18% to 0.63%, (2) remaining contractual life of 1 to 4.87 years, (3) expected stock price volatility of 797% and (4) expected dividend yield of zero.
 
 
- 48 -
 
GROWBLOX SCIENCES, INC.
Notes to Financial Statements
March 31, 2014 and 2013
 
 
NOTE 4 – FAIR VALUE MEASUREMENTS, CONTINUED
 
In March 2014, the note holders’ agreed to modify the terms of the notes and warrants. The notes are now convertible at a fixed price of $0.26. The notes will no longer be carried at fair market value using Level 3 inputs now that the conversion price is a fixed amount. The warrants have been cancelled and no longer have any value. A loss of $559,048 for the extinguishment of debt has been recorded on the Statement of Operations as of March 31, 2014.
 
The following table presents the change due to the modified terms:
 
Balance at Fair Value, March 31, 2013
  $ 227,521     $ 260,311     $ 487,832  
Realized and unrealized gains (losses);
    (65,235 )     (78,385 )     (143,720 )
Included in other income (expense)
    756,719       (197,671 )     559,048  
Purchases, issuances, and settlements
    14,743       15,745       30,488  
Balance, March 31, 2014
  $ 933,748     $ -     $ 933,748  

The Company applied ASC 470-50-40/55 - Debtor’s Accounting for a Modification or Exchange of Debt Instrument and concluded that the Third Amendment Agreement constituted a debt extinguishment rather than debt modification because the change in the fair value of the embedded conversion features immediately before and after the modification exceeded 10% of the original loan balance. As a result, the Company recorded a loss on debt extinguishment of $559,048 during the year ended March 31, 2014, as summarized below:
 
Loss on Extinguishment:
       
Carrying value of pre-modification debt
 
$
487,832
 
         
Less: Estimated fair value of debt after modification
   
(933,748
)
Original issue discount
       
Fair value of assets given
   
(113,132
)
Loss on debt extinguishment
 
$
(559,048
)
 
 
NOTE 5 – DEFERRED INCOME TAXES
 
At March 31, 2014, the Company had net operating loss carryforwards for income tax purposes of approximately $4,413,000 available as offsets against future taxable income. The net operating loss carryforwards are expected to expire at various times from 2024 through 2032. Utilization of the Company’s net operating losses may be subject to substantial annual limitation if the Company experiences a 50% change in ownership, as provided by the Internal Revenue Code and similar state provisions. Such an ownership change would substantially increase the possibility of net operating losses expiring before complete utilization.
 
 
The tax effects of the primary temporary differences giving rise to the Company’s deferred tax assets and liabilities are as follows for the year ended March 31, 2014:
 
Deferred tax assets:
 
 
2014
   
2013
 
Net operating loss carryforward
  $ 1,674,000     $ 1,583,000  
Stock based compensation
    -       -  
Total deferred tax assets
    1,674,000       1,583,000  
Less valuation allowance
    (1,674,000 )     (1,583,000 )
Net deferred tax asset
  $ -     $ -  
 
 
 
Because of the Company’s lack of earnings history, the deferred tax assets have been fully offset by a valuation allowance. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during those periods that the temporary differences become deductible. The Company believes that the tax positions taken in its tax returns would be sustained upon examination by taxing authorities. During the year ended March 31, 2014, the decrease in the deferred tax asset valuation allowance amounted to approximately $91,000.
 
 
The provision for income taxes is different than would result from applying the U.S. statutory rate to profit before taxes for the reasons set forth in the following reconciliation:
   
2014
   
2013
 
Tax benefit computed at U.S. statutory rates
  $ (229,000 )   $ (205,000 )
                 
Increases (decreases) in taxes resulting from:
               
Non-deductible items
    145,000       22,000  
Change in valuation allowance
    91,000       198,000  
State taxes
    (7,000 )     (15,000 )
Total
  $ -     $ -  
 
 
 
As a result of the implementation of certain provisions of ASC 740, Income Taxes, the Company performed an analysis of its previous tax filings and determined that there were no positions taken that it considered uncertain. Therefore, there were no unrecognized tax benefits as of March 31, 2013 and 2012. The open tax years for each Federal taxes are March 31, 2011-2014.
 
 
- 49 -
 
GROWBLOX SCIENCES, INC.
Notes to Financial Statements
March 31, 2014
 
NOTE 6 – CONVERTIBLE NOTES AND WARRANTS
 
 
Convertible Notes from Shareholders
 
 
The Company has debt outstanding to shareholders, which was issued between 2006 and 2009. The debt was not issued with warrants and some of the debt was not originally issued with a conversion feature. During fiscal years 2009 and 2010, the notes without conversion features were modified to contain a conversion feature, for which the Company recorded a loss on the modification. Convertible notes from shareholders issued during fiscal year 2010 contained a beneficial conversion feature, with the discount being amortized over the term of the note, see table below.
 
   
For the year ended March 31, 2014
   
For the year ended March 31, 2013
 
   
Convertible Notes
   
Accrued Interest
   
Convertible Notes
   
Accrued Interest
 
Balance, beginning of period
  $ 442,750     $ 208,088     $ 446,750     $ 163,998  
Conversion to common stock
    (114,057 )     -       -       -  
Reclassified from Convertible Notes at Fair Value     933,748       -       -       -  
Accrued interest
    -       44,216       -       44,090  
Balance, end of period
  $ 1,262,441     $ 252,304     $ 442,750     $ 208,088  
 
 
Convertible notes from shareholders accrued interest at a rate of 10 percent per annum. The note holders had the sole option of converting the principal and interest represented by these notes into our common stock at a strike price equal to a $0.01. The note holders were only be allowed to convert shares or portion thereof to the extent that, at the time of the conversion, the conversion will not result in the note holders beneficially owning more than 9.9% of the issued and outstanding common shares of the Company.
 
In March 2014, the note holders agreed to modify the terms of the notes. The notes are now convertible at a fixed price of $0.26 and interest will no longer accrue on the remaining notes. The note holders were only be allowed to convert shares or portion thereof to the extent that, at the time of the conversion, the conversion will not result in the note holders beneficially owning more than 9.9% of the issued and outstanding common shares of the Company.
 
 
             
   
Warrants Outstanding
 
   
Number of Shares
   
Exercise Price
 
Outstanding at March 31, 2012
    11,921,206     $ 0.15-$0.10  
Warrants issued
    443,560     $ 0.15  
Warrants exercised
    -       -  
Warrants expired/cancelled
    -       -  
Outstanding at March 31, 2013
    12,364,766     $ 0.15-$0.10  
Warrants issued
    2,960,000     $ 1.00-$2.00  
Warrants exercised
    -          
Warrants expired/cancelled
    (12,364,766 )        
Outstanding at March 31, 2014
    2,960,000     $ 1.00-$2.00  
 

 
 
- 50 -
 
GROWBLOX SCIENCES, INC.
Notes to Financial Statements
March 31, 2014 and 2013
 
 
 
 
NOTE 7 – CAPITAL TRANSACTIONS
 
 
Sale of Common Stock
 
 
As of March 31, 2014, the Company sold 1,480,000 units through a private placement. Each unit consists of one share of common stock, one A warrant, expiring in three years, with an exercise price of $1.00 and one B warrant, expiring in five years, with an exercise price of $2.00. The price was $0.50 per unit.
 
 
Asset Purchase
 
 
On March 13, 2014, the Company, entered into a definitive agreement with Mr. Craig Ellins for the acquisition of assets The Assets include:
 
•
a provisional patent application
•
concepts associated with the Mr. Ellins or his associates
•
trademarks
•
business plans
•
investor presentations and histories
•
websites
•
trade secrets including without limitation trade secrets involving nutrient mixes
•
drawings and digital artwork
•
raw materials
•
production equipment and related assets including without limitation electrical equipment, plastic molds and internal parts
•
proof-of-concept equipment
•
URL’s
In exchange for the Assets, the Company agreed to issue 12,500,000 restricted shares of the Company’s common stock. Of the total number of shares to be issued, 4,500,000 were issued upon the signing of the Agreement. The remainder of the shares will be issued upon reaching certain milestones. The shares were issued pursuant to the exemption from registration set forth in Section 4(2) of the Securities Act of 1933.
 
 
Below are the assets purchased:
 
Equipment
  $ 29,722  
Intangibles (patent, trademarks, URL’s)
    3,735  
Total
  $ 33,457  
 
The assets were valued at their historical cost.
 
 
Employment Agreements
 
 
Mr. Alan Gaines, our former Chief Executive Officer and Chairman, had entered into an Employment Agreement with the Company for a one-year term beginning May 2, 2011. Mr. Gaines would have been compensated with 12,012,413 shares of restricted common stock, payable upon the completion of a Qualified Acquisition or Qualified Equity Raise. An expense of $960,993 would have been recorded as stock compensation at the time a Qualified Acquisition or Qualified Equity Raise is completed. Upon the resignation of Mr. David on April 18, 2012, the shares were canceled and no expense was recognized.
 
 
 
- 51 -
 
 
GROWBLOX SCIENCES, INC.
Notes to Financial Statements
March 31, 2014 and 2013
 
 
 
 
NOTE 7 – CAPITAL TRANSACTIONS ( CONTINUED)
 
 
Dr. Amiel David, our former Chief Operating Officer, has entered into an Employment Agreement with the Company for a one-year term beginning May 2, 2011. Dr. David would have been compensated with 12,013,413 shares of restricted common stock, payable upon the completion of a Qualified Acquisition or Qualified Equity Raise. An expense of $961,073 would have been recorded as stock compensation at the time a Qualified Acquisition or Qualified Equity Raise is completed. Upon the resignation of Mr. David on April 18, 2012, the shares were canceled and no expense was recognized.
 
 
Note Conversions
 
 
During the year ended March 31, 2014, the Company converted a total of $114,013 of notes payable from certain Note Holders into common stock of the Company. The Company issued 438,681 shares of our common stock to satisfy the principal balances of the notes payable.
 
 
NOTE 8 – STOCK OPTION PLAN
 
 
On February 6, 2008, the Board of Directors adopted the GrowBlox Sciences, Inc. 2007 Amended Stock Option Plan (“2007 Plan”). Under the 2007 Plan, 8,000,000 shares of the Company’s restricted common stock may be issuable upon the exercise of options issued to employees, advisors and consultants.
 
 
At March 31, 2014 the Company has no stock options outstanding.
 
NOTE 9 – SUBSEQUENT EVENT
 
From April 2014 to June 2014, the Company converted a total of $1,015,459 of notes payable from certain Note Holders into common stock of the Company. The Company issued 3,905,612 shares of our common stock to satisfy the principal balances of the notes payable.
 
As of June 21, 2014, the Company sold 4,520,000 units through a private placement. Each unit consists of one share of common stock, one A warrant, expiring in three years, with an exercise price of $1.00 and one B warrant, expiring in five years, with an exercise price of $2.00. The price was $0.50 per unit.
 
 
On March 13, 2014 the Company entered into a definitive agreement (the “Agreement”) with Mr. Craig Ellins for the acquisition of assets. In accordance with the Agreement, Mr. Ellins was issued an additional four million shares upon the completion of a minimum of $1,000,000 in proceeds to the Company from fund raising on May 1, 2014. The shares were issued pursuant to the exemption from registration set forth in Section 4(2) of the Securities Act of 1933.
 
 
Subsequent to the fiscal year ended March 31, 2014, the Company issued 8,950,000 shares of common stock pursuant to the employment contracts of our three executive officers. Fifty thousand of the shares were paid directly to one of the officers. The remaining shares will be held by the Company until such time as certain milestones are reached and vesting periods have run. The issuance was exempt from the registration requirements of Section 5 of the Securities Act of 1933 pursuant to Section 4(2) of the Act because there was no public offering in connection with the issuance of the shares.
 
 
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Until ______, all dealers that effect transactions in these securities whether or not participating in this offering may be required to deliver a prospectus. This is in addition to the dealer's obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

 
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
 
The following table sets forth the expenses expected to be incurred in connection with the issuance and distribution of common stock registered hereby, all of which expenses, except for the Securities and Exchange Commission registration fee, are estimated.
 
Securities and Exchange Commission registration fee
  $ 4,284.40  
Miscellaneous expenses
    500.00  
Legal
    10,000.00  
Accounting fees and expenses
    5,000.00  
Total
  $ 19,784.40  
 
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
 
During the three years preceding the filing of this registration statement, Registrant has not sold securities without registration under the Securities Act of 1933, except as described below.
 
During the year ended March 31, 2012, the Company converted a total of $104,000 of notes payable from certain note Holders into common stock of the Company. The Company issued 1,400,000 shares of our common stock to satisfy the principal balances of the notes payable. The shares were issued pursuant to the exemption from registration set forth in Section 4(2) of the Securities Act of 1933.
 
On March 13, 2014, the Company, entered into a definitive agreement with Mr. Craig Ellins for the acquisition of certain assets. In exchange for the assets, the Company has issued 12,500,000 restricted shares of the Company’s common stock. The shares were issued pursuant to the exemption from registration set forth in Section 4(2) of the Securities Act of 1933.
 
Beginning in March of 2014 and continuing for approximately 60 days, the Company conducted a private offering of units. Each unit consisted of one share of common stock, one A warrant, expiring in three years, with an exercise price of $1.00 and one B warrant, expiring in five years, with an exercise price of $2.00. The price was $0.50 per unit. A total of 6,000,000 units were sold for total consideration of $3,000,000. The offering was exempt from the registration requirements of Section 5 of the Securities Act of 1933 pursuant to Rule 506(b) of Regulation D.
 
On or about March 25, 2014, the Registrant issued at total of 438,681 shares of common stock (the “Shares”) to a total of five persons. The Shares were issued in exchange for the cancellation of debt in the total amount of $114,017.08. The issuance was exempt from the registration requirements of Section 5 of the Securities Act of 1933 pursuant to Section 4(2) of the same Act since the issuance of the Shares did not involve any public offering.
 
Beginning in May of 2014 and continuing for approximately 20 days, the Company conducted a private offering of units. Each unit consisted of one share of common stock, one A warrant, expiring in three years, with an exercise price of $1.00 and one B warrant, expiring in five years, with an exercise price of $2.00. The price was $0.50 per unit. A total of 3,000,000 units were sold for total consideration of $1,500,000. The offering was exempt from the registration requirements of Section 5 of the Securities Act of 1933 pursuant to Rule 506(b) of Regulation D.
 
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On or about May 5, 2014, the Registrant issued at total of 1,755,612 shares of common stock to a total of three entities. The shares were issued in exchange for the cancellation of debt in the total amount of $459,970. The issuance was exempt from the registration requirements of Section 5 of the Securities Act of 1933 pursuant to Section 4(2) of the same Act since the issuance of the Shares did not involve any public offering.
 
On or about June 5, 2014, The Registrant has issued 1,500,000 shares of common stock to two entities. The shares were issued in exchange for the cancellation of debt in the amount of $390,000.00. The issuance was exempt from the registration requirements of Section 5 of the Securities Act of 1933 pursuant to Section 4(2) of the same Act since the issuance of the Shares did not involve any public offering.
 
On June 10, 2014, the Company, entered into an employment agreement and issued 50,000 restricted shares of the Company’s common stock as a signing bonus to the new employee. The shares were issued pursuant to the exemption from registration set forth in Section 4(2) of the Securities Act of 1933.
 
On June 27, 2014, the Company issued an aggregate of 8,900,000 restricted common shares to three employees in connection their employment arrangements with the Company. None of the shares are vested at this time. The shares were issued pursuant to the exemption from registration set forth in Section 4(2) of the Securities Act of 1933.
 
On July 15, 2014, the Company issued an aggregate of 1,200,505 shares of common stock to two entities. The shares were issued in exchange for the cancellation of debt in the amount of $312,131. The issuance was exempt from the registration requirements of Section 5 of the Securities Act of 1933 pursuant to Section 4(2) of the same Act since the issuance of the Shares did not involve any public offering.
 
On July 17, 2014, the Company issued 38,500 shares of common stock to a shareholder of the Company. The shares were issued at $0.50 per share. The issuance was exempt from the registration requirements of Section 5 of the Securities Act of 1933 pursuant to Section 4(2) of the same Act since the issuance of the Shares did not involve any public offering.
 
On September 4, 2014, the Company issued 500,000 shares of common stock to an entity. The shares were issued in exchange for the cancellation of debt in the amount of $130,000. The issuance was exempt from the registration requirements of Section 5 of the Securities Act of 1933 pursuant to Section 4(2) of the same Act since the issuance of the Shares did not involve any public offering.
 
On September 25, 2014, the Company issued 150,989 shares of common stock to an entity. The shares were issued in exchange for the cancellation of debt in the amount of $39,257. The issuance was exempt from the registration requirements of Section 5 of the Securities Act of 1933 pursuant to Section 4(2) of the same Act since the issuance of the Shares did not involve any public offering.
 
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
(a) Exhibits
 
The following exhibits are filed with this registration statement:
 
Exhibit No.
 
Description
3.1
 
Certifiate of Incorporation (1)
3.2   Amendment to Certificate of Incorporation (4)
3.3
 
Bylaws (1)
4.1
 
Specimen Common Stock Certificate of Registrant (3)
5.1
 
Opinion of Gary R. Henrie, Attorney at Law regarding the legality of the common stock being registered
10.1
 
Employment Agreement with Mr. Ellins (2)
10.2
 
Employment Agreement with Mr. Weldon (2)
10.3
 
Employment Agreement with Ms. Small-Howard (2)
10.4
 
Operating Agreement of GB Sciences Nevada LLC (4)
10.5   Asset Assignment, Acquisition and Professional Association Agreement with Craig Ellins(5)
10.6   2014 Equity Incentive Plan
21.1
 
List of Subsidiaries (2)
23.1
 
Consent of L J Sullivan Certified Public Accountant, LLC
23.2
 
Consent of Gary R. Henrie (included in Exhibit 5.1)
23.3
 
Powers of attorney (included in signature page)
99.1
 
NASDAQ Rule 4200(a)(15) regarding Director Independence (2)
101   Interactive Data File (4)
 
(1) Previously filed as an exhibit to Form SB-2 on February 12, 2002.
(2) Previously filed as an exhibit to Form 10-K on June 27, 2014.
(3) Previously filed as an exhibit to Form S-1 on September 26, 2014.
(4) Previously filed as an exhibit to Form S-1/A on December 8, 2014.
(5) Previously filed as an exhibit to Form 8-K/A on March 19, 2014.
 
(b) Financial Statement Schedules
 
See the Index to Financial Statements included on page 33 for a list of the financial statements included in this prospectus.
 
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ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
 
Our officers and directors are indemnified as provided by the Delaware Corporation Law and our bylaws. Under the Delaware Corporation Law, director immunity from liability to a company or its shareholders for monetary liabilities applies automatically unless it is specifically limited by a company's articles of incorporation that is not the case with our articles of incorporation. Excepted from that immunity are:
 
(1)
a willful failure to deal fairly with the company or its shareholders in connection with a matter in which the director has a material conflict of interest;
(2)
a violation of criminal law (unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful);
(3)
a transaction from which the director derived an improper personal profit; and
(4)
willful misconduct.
 
Our bylaws provide that we will indemnify our directors and officers to the fullest extent not prohibited by Delaware law; provided, however, that we may modify the extent of such indemnification by individual contracts with our directors and officers; and, provided, further, that we shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless:
 
(1)
such indemnification is expressly required to be made by law;
(2)
the proceeding was authorized by our Board of Directors;
(3)
such indemnification is provided by us, in our sole discretion, pursuant to the powers vested us under Delaware law; or
(4)
such indemnification is required to be made pursuant to the bylaws.
 
Our bylaws provide that we will advance all expenses incurred to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was our director or officer, or is or was serving at our request as a director or executive officer of another company, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request. This advanced of expenses is to be made upon receipt of an undertaking by or on behalf of such person to repay said amounts should it be ultimately determined that the person was not entitled to be indemnified under our bylaws or otherwise.
 
Our bylaws also provide that no advance shall be made by us to any officer in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made: (a) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to the proceeding; or (b) if such quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, that the facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to our best interests.
 
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ITEM 28. UNDERTAKINGS
 
The undersigned registrant hereby undertakes:
 
1.
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
 
(a)
To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(b)
To reflect in the prospectus any facts or events arising after the effective date of this registration statement, or most recent post-effective amendment, which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(c)
To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in the registration statement.
 
2.
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
 
3.
To remove from registration by means of a post-effective amendment any of the securities being registered hereby, which remain unsold at the termination of the offering.
 
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the provisions above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933, and is, therefore, unenforceable.
 
In the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one of our directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act of 1933, and we will be governed by the final adjudication of such issue.
 
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SIGNATURES
 
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Las Vegas, State of Nevada, on December 22, 2014.
 
   
GROWBLOX SCIENCES, INC.
   
 
By:
/s/Craig Ellins
   
   
Craig Ellins
   
   
Chief Executive Officer
   
         
POWER OF ATTORNEY
 
Each person whose signature appears below hereby constitutes and appoints Craig Ellins his true and lawful attorney-in-fact and agent with full power of substitution and re-substitution, for him or her and in his or her name, place, and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this Registration Statement and (2) Registration Statements, and any and all amendments thereto (including post-effective amendments), relating to the offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.
 
Signature
 
Title
 
Date
/s/Craig Ellins
Craig Ellins
 
CEO and Chairman of the Board
 
12-22-2014
         
         
         
/s/ Cathryn J. Kennedy
Cathryn J. Kennedy
 
CFO, Principal Accounting
Officer
 
12-22-2014
         
/s/ Andrea Small-Howard
Andrea Small-Howard
 
Director
 
12-22-2014

 
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Gary R. Henrie
Attorney at Law
Licensed and the States of Utah and Nevada

486 W. 1360 N.                                                                                                                                                                                                                                                                                                                                                                                                                                           Telephone:  801-310-1419
American Fork, UT  84003                                                                                                                                                                                                                                                                                                                                                                                                                 e-mail:   grhlaw@hotmail.com

December 22, 2014

Growblox Sciences, Inc.
7251 West Lake Mead Blvd, Suite 300
Las Vegas, NV 89128

Re:     Growblox Sciences, Inc., Registration Statement on Form S-1

Ladies and Gentlemen:

I have acted as securities counsel for Growblox Sciences, Inc., a Delaware corporation (the "Company"), for the purpose of issuing this opinion letter in connection with the registration statement on Form S-1 (the "Registration Statement") to be filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended.  The Registration Statement relates to the offering of 10,000,000 shares of the Company’s common stock by selling stockholders and the registration of 23,000,000 common shares that underlie warrants.

In rendering the opinion set forth below, I have reviewed: (a) the Registration Statement; (b) the Company's Articles of Incorporation; (c) the Company's Bylaws; (d) a certificate signed by the President of the Company; and (e) such statutes, records and other documents as I have deemed relevant.  In my examination, I have assumed the genuineness of all signatures, the authenticity of all documents submitted to me as originals, and conformity with the originals of all documents submitted to me as copies thereof and the truthfulness of statements set forth in such documents.  In addition, I have made such other examinations of law and fact, as I have deemed relevant in order to form a basis for the opinions hereinafter expressed.

Based upon the foregoing, I am of the opinion that the 10,000,000 shares of common stock to be sold by the selling shareholders are legally issued, fully paid and non-assessable and will remain legally issued, fully paid and non-assessable in the hands of any subsequent purchaser.  I am further of the opinion that the 23,000,000 shares issued upon exercise of warrants following proper payment therefore and upon resolution by the board of directors directing the issuance thereof will be legally issued, fully paid and non-assessable.  This opinion is based on Delaware general corporate law, all applicable Delaware statutory provisions and reported judicial decisions interpreting these laws.

Very truly yours,

/s/ Gary R. Henrie
_______________________________________
Gary R. Henrie, Esq.
 
 
 
 

Gary R. Henrie
Attorney at Law
Licensed and the States of Utah and Nevada

486 W. 1360 N.                                                                                                                                                                                                                                                                                                                                                                                                                                        Telephone:  801-310-1419
American Fork, UT  84003                                                                                                                                                                                                                                                                                                                                                                                                               e-mail:   grhlaw@hotmail.com

I hereby consent to the use of my opinion in the body of the Registration Statement and as an Exhibit to the Registration Statement and to all references to myself under the caption Legal Matters in the Registration Statement.

Very truly yours,


/s/ Gary R. Henrie
_____________________________________
Gary R. Henrie, Esq.




 
 
 


GROWBLOX SCIENCES, INC.
 
2014 EQUITY INCENTIVE PLAN
 
Adopted November 3, 2014
 
1.   Purposes of the Plan
 
.  The purposes of the Growblox Sciences, Inc. 2014 Equity Incentive Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees, Directors, and Consultants, and to promote the success of the Company’s business.  Options granted under the Plan may be Incentive Stock Options or Non-Qualified Stock Options, as determined by the Administrator at the time of grant.  Stock Purchase Rights may also be granted under the Plan.
 
2.   Definitions
 
.  As used herein, the following definitions shall apply:
 
(a)   “ Administrator ” means the Board or the Committee responsible for conducting the general administration of the Plan, as applicable, in accordance with Section 4 hereof.
 
(b)   “ Applicable Laws ” means the requirements relating to the administration of stock option plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted, and the applicable laws of any foreign country or jurisdiction where Options or Stock Purchase Rights are granted under the Plan.
 
(c)   “ Board ” means the Board of Directors of the Company.
 
(d)   “ Change in Control ” shall mean and include each of the following:
 
(i)   a dissolution or liquidation of the Company;
 
(ii)   a merger or consolidation in which the Company is not the surviving corporation (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a different jurisdiction, or other transaction in which there is no substantial change in the stockholders of the Company or their relative stock holdings and the Options and Stock Purchase Rights granted under this Plan are assumed, converted or replaced by the successor or acquiring corporation, which assumption, conversion or replacement will be binding on all Holders);
 
(iii)   a merger in which the Company is the surviving corporation but after which the stockholders of the Company immediately prior to such merger (other than any stockholder which merges with the Company in such merger, or which owns or controls another corporation which merges with the Company in such merger) cease to own at least a majority of the combined voting power of the surviving corporation’s outstanding voting securities immediately after the transaction; or
 
(iv)   the sale of all or substantially all of the assets of the Company.
 
The Administrator shall have full and final authority, which shall be exercised in its sole discretion, to determine conclusively whether a Change in Control has occurred pursuant to the above definition, and the date of the occurrence of such Change in Control and any incidental matters relating thereto.
 
 
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(e)   “ Code ” means the Internal Revenue Code of 1986, as amended, or any successor statute or statutes thereto.  Reference to any particular Code section shall include any successor section.
 
(f)   “ Committee ” means a committee appointed by the Board in accordance with Section 4 hereof.
 
(g)   “ Common Stock ” means the common stock of the Company.
 
(h)   “ Company ” means Growblox Sciences, Inc. , a Delaware corporation.
 
(i)   “ Consultant ” means any consultant or adviser if: (i) the consultant or adviser renders bona fide services to the Company or any Parent or Subsidiary of the Company; (ii) the services rendered by the consultant or adviser are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities; and (iii) the consultant or adviser is a natural person.
 
(j)   “ Director ” means a member of the Board.
 
(k)   “ Disability ” means total and permanent disability within the meaning of Section 22(e)(3) of the Code.
 
(l)   “ Employee ” means any person, including an Officer or Director, who is an employee (as defined in accordance with Section 3401(c) of the Code) of the Company or any Parent or Subsidiary of the Company.  A Service Provider shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor.  For purposes of Incentive Stock Options, no such leave may exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute or contract.  Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient, by itself, to constitute “employment” by the Company.
 
(m)   “ Equity Restructuring ” shall mean a non-reciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off, rights offering, or recapitalization through a large, nonrecurring cash dividend, that affects the shares of Common Stock (or other securities of the Company) or the share price of Common Stock (or other securities) and causes a change in the per share value of the Common Stock underlying outstanding awards granted under the Plan.
 
(n)   “ Exchange Act ” means the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto.  Reference to any particular Exchange Act section shall include any successor section.
 
 
- 2 -
 
(o)   “ Fair Market Value ” means, as of any date, the value of a share of Common Stock determined as follows:
 
(i)   If the Common Stock is listed on any established stock exchange or a national market system, its Fair Market Value shall be the closing sales price for a share of such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for such date, or if no bids or sales were reported for such date, then the closing sales price (or the closing bid, if no sales were reported) on the trading date immediately prior to such date during which a bid or sale occurred, in each case, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
 
(ii)   If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked prices for a share of the Common Stock on such date, or if no closing bid and asked prices were reported for such date, the date immediately prior to such date during which closing bid and asked prices were quoted for such Common Stock, in each case, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or
 
(iii)   In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined by the Administrator.
 
(p)   “ Holder ” means a person who has been granted or awarded an Option or Stock Purchase Right or who holds Shares acquired pursuant to the exercise of an Option or Stock Purchase Right.
 
(q)   “ Incentive Stock Option ” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and which is designated as an Incentive Stock Option by the Administrator.
 
(r)   “ Independent Director ” means a Director who is not an Employee of the Company.
 
(s)   “ Non-Qualified Stock Option ” means an Option (or portion thereof) that is not designated as an Incentive Stock Option by the Administrator, or which is designated as an Incentive Stock Option by the Administrator but fails to qualify as an incentive stock option within the meaning of Section 422 of the Code.
 
(t)   “ Officer ” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
 
(u)   “ Option ” means a stock option granted pursuant to the Plan.
 
(v)   “ Option Agreement ” means a written agreement between the Company and a Holder evidencing the terms and conditions of an individual Option grant.  The Option Agreement is subject to the terms and conditions of the Plan.
 
 
- 3 -
 
(w)   “ Parent ” means any corporation (or other entity), whether now or hereafter existing (other than the Company), in an unbroken chain of corporations (or other entities) ending with the Company if each of the corporations (or other entities) other than the last corporation (or other entity) in the unbroken chain owns stock (or other equity interests) possessing more than fifty percent (50%) of the total combined voting power of all classes of stock (or other equity interests) in one of the other corporations (or other entities) in such chain.
 
(x)   “ Plan ” means the Growblox Sciences, Inc. 2014 Equity Incentive Plan .
 
(y)   “ Public Trading Date ” means the first date upon which Common Stock of the Company is listed (or approved for listing) upon notice of issuance on any securities exchange or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system.
 
(z)   “ Restricted Stock ” means Shares acquired pursuant to the exercise of an unvested Option in accordance with Section 10(h) below or pursuant to a Stock Purchase Right granted under Section 12 below.
 
(aa)   “ Restricted Stock Purchase Agreement ” means a written agreement between the Company and a Holder evidencing the terms and conditions of the Holder’s purchase of Restricted Stock pursuant to the exercise of an unvested Option in accordance with Section 10(h) below or a Stock Purchase Right granted under Section 12 below.
 
(bb)   “ Rule 16b-3 ” means that certain Rule 16b-3 under the Exchange Act, as such Rule may be amended from time to time.
 
(cc)   “ Section 16(b) ” means Section 16(b) of the Exchange Act, as such Section may be amended from time to time.
 
(dd)   “ Securities Act ” means the Securities Act of 1933, as amended, or any successor statute or statutes thereto.  Reference to any particular Securities Act section shall include any successor section.
 
(ee)   “ Service Provider ” means an Employee, Director, or Consultant.
 
(ff)   “ Share ” means a share of Common Stock, as adjusted in accordance with Section 13 below.
 
(gg)   “ Stock Purchase Right ” means a right to purchase Common Stock pursuant to Section 12 below.
 
(hh)   “ Subsidiary ” means any corporation (or other entity), whether now or hereafter existing (other than the Company), in an unbroken chain of corporations (or other entities) beginning with the Company if each of the corporations (or other entities) other than the last corporation (or other entity) in the unbroken chain owns stock possessing more than fifty percent (50%) of the total combined voting power of all classes of stock in one of the other corporations (or other entities) in such chain.
 
 
- 4 -
 
3.   Stock Subject to the Plan
 
.  Subject to the provisions of Section 13 hereof, the shares of stock subject to Options or Stock Purchase Rights shall be Common Stock.  Subject to the provisions of Section 13 hereof, the maximum aggregate number of Shares which may be issued upon exercise of such Options or Stock Purchase Rights is Three Million (3,000,000) Shares.  Shares issued upon exercise of Options or Stock Purchase Rights may be authorized but unissued, or reacquired Common Stock.  If an Option or Stock Purchase Right expires or becomes unexercisable without having been exercised in full, the unpurchased Shares which were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated).  Shares which are delivered by the Holder or withheld by the Company upon the exercise of an Option or Stock Purchase Right under the Plan, in payment of the exercise price thereof or tax withholding thereon, may again be optioned, granted, or awarded hereunder, subject to the limitations of this Section 3.  If Shares of Restricted Stock are repurchased by the Company at their original purchase price, such Shares shall become available for future grant under the Plan (unless the Plan has terminated).  Notwithstanding the provisions of this Section 3, no Shares may again be optioned, granted, or awarded if such action would cause an Incentive Stock Option to fail to qualify as an Incentive Stock Option under Code Section 422.
 
4.   Administration of the Plan .
 
(a)   Administrator .  Unless and until the Board delegates administration to a Committee as set forth below, the Plan shall be administered by the Board.  The Board may delegate administration of the Plan to a Committee or Committees of one (1) or more members of the Board, and the term “Committee” shall apply to any person or persons to whom such authority has been delegated.  If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in the Plan to the Board shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board.  Notwithstanding the foregoing, however, unless otherwise determined by the Board, from and after the Public Trading Date, a Committee of the Board shall administer the Plan and the Committee shall consist solely of two (2) or more Independent Directors each of whom is an “outside director,” within the meaning of Section 162(m) of the Code, a “non-employee director” within the meaning of Rule 16b-3, and qualifies as “independent” within the meaning of any applicable stock exchange listing requirements.  Members of the Committee shall also satisfy any other legal requirements applicable to membership on the Committee, including requirements under the Sarbanes-Oxley Act of 2002 and other Applicable Laws.  Within the scope of its authority, in the absence of Independent Directors or otherwise, the Board or the Committee may (i) delegate to a committee of one (1) or more members of the Board who are not Independent Directors the authority to grant awards under the Plan to eligible persons who are either (1) not then “covered employees,” within the meaning of Section 162(m) of the Code and are not expected to be “covered employees” at the time of recognition of income resulting from such award or (2) not persons with respect to whom the Company wishes to comply with Section 162(m) of the Code and/or (ii) delegate to a committee of one (1) or more members of the Board who are not “non-employee directors,” within the meaning of Rule 16b-3, the authority to grant awards under the Plan to eligible persons who are not then subject to Section 16 of the Exchange Act.  The Board may abolish the Committee at any time and revest in the Board the administration of the Plan.  Appointment of Committee members shall be effective upon acceptance of appointment. Committee members may resign at any time by delivering written notice to the Board.  Vacancies in the Committee may only be filled by the Board.
 
 
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(b)   Powers of the Administrator .  Subject to the provisions of the Plan and the specific duties delegated by the Board to such Committee, and subject to the approval of any relevant authorities, the Administrator shall have the authority in its sole discretion:
 
(i)   to determine the Fair Market Value;
 
(ii)   to select the Service Providers to whom Options and Stock Purchase Rights may from time to time be granted hereunder;
 
(iii)   to determine the number of Shares to be covered by each such award granted hereunder;
 
(iv)   to approve forms of agreement for use under the Plan;
 
(v)   to determine the terms and conditions of any Option or Stock Purchase Right granted hereunder (such terms and conditions include, but are not limited to, the exercise price, the time or times when Options or Stock Purchase Rights may vest or be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Option or Stock Purchase Right or the Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine);
 
(vi)   to determine whether to offer to buyout a previously granted Option as provided in Section 10(i) hereof and to determine the terms and conditions of such offer and buyout (including whether payment is to be made in cash or Shares);
 
(vii)   to prescribe, amend, and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of qualifying for preferred tax treatment under foreign tax laws;
 
(viii)   to allow Holders to satisfy withholding tax obligations by electing to have the Company withhold from the Shares to be issued upon exercise of an Option or Stock Purchase Right that number of Shares having a Fair Market Value equal to the minimum amount required to be withheld based on the statutory withholding rates for federal and state tax purposes that apply to supplemental taxable income.  The Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined.  All elections by Holders to have Shares withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable;
 
(ix)   to amend the Plan or any Option or Stock Purchase Right granted under the Plan as provided in Section 15 hereof; and
 
 
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(x)   to construe and interpret the terms of the Plan and awards granted pursuant to the Plan and to exercise such powers and perform such acts as the Administrator deems necessary or desirable to promote the best interests of the Company which are not in conflict with the express written provisions of the Plan.
 
(c)   Effect of Administrator’s Decision .  All decisions, determinations, and interpretations of the Administrator shall be final and binding on all Holders.
 
5.   Eligibility
 
.  Non-Qualified Stock Options and Stock Purchase Rights may be granted to Service Providers. Incentive Stock Options may be granted only to Employees of the Company (or a “parent corporation” or “subsidiary corporation” thereof within the meaning of Code Sections 424(e) or 424(f), respectively).  If otherwise eligible, a Service Provider who has been granted an Option or Stock Purchase Right may be granted additional Options or Stock Purchase Rights.
 
6.   Limitations .
 
(a)   Designations .  Each Option shall be designated by the Administrator in the Option Agreement as either an Incentive Stock Option or a Non-Qualified Stock Option.  However, notwithstanding such designations, to the extent that the aggregate Fair Market Value of Shares subject to a Holder’s Incentive Stock Options and other incentive stock options granted by the Company (or a “parent corporation” or “subsidiary corporation” thereof within the meaning of Code Sections 424(e) or 424(f), respectively), which become exercisable for the first time during any calendar year (under all plans of the Company or any such parent or subsidiary) exceeds one hundred thousand dollars ($100,000), such excess Options or other options shall be treated as Non-Qualified Stock Options.  If the Code is amended to provide for a different limitation from that set forth in the preceding sentence, such different limitation shall be deemed incorporated herein effective as of the date and with respect to such Options as required or permitted by such amendment to the Code.
 
For purposes of this Section 6(a), Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares shall be determined as of the time of grant.
 
(b)   Employment or Consulting Relationship at Will .  Neither the Plan, any Option, nor any Stock Purchase Right shall confer upon a Holder any right with respect to continuing the Holder’s employment or consulting relationship with the Company, nor shall they interfere in any way with the Holder’s right or the Company’s right to terminate such employment or consulting relationship at any time, with or without cause.
 
(c)   Options or Stock Purchase Rights Granted .  No Service Provider shall be granted, in any calendar year, Options or Stock Purchase Rights to purchase more than two million five hundred thousand (2,500,000) Shares; provided , however , that the foregoing limitation shall not apply prior to the Public Trading Date, and, following the Public Trading Date, the foregoing limitation shall not apply until the earliest of: (i) the first material modification of the Plan (including any increase in the number of shares reserved for issuance under the Plan in accordance with Section 3 hereof); (ii) the issuance of all of the shares of Common Stock reserved for issuance under the Plan; (iii) the expiration of the Plan; (iv) the first meeting of stockholders at which Directors of the Company are to be elected that occurs after the close of the third calendar year following the calendar year in which occurred the first registration of an equity security of the Company under Section 12 of the Exchange Act; or (v) such other date required by Section 162(m) of the Code and the rules and regulations promulgated thereunder.  The foregoing limitation shall be adjusted proportionately in connection with any change in the Company’s capitalization as described in Section 13 hereof.  For purposes of this Section 6(c), if an Option is canceled in the same calendar year it was granted (other than in connection with a transaction described in Section 13 hereof), the canceled Option will be counted against the limit set forth in this Section 6(c).  For this purpose, if the exercise price of an Option is reduced, the transaction shall be treated as a cancellation of the Option and the grant of a new Option.
 
 
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(d)   Limitations on Total Outstanding Issuances .    The Administrator shall not issue Options or Stock Purchase Rights which, when combined and aggregated with all other issued and outstanding Options or Stock Purchase Rights, would result in all such issued and outstanding Options and Stock Purchase Rights representing, in the aggregate, more than twenty-five percent (25%) of the total number of issued and outstanding Shares of the Company.
 
7.   Term of Plan
 
.  The Plan shall become effective upon its initial adoption by the Board and shall continue in effect until it is terminated under Section 15 hereof.  No Options or Stock Purchase Rights may be issued under the Plan after the tenth (10th) anniversary of the earlier of (a) the date upon which the Plan is adopted by the Board or (b) the date the Plan is approved by the stockholders.
 
8.   Term of Option
 
.  The term of each Option shall be stated in the Option Agreement; provided , however , that the term shall be no more than ten (10) years from the date of grant thereof.  In the case of an Incentive Stock Option granted to a Holder who, at the time the Option is granted, owns (or is treated as owning under Code Section 424) stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company (or a “parent corporation” or “subsidiary corporation” thereof within the meaning of Code Sections 424(e) or 424(f), respectively), the term of the Option shall be five (5) years from the date of grant or such shorter term as may be provided in the Option Agreement.
 
9.   Option Exercise Price and Consideration .
 
(a)   Per Share Exercise Price .  Except as provided in Section 13 hereof, the per share exercise price for the Shares to be issued upon exercise of an Option shall be such price as is determined by the Administrator, but shall be subject to the following:
 
(i)   In the case of an Incentive Stock Option
 
(A)   granted to an Employee who, at the time of grant of such Option, owns (or is treated as owning under Code Section 424) stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company (or a “parent corporation” or “subsidiary corporation” thereof within the meaning of Code Sections 424(e) or 424(f), respectively), the per Share exercise price shall be no less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant.
 
 
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(B)   granted to any other Employee, the per Share exercise price shall be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.
 
(ii)   In the case of a Non-Qualified Stock Option, the per Share exercise price shall be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.
 
(iii)   Notwithstanding the foregoing, an Option may be granted with a per Share exercise price other than as required above if such Option is granted as an assumption of or in substitution for another option in connection with a merger or other corporate transaction.
 
(b)   Consideration .  The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant).  Such consideration may consist of (1) cash; (2) check; (3) with the consent of the Administrator, a full recourse promissory note bearing interest (at no less than such rate as is a market rate of interest and which then precludes the imputation of interest under the Code), payable upon such terms as may be prescribed by the Administrator, and structured to comply with Applicable Laws; (4) with the consent of the Administrator, other Shares which have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option shall be exercised; (5) with the consent of the Administrator, surrendered Shares then issuable upon exercise of the Option having a Fair Market Value on the date of exercise equal to the aggregate exercise price of the Option or exercised portion thereof; (6) with the consent of the Administrator, property of any kind which constitutes good and valuable consideration; (7) with the consent of the Administrator, applicable “cashless” exercise provisions to be included in one or more Option Agreements, or (8) with the consent of the Administrator, delivery of a notice that the Holder has placed a market sell order with a broker with respect to Shares then issuable upon exercise of the Options and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price, provided , that payment of such proceeds is then made to the Company upon settlement of such sale; or (8) with the consent of the Administrator, any combination of the foregoing methods of payment.
 
 
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10.   Exercise of Option .
 
(a)   Vesting; Fractional Exercises .  Except as provided in Section 13 hereof, Options granted hereunder shall be vested and exercisable according to the terms hereof at such times and under such conditions as determined by the Administrator and set forth in the Option Agreement.  An Option may not be exercised for a fraction of a Share.
 
(b)   Deliveries upon Exercise .  All or a portion of an exercisable Option shall be deemed exercised upon delivery of all of the following to the Secretary of the Company, his or her office, or such other authorized representative of the Company:
 
(i)   A written or electronic notice complying with the applicable rules established by the Administrator stating that the Option, or a portion thereof, is exercised.  The notice shall be signed or transmitted electronically, as applicable, by the Holder or other person then entitled to exercise the Option or such portion of the Option;
 
(ii)   Such representations and documents as the Administrator, in its sole discretion, deems necessary or advisable to effect compliance with Applicable Laws.  The Administrator may, in its sole discretion, also take whatever additional actions it deems appropriate to effect such compliance, including, without limitation, placing legends on share certificates and issuing stop transfer notices to agents and registrars;
 
(iii)   Upon the exercise of all or a portion of an unvested Option pursuant to Section 10(h) hereof, a Restricted Stock Purchase Agreement in a form determined by the Administrator and signed by the Holder or other person then entitled to exercise the Option or such portion of the Option; and
 
(iv)   In the event that the Option shall be exercised pursuant to Section 10(f) hereof by any person or persons other than the Holder, appropriate proof of the right of such person or persons to exercise the Option.
 
(c)   Conditions to Delivery of Share Certificates .  The Company shall not be required to issue or deliver any certificate or certificates for Shares purchased upon the exercise of any Option or portion thereof nor shall the Holder thereof be deemed to be a stockholder of the Company prior to fulfillment of all of the following conditions:
 
(i)   The admission of such Shares to listing on all stock exchanges on which such class of stock is then listed;
 
(ii)   The completion of any registration or other qualification of such Shares under any state or federal law, or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body which the Administrator shall, in its sole discretion, deem necessary or advisable;
 
(iii)   The obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its sole discretion, determine to be necessary or advisable;
 
 
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(iv)   The lapse of such reasonable period of time following the exercise of the Option as the Administrator may establish from time to time for reasons of administrative convenience; and
 
(v)   The receipt by the Company of full payment for such Shares, including payment of any applicable withholding tax, which in the sole discretion of the Administrator may be in the form of consideration used by the Holder to pay for such Shares under Section 9(b) hereof.
 
(d)   Termination of Relationship as a Service Provider .  If a Holder ceases to be a Service Provider other than by reason of the Holder’s Disability or death, such Holder may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent that the Option is vested on the date of exercise; provided , however , that, prior to the Public Trading Date, to the extent required by Applicable Law, such period of time shall not be less than thirty (30) days (but in no event later than the expiration of the term of the Option as set forth in the Option Agreement).  In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for three (3) months following the Holder’s termination.  If, after termination, the Holder does not exercise his or her Option within the time period specified, herein, the Option shall terminate, and the Shares covered by such Option shall again become available for issuance under the Plan.
 
(e)   Disability of Holder .  If a Holder ceases to be a Service Provider as a result of the Holder’s Disability, the Holder may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent the Option is vested on the date of exercise; provided , however , that prior to the Public Trading Date, to the extent required by Applicable Law, such period of time shall not be less than six (6) months (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement).  In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following the Holder’s termination.  If, after termination, the Holder does not exercise his or her Option within the time specified, herein, the Option shall terminate, and the Shares covered by such Option shall again become available for issuance under the Plan.
 
(f)   Death of Holder .  If a Holder dies while a Service Provider, the Option may be exercised within such period of time as is specified in the Option Agreement;   provided , however , that prior to the Public Trading Date, to the extent required by Applicable Law, such period of time shall not be less than six (6) months (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement), by the Holder’s estate or by a person who acquires the right to exercise the Option by bequest or inheritance, but only to the extent that the Option is vested on the date of exercise.  In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following the Holder’s termination.  The Option may be exercised by the executor or administrator of the Holder’s estate or, if none, by the person(s) entitled to exercise the Option under the Holder’s will or the laws of descent or distribution.  If the Option is not so exercised within the time specified, herein, the Option shall terminate, and the Shares covered by such Option shall again become available for issuance under the Plan.
 
(g)   Regulatory Extension .  A Holder’s Option Agreement may provide that if the exercise of the Option following the termination of the Holder’s status as a Service Provider would be prohibited at any time solely because the issuance of shares would violate the registration requirements under the Securities Act, then the Option shall terminate on the earlier of (i) the expiration of the term of the Option set forth in Section 8 hereof or (ii) the expiration of a period of three (3) months after the termination of the Holder’s status as a Service Provider during which the exercise of the Option would not be in violation of such registration requirements.
 
(h)   Early Exercisability .  The Administrator may provide in the terms of a Holder’s Option Agreement that the Holder may, at any time before the Holder’s status as a Service Provider terminates, exercise the Option in whole or in part prior to the full vesting of the Option; provided , however , that subject to Section 19 hereof, Shares acquired upon exercise of an Option which has not fully vested may be subject to any forfeiture, transfer, or other restrictions as the Administrator may determine in its sole discretion.
 
 
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(i)   Buyout Provisions .  The Administrator may at any time offer to buyout for a payment in cash or Shares, an Option previously granted, based on such terms and conditions as the Administrator shall establish and communicate to the Holder at the time that such offer is made.
 
11.   Non-Transferability of Options and Stock Purchase Rights
 
.  Options and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Holder, only by the Holder.
 
12.   Stock Purchase Rights .
 
(a)   Rights to Purchase .  Stock Purchase Rights may be issued either alone, in addition to, or in tandem with Options granted under the Plan and/or cash awards made outside of the Plan.  After the Administrator determines that it will offer Stock Purchase Rights under the Plan, it shall advise the offeree in writing of any terms, conditions, and/or restrictions related to the offer, including the number of Shares that such person shall be entitled to purchase, the price to be paid, and the time within which such person must accept such offer.  The offer shall be accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator.
 
(b)   Repurchase Right .  Unless the Administrator determines otherwise, any Restricted Stock Purchase Agreement shall grant the Company the right to repurchase Shares acquired upon exercise of a Stock Purchase Right upon the termination of the purchaser’s status as a Service Provider for any reason.  Subject to Section 19 hereof, the purchase price for Shares repurchased by the Company pursuant to any such repurchase right and the rate at which any such repurchase right shall lapse shall be determined by the Administrator in its sole discretion, and shall be set forth in the Restricted Stock Purchase Agreement.
 
 
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(c)   Other Provisions .  Any Restricted Stock Purchase Agreement shall contain such other terms, provisions, and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion.
 
(d)   Rights as a Stockholder .  Once the Stock Purchase Right is exercised, the purchaser shall have rights equivalent to those of a stockholder and shall be a stockholder when his or her purchase is entered upon the stock records of the Company.  No adjustment shall be made for a dividend or other right for which the record date is prior to the date the Stock Purchase Right is exercised, except as provided in Section 13 hereof.
 
13.   Adjustments upon Changes in Capitalization, Merger, or Asset Sale .
 
(a)   Adjustments Authorized .  In the event that the Administrator determines that, other than with respect to an Equity Restructuring, any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), reorganization, merger, consolidation, combination, repurchase, liquidation, dissolution, or sale, transfer, exchange, or other disposition of all or substantially all of the assets of the Company, or exchange of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, or other similar corporate transaction or event, in the Administrator’s sole discretion, affects the Common Stock such that an adjustment is determined by the Administrator to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be made available under the Plan or with respect to any Option, Stock Purchase Right, or Restricted Stock, then the Administrator shall, in such manner as it may deem equitable, adjust any or all of:
 
(i)   the number and kind of shares of Common Stock (or other securities or property) with respect to which Options or Stock Purchase Rights may be granted or awarded (including, but not limited to, adjustments of the limitations in Section 3 hereof on the maximum number and kind of shares which may be issued and adjustments of the maximum number of Shares that may be purchased by any Holder in any calendar year pursuant to Section 6(c) hereof);
 
(ii)   the number and kind of shares of Common Stock (or other securities or property) subject to outstanding Options, Stock Purchase Rights, or Restricted Stock; and
 
(iii)   the grant or exercise price with respect to any Option or Stock Purchase Right.
 
(b)   Adjustment Actions Authorized .  In the event of any transaction or event described in Section 13(a) hereof, the Administrator, in its sole discretion, and on such terms and conditions as it deems appropriate, either by the terms of the Option, Stock Purchase Right, or Restricted Stock or by action taken prior to the occurrence of such transaction or event and either automatically or upon the Holder’s request, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be made available under the Plan or with respect to any Option, Stock Purchase Right, or Restricted Stock granted or issued under the Plan or to facilitate such transaction or event:
 
 
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(i)   To provide for either the purchase of any such Option, Stock Purchase Right, or Restricted Stock for an amount of cash equal to the amount that could have been obtained upon the exercise of such Option or Stock Purchase Right or realization of the Holder’s rights had such Option, Stock Purchase Right, or Restricted Stock been currently exercisable or payable or fully vested or the replacement of such Option, Stock Purchase Right, or Restricted Stock with other rights or property selected by the Administrator in its sole discretion;
 
(ii)   To provide that such Option or Stock Purchase Right shall be exercisable as to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the provisions of such Option or Stock Purchase Right;
 
(iii)   To provide that such Option, Stock Purchase Right, or Restricted Stock be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights, or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices;
 
(iv)   To make adjustments in the number and type of shares of Common Stock (or other securities or property) subject to outstanding Options and Stock Purchase Rights, and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding Options, Stock Purchase Rights, or Restricted Stock or Options, Stock Purchase Rights, or Restricted Stock which may be granted in the future; and/or
 
(v)   To provide that immediately upon the consummation of such event, such Option or Stock Purchase Right shall not be exercisable and shall terminate; provided , that for a specified period of time prior to such event, such Option or Stock Purchase Right shall be exercisable as to all Shares covered thereby, and the restrictions imposed under an Option Agreement or Restricted Stock Purchase Agreement upon some or all Shares may be terminated and, in the case of Restricted Stock, some or all shares of such Restricted Stock may cease to be subject to repurchase, notwithstanding anything to the contrary in the Plan or the provisions of such Option, Stock Purchase Right, or Restricted Stock Purchase Agreement.
 
(c)   Proportional Adjustments .  In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in Section 13(a) and 13(b) hereof:
 
(i)   The number and type of securities subject to each outstanding Option or Stock Purchase Right and the exercise price or grant price thereof, if applicable, will be proportionately adjusted.  The adjustments provided under this Section 13(c)(i) shall be nondiscretionary and shall be final and binding on the affected Holder and the Company.
 
(ii)   The Administrator shall make such proportionate adjustments, if any, as the Administrator in its sole discretion may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Section 3 hereof).
 
 
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(d)   Change in Control .  If the Company undergoes a Change in Control, then any surviving corporation or entity or acquiring corporation or entity, or affiliate of such corporation or entity, may assume any Options, Stock Purchase Rights, and/or Restricted Stock outstanding under the Plan or may substitute similar stock awards (including an award to acquire the same consideration paid to the stockholders in the transaction described in this Section 13(d)) for those outstanding under the Plan.  In the event any surviving corporation or entity or acquiring corporation or entity in a Change in Control, or affiliate of such corporation or entity, does not assume such Options, Stock Purchase Rights, or Restricted Stock or does not substitute similar stock awards for those outstanding under the Plan, then with respect to (i) Options, Stock Purchase Rights, and Restricted Stock held by participants in the Plan whose status as a Service Provider has not terminated prior to such event, the vesting of such Options, Stock Purchase Rights, and Restricted Stock (and, if applicable, the time during which such awards may be exercised) shall be accelerated and made fully exercisable and all restrictions thereon shall lapse at least ten (10) days prior to the closing of the Change in Control (and the Options or Stock Purchase Rights terminated if not exercised prior to the closing of such Change in Control) and (ii) any other Options or Stock Purchase Rights outstanding under the Plan, such Options and Stock Purchase Rights shall be terminated if not exercised prior to the closing of the Change in Control.
 
(e)   Further Provisions and Limitations .  Subject to Section 3 hereof, the Administrator may, in its sole discretion, include such further provisions and limitations in any Option, Stock Purchase Right, Restricted Stock Purchase Agreement, or certificate, as it may deem equitable and in the best interests of the Company.
 
(f)   No Effect or Restrictions .  The existence of the Plan, any Option Agreement or Restricted Stock Purchase Agreement, and the Options or Stock Purchase Rights granted hereunder shall not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization, or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, warrants, or rights to purchase stock or of bonds, debentures, preferred, or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.
 
14.   Time of Granting Options and Stock Purchase Rights
 
.  The date of grant of an Option or Stock Purchase Right shall be, for all purposes, the date on which the Administrator makes the determination granting such Option or Stock Purchase Right, or such other date as is determined by the Administrator consistent with applicable legal requirements.  Notice of the determination shall be given to each Service Provider to whom an Option or Stock Purchase Right is so granted within a reasonable time after the date of such grant.
 
15.   Amendment and Termination of the Plan .
 
 
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(a)   Amendment and Termination .  Subject to the requirements of subsection (c), the Board may at any time wholly or partially amend, alter, suspend, or terminate the Plan.  However, without approval of the Company’s stockholders given within twelve (12) months before or after the action by the Board, no action of the Board may, except as provided in Section 13 hereof, increase the limits imposed in Section 3 hereof on the maximum number of Shares which may be issued under the Plan or extend the term of the Plan under Section 7 hereof.
 
(b)   Stockholder Approval .  The Board shall obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.
 
(c)   Effect of Amendment or Termination .  No amendment, alteration, suspension, or termination of the Plan or any Option or Stock Purchase Right shall impair the rights of any Holder, unless mutually agreed otherwise between the Holder and the Administrator, which agreement must be in writing and signed by the Holder and the Company.  Termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Options, Stock Purchase Rights, or Restricted Stock granted or awarded under the Plan prior to the date of such termination.
 
16.   Stockholder Approval
 
.  The Plan will be submitted for the approval of the Company’s stockholders within twelve (12) months after the date of the Board’s initial adoption of the Plan.  Options or Stock Purchase Rights may be granted prior to such stockholder approval, provided , that if such approval has not been obtained at the end of said twelve-month period, all Options and Stock Purchase Rights previously granted under the Plan shall thereupon be canceled and become null and void and any Shares issued upon exercise thereof shall immediately, and without further action on the part of the Company, be rescinded.
 
17.   Inability to Obtain Authority
 
.  The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.
 
18.   Reservation of Shares
 
.  The Company, during the term of the Plan, shall at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.
 
19.   Repurchase Provisions
 
.  The Administrator in its sole discretion may provide that the Company may repurchase Shares acquired upon exercise of an Option or Stock Purchase Right upon the occurrence of certain specified events, including, without limitation, a Holder’s termination as a Service Provider, divorce, bankruptcy, or insolvency; provided , however , that any such repurchase right shall be set forth in the applicable Option Agreement or Restricted Stock Purchase Agreement or in another agreement referred to in such agreement.
 
20.   Rules Particular To Specific Countries .
 
(a)   Generally .  To the extent required by the Company, each Holder agrees that he or she shall enter into an election with the Company or a Subsidiary (in a form approved by the Company) under which any Tax Liability (as defined below) including, but not limited to, National Insurance Contributions (“ NICs ”) and any Fringe Benefit Tax (“ FBT ”), is transferred to and met by the Plan participant.  For purposes of this Section 20, Tax Liability shall mean any and all liability under applicable non-U.S. laws, rules, or regulations, from any income tax, the Company’s (or a Subsidiary’s) NICs, FBT, or similar liability, and the Service Provider’s NICs, FBT, or similar liability under applicable non-U.S. law that are attributable to: (A) the grant, vesting, or exercise of, or any other benefit derived by the Plan participant from an Option, Stock Purchase Right, or Restricted Stock; (B) the acquisition by the Plan participant of the Shares on exercise of an Option or the acquisition by the Plan participant of the Shares pursuant to a Stock Purchase Right; or (C) the disposal of any Shares acquired by the Plan participant pursuant to an Option or a Stock Purchase Right granted under the Plan.
 
 
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                                (b)   Addendum .  Notwithstanding anything herein to the contrary, the terms and conditions of the Plan with respect to Service Providers who are tax residents of a particular country other than the United States may be subject to an addendum to the Plan in the form of an Appendix. To the extent that the terms and conditions set forth in an Appendix conflict with any provisions of the Plan, the provisions of the Appendix shall govern. The adoption of any such Appendix shall be pursuant to Section 15 above.
 
21.   Investment Intent
 
.  The Company may require a Plan participant, as a condition of exercising or acquiring stock under any Option or Stock Purchase Right, (i) to give written assurances satisfactory to the Company as to the participant’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Option or Stock Purchase Right; and (ii) to give written assurances satisfactory to the Company stating that the participant is acquiring the stock subject to the Option or Stock Purchase Right for the participant’s own account and not with any present intention of selling or otherwise distributing the stock.  The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (A) the issuance of the shares upon the exercise or acquisition of stock under the applicable Option or Stock Purchase Right has been registered under a then currently effective registration statement under the Securities Act or (B) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under then applicable securities laws.  The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the stock.
 
 
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22.   Section 409A .  To the extent that the Administrator determines that any Option, Stock Purchase Right, or Restricted Stock granted or awarded under the Plan is subject to Section 409A of the Code, the agreement evidencing such Option, Stock Purchase Right, or Restricted Stock shall incorporate the terms and conditions required by Section 409A of the Code.  To the extent applicable, the Plan and the agreement evidencing such option, Stock Purchase Right, or Restricted Stock shall be interpreted in accordance with Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder.  Notwithstanding any provision of the Plan to the contrary, in the event that the Administrator determines that any Option, Stock Purchase Right, or Restricted Stock may be subject to Section 409A of the Code and related Department of Treasury regulations and other interpretive guidance issued thereunder, the Administrator may adopt such amendments to the Plan and the applicable agreement or adopt other policies and procedures (including amendments, policies, and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (a) exempt the Option, Stock Purchase Right, or Restricted Stock from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Option, Stock Purchase Right, or Restricted Stock, or (b) comply with the requirements of Section 409A of the Code and related Department of Treasury regulations and other interpretive guidance thereunder and thereby avoid the application of any penalty taxes under such Section.
 
23.   Governing Law
 
.  This Plan shall be governed by and construed in accordance with the laws of the State of Delaware excluding that body of law pertaining to conflicts of law.
 

 
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CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
We hereby consent to the use in the foregoing Amendment No. 4 to the Registration Statement on Form S-1 (File No. 333-198967) of our report dated June 27, 2014 relating to the consolidated balance sheets of GrowBlox Sciences, Inc. as of March 31, 2014 and 2013, and the related consolidated statements of operations, changes in stockholders’ equity (deficiency), and cash flows for the two (2) years then ended. We also consent to the reference to our Firm under the caption “Experts” in the Registration Statement.
 
/s/ LJ Sullivan certified Public Accountant, LLC
 
Miami Beach, Florida
December 22, 2014