Growblox Sciences, Inc. (Form: 10-Q, Received: 08/15/2016 16:02:57)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________

FORM 10-Q

__________________________

(Mark One)

ý	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2016

☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to ___________

Commission file number: 000-55462

GROWBLOX SCIENCES, INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other Jurisdiction of Incorporation or organization)

59-3733133

(IRS Employer I.D. No.)

3550 W. Teco Avenue

Las Vegas, Nevada 89118

Phone: (866) 721-0297

(Address and telephone number of

principal executive offices)

N/A

(Former name, former address and former fiscal year, if changed since last report )

Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ý Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐

Accelerated filer ☐

Non-accelerated filer ☐

(Do not check if a smaller Reporting Company)

Smaller reporting company ý

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act). ☐ Yes ý No

There were 64,495,701 shares of common stock, par value $0.0001 per share, outstanding as of August 9, 2016.

GROWBLOX SCIENCES, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2016

INDEX

PART I – FINANCIAL INFORMATION		Page

Item 1.	Financial Statements	3

	Condensed Consolidated Balance Sheets at June 30, 2016 (unaudited) and March 31, 2016	3

	Condensed Consolidated Statements of Operations (unaudited) for the Three Months Ended June 30, 2016 and 2015	4

	Condensed Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended June 30, 2016 and 2015	5

	Notes to Condensed Consolidated Financial Statements (unaudited)	6

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	14
Item 4.	Controls and Procedures	14

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	16
Item 1A	Risk Factors	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Mine Safety Disclosures	18
Item 5.	Other Information	18
Item 6.	Exhibits	19

SIGNATURES		21

INDEX

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

GROWBLOX SCIENCES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(unaudited)

	30-Jun-16			31-Mar-16


CURRENT ASSETS:
Cash and cash equivalents	$	178,325		$	34,824
Accounts receivable		67,862			67,862
Prepaid expenses		89,849			104,851
TOTAL CURRENT ASSETS		336,036			207,537
Property and Equipment, Net		2,935,172			1,953,048
Deposits and Prepayments		269,560			271,455
Other Assets		19,134			3,555
TOTAL ASSETS	$	3,559,902		$	2,435,595
CURRENT LIABILITIES:
Accounts Payable	$	762,577		$	902,123
Accrued Interest		95,145			61,786
Accrued Liabilities		844,815			834,348
Notes Payable, net of unamortized discount of $0.3 million and $0.4 million at June 30, 2016 and March 31, 2016, respectively		499,847			463,532
TOTAL CURRENT LIABILITIES		2,202,384			2,261,789
Note Payable		2,020,195			2,148,556
TOTAL LIABILITIES		4,222,579			4,410,345
Commitments and Contingencies (Note 7)
STOCKHOLDERS' (DEFICIT)/ EQUITY:
Common Stock Common Stock, $0.0001 par value, 250,000,000 shares authorized, 57,973,614 and 47,335,147 shares issued and outstanding at June 30, 2016 and March 30, 2016		5,797			4,733
Deferred Stock Compensation		2,318,827			2,240,662
Additional Paid In Capital		19,180,234			16,638,318
Accumulated Deficit		(22,120,731	)		(20,779,860	)
TOTAL GROWBLOX SCIENCES, INC. STOCKHOLDERS' (DEFICIT)/EQUITY		(615,873	)		(1,896,147	)
Non-controlling interest		(46,804	)		(78,603	)
TOTAL (DEFICIT)/EQUITY		(662,677	)		(1,974,750	)
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)/EQUITY	$	3,559,902		$	2,435,595

The accompanying notes are an integral part of these condensed consolidated financial statements

INDEX

GROWBLOX SCIENCES, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS
(unaudited)




	For the Three Months Ended June 30,
	2016			2015

NET REVENUE	$	-		$	-
GENERAL AND ADMINISTRATIVE EXPENSES		1,207,781			1,522,765
LOSS FROM OPERATIONS		(1,207,781	)		(1,522,765	)
OTHER INCOME (EXPENSE)
Interest Expense		(158,713	)		(658	)
Other Income/(Expense)		(12,416	)		1,219
Total other expense		(171,129	)		561
NET LOSS		(1,378,910	)		(1,522,204	)
Net loss attributable to non-controlling interest		(38,201	)		(180,456	)
NET LOSS ATTRIBUTABLE TO GROWBLOX SCIENCES, INC.	$	(1,340,709	)	$	(1,341,748	)
Net loss per share - basic and diluted	$	(0.03	)	$	(0.03	)
Weighted average common shares outstanding - basic and diluted		50,068,724			41,026,532

The accompanying notes are an integral part of these consolidated condensed financial statements

INDEX

GROWBLOX SCIENCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)


	Three Months Ended June 30,
	2016			2015
OPERATING ACTIVITIES:
Net income (loss)	$	(1,378,910	)	$	(1,522,204	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		46,761			43,519
Stock-based compensation		452,497			398,411
Amortization of debt discount and discount for beneficial conversion feature		125,174			-
Loss on disposal		5,572			-
Changes in operating assets and liabilities:
Prepaid expenses and other assets		15,002			(21,747	)
Accounts payable		(206,339	)		(12,960	)
Accrued expenses		(17,675	)		28,117
Net cash used in operating activities		(957,918	)		(1,086,864	)
INVESTING ACTIVITIES:
Purchase of property and equipment		(877,697	)		(197,797	)
Change in deposits		(14,764	)		(4,717	)
Net cash used in investing activities		(892,461	)		(202,514	)
FINANCING ACTIVITIES:
Proceeds from issuance of common stock and warrants		1,293,804			1,308,165
Proceeds from non-controlling interest		70,000			300,000
Proceeds from notes payable		-			100,000
Cash used to purchase warrants		-			(56,000	)
Other financing activities		630,076			-
Net cash provided by financing activities		1,993,880			1,652,165
Net change in cash and cash equivalent		143,501			362,787
CASH AND CASH EQUIVALENT AT BEGINNING OF PERIOD		34,824			-
CASH AND CASH EQUIVALENT AT END OF PERIOD	$	178,325		$	332,787
Non-cash transactions:
Stock issued to settle payables	$	255,232		$	-
Stock issued to upon partial conversion of long-term note payable	$	500,000		$	-
Stock issued to settle advance	$	-		$	150,000

The accompanying notes are an integral part of these consolidated condensed financial statements

INDEX

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1 – Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements of Growblox Sciences, Inc. (the "Company," "We" or "Us") have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulations S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending March 31, 2017. The balance sheet at March 31, 2016 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended March 31, 2016.

Principles of Consolidation

The consolidated financial statements include all operating divisions and majority owned subsidiaries, reported as a single operating segment, for which we maintain controlling interests. Intercompany accounts and transactions have been eliminated in consolidation.

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.

Reclassifications

Certain reclassifications have been made to the comparative period amounts in order to conform to the current period presentation. These reclassifications had no effect on the reported financial position, results of operations or cash flows of the entity.

Significant Accounting Policies

A description of the Company's significant accounting policies is included in Note 3 of its Annual Report on Form 10–K for the fiscal year ended March 31, 2016.

Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board ("FASB") issued amended accounting guidance that changes the accounting for leases and requires expanded disclosures about leasing activities. Under the new guidance, lessees will be required to recognize a right-of-use asset and a lease liability, measured on a discounted basis, at the commencement date for all leases with terms greater than twelve months. Lessor accounting will remain largely unchanged, other than certain targeted improvements intended to align lessor accounting with the lessee accounting model and with the updated revenue recognition guidance issued in 2014. Lessees and lessors must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The amended guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2018, and early application is permitted. The Company is currently evaluating the impact this guidance will have on its financial position and results of operations.

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Management does not believe that any other recently issued but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.

Note 2 – Going Concern

The Company's financial statements have been prepared assuming the Company will continue as a going concern. The Company has sustained net losses since inception, which have caused an accumulated deficit of approximately $22.1 million at June 30, 2016. In addition, the Company has consumed cash in its operating activities of approximately $1 million for the three months ended June 30, 2016 compared to $1.1 million for the same period last year. 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 financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that may be necessary in the event the Company is unable to continue as a going concern.

Note 3 – Convertible Notes

In February 2016, the Company issued a short-term Promissory Note ("Note") with a face value of $192,500 resulting in aggregate proceeds of $175,000 reflecting a 9.1% original discount and a nominal rate of 10%. The Note is payable within one year of issuance and is convertible into 962,500 shares of the Company's common stock and 962,500 common stock purchase warrants at any time and from time to time before maturity at the option of the holder. Each warrant gives the Noteholder the right to purchase one share of common stock of the Company at an exercise price of $0.50 per share for a period of three years. The beneficial conversion feature resulting from the discounted conversion price compared to the market price was calculated based on the date of issuance to be $94,037 after adjusting the effective conversion price for the relative fair value of the note proceeds compared to the fair value of the attached warrants and note. In addition to this discount related to the beneficial conversion feature, an additional discount of $66,912 was recorded based on the fair value of the 962,500 warrants attached to the note. This value was derived using the Black-Scholes valuation model. At June 30, 2016, the Note had a balance of $0.09 million net of $0.1 million unamortized discount and beneficial conversion feature.

In March 2016, the Company issued a short-term Promissory Note ("Note") with a face value of $300,000 resulting in aggregate proceeds of $250,000 reflecting a 16.67% original discount and a nominal rate of 20%. The Note is payable within one year of issuance and is convertible into 1,500,000 shares of the Company's common stock and 1,500,000 common stock to purchase warrants at any time and from time to time before maturity at the option of the holder. Each warrant gives the Noteholder the right to purchase one share of common stock of the Company at an exercise price of $0.50 per share for a period of three years. The beneficial conversion feature resulting from the discounted conversion price compared to the market price was calculated based on the date of issuance to be $143,750 after adjusting the effective conversion price for the relative fair value of the note proceeds compared to the fair value of the attached warrants and note. In addition to this discount related to the beneficial conversion feature, an additional discount of $93,750 was recorded based on the fair value of the 1,500,000 warrants attached to the note. At June 30, 2016, the Note had a balance of $0.1 million net of $0.2 million unamortized discount and beneficial conversion feature.

The Notes and Warrants were issued in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 (the " Securities Act ") and/or Rule 506 of Regulation D under the Securities Act, as amended.

Note 4– Note Payable

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The Company entered into a Note Purchase Agreement, dated May 12, 2015 and effective as of June 8, 2015, with Pacific Leaf Ventures, LP ("Pacific Leaf"), pursuant to which Pacific Leaf has made installment loans (the "Loans") to us in the aggregate amount of $1.75 million. The purpose of the financing is to provide for the acquisition and installation of an operating facility, equipment and other tangible assets by GBSN. Such facility and equipment will be dedicated to the cultivation of cannabis and the extraction of oils and other constituents present in cannabis, subject at all times to Nevada legal requirements. The note is convertible at the option of the holder into common shares at a conversion price of $0.50, subject to anti-dilution adjustments.

To evidence the Loans, the Company issued to Pacific Leaf a 6% senior secured convertible promissory note (the "Note"), bearing interest at the rate of 6% per annum, payable quarterly. All outstanding principal and interest due under the Note were due and payable on May 12, 2020. We were required to prepay the outstanding principal amount of the Note on a quarterly basis in an amount equal to 50% of the cash flow (accrued EBITDA) of GB Sciences Nevada, LLC ("GBSN") attributable to our percentage interest in GBSN no later than the earlier to occur of (a) the fifth (5th) business day following receipt of a distribution of the Company's Share of GBSN's EBITDA for the calendar quarter in question, or (b) thirty (30) days following the end of the calendar quarter in question, with the first such prepayment to be made not later than July 31, 2015 with respect to the quarter ending June 30, 2015. In order to induce the Pacific Leaf to extend the loan to the Company and to secure the payment and performance of all of the Secured Obligations, the Company agreed to grant Secured Party a security interest in certain of its assets and enter into the lending agreement.

On February 8, 2016, the Company entered into the Amended and Restated 6% Senior Convertible Promissory Note ("Amended Note") with Pacific Leaf Ventures, LP ("Pacific Leaf"). The amended agreement modifies the 6% Senior Secure Convertible Promissory Note dated May 12, 2015 and effective as of June 8, 2015, in the principal amount of $1.75 million.

Per the terms of the amended agreement, Pacific Leaf may make up to $1.0 million in additional advances to the Company under the Amended Note bringing the total in the aggregate to $2.75 million. The note is convertible at the option of the holder into common shares at a conversion price of $0.25, subject to anti-dilution adjustments. The Company has an option to prepay the Amended Note, without premium or penalty, in whole or in part, with accrued interest to the date of such prepayment.

Until the payment in full of the Amended Note, the Investor or its designee shall have the option (the "Option") to purchase up to a 20% membership interest in GBSN for a purchase price equal to $100,000 for each 2% of membership interest purchased (i.e., $1,000,000 if the Option is exercised in full), provided that the Option may not be exercised for less than a 1% membership interest in GBSN.

In connection with the Amended Note, the Company also entered into the Amended and Restated Royalty Agreement with Pacific Leaf dated and effective as of February 8, 2016. Per the terms of the Amended Royalty Agreement, the royalty rate at any time shall equal to the sum of (i) 9.1%, and (ii) the percentage calculated by dividing the amount advanced in excess of $1.75 million by $1.0 million, multiplied by the gross revenues of GBSN. On the earlier of (i) the seventh anniversary of the royalty payment date, or (ii) the date that all amounts outstanding under the Amended Note have been paid in full, the royalty rate shall be reduced by 50%.

On June 13, 2016 the Company received notice from Pacific Leaf Ventures, LP ("Pacific Leaf") that it had elected to convert $500,000 of the Company's indebtedness to Pacific Leaf Note into common stock of the Company pursuant to the Amended and Restated 6% Senior Secured Convertible Promissory. Accordingly, the Company has issued 2,000,000 shares of its common stock ($500,000 converted at a price of $0.25 per share) to Pacific Leaf and the Company's indebtedness to Pacific Leaf pursuant to the Note has been reduced by $500,000. As of June 30, 2016, the total amount of installments received, net of conversion, is $2.02 million.

Note 5 – Property and Equipment

Property and equipment balances as of June 30, 2016 and March 31, 2016:

INDEX

	As of June 30, 2016			As of March 31, 2016
Computer and software	$	151,748		$	151,748
Machinery and equipment		643,394			641,898
Leaseholds		357,418			363,317
Construction in progress		2,075,086			1,043,042
		3,227,646			2,200,005
Less accumulated depreciation and amortization		(292,474	)		(246,957	)
Property and equipment, net	$	2,935,172		$	1,953,048

Note 6 – Capital Transactions

During the three months ended June 30, 2016, the Company issued an aggregate of 835,967 shares of common stock in settlement and release of certain obligations owed by the Company to various persons and recorded related expenses of $0.3 million, as follows:

The Company issued 512,275 shares of its common stock in connection with the conversion of $0.2 million in indebtedness owed by us to various persons at a conversion price of approximately $0.38 per share.

The Company issued 323,692 shares of common stock in connection with settlement of payroll liabilities owed by us to our executives at a conversion price of $0.19 per share. The Company recorded approximately $0.1 million of compensation expense.

The Company issued 100,000 shares of common stock to employees and recorded an expense of $0.03 million.

On April 8, 2016, the Company issued 200,000 of its common shares to its former Chief Financial Officer, in exchange for a full dismissal with prejudice of all causes of action pending in the complaint filed against the Company on August 19, 2015.

The Company issued 50,000 shares in exchange for consulting services and recorded a related expense of $0.02 million.

During three months ended June 30, 2016, the Company sold 7,425,500 units through a private placement at a price of $0.20 per unit resulting in net proceeds of $1.3 million. Each unit consisted of one share of common stock and one common stock purchase warrant, expiring in three years, with an exercise price of $0.50.

Options

On June 1, 2016, we issued 900,000 stock options under our 2014 Equity Incentive Plan to the independent members of the Company's Board of Directors. The options are exercisable upon vesting for a period of 7 years from issuance at an exercise price of $0.16 per share.

On June 1, 2016, we issued 1,400,000 stock options under our 2014 Equity Incentive plan to our Chief Executive Officer. The options are exercisable upon vesting for a period of 7 years from issuance at an exercise price of $0.30 per share.

On June 1, 2016, we issued 1,200,000 stock options under our 2014 Equity Incentive plan to our Chief Sciences Officer. The options are exercisable upon vesting for a period of 10 years from issuance at an exercise price of $0.30 per share.

On June 30, 2016, we issued 200,000 stock options under our 2014 Equity Incentive Plan to various employees. The options are exercisable upon vesting for a period of 10 years from issuance at an exercise price of $0.30 per share. All of the foregoing securities were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933 (the " Securities Act ") and/or Rule 506 of Regulation D under the Securities Act, as amended.

Note 7 – Commitments and Contingencies

Growblox Sciences, Inc. v. GCM Administrative Services, LLC

On April 2, 2014, we commenced an action in the United States District Court for the Southern District of New York captioned Signature Exploration and Production Corporation v. GCM Administrative Services, LLC, Strategic Turnaround Equity Partners, L.P. (Cayman), Seth M. Lukash, and Gary Herman, 14 Civ. 02280 (ER) (the "Action"). After the change of name of Signature Exploration and Production Corporation, the caption was amended to substitute GrowBlox Sciences, Inc. as the plaintiff. The complaint in the Action sought a declaratory judgment that neither Lukash nor Herman was entitled to receive any interest in, including any shares of stock of, Growblox pursuant to certain share conversion rights held under promissory notes in the aggregate amount of $75,000, given by a related party of ours to the entity defendants GCM and Strategic.

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On May 9, 2014, defendants filed an answer denying the complaint's material allegations, and asserted a counterclaim against us, against persons identified as certain of our officers or directors, and against GrowOpp, LLC and Tumbleweed Holdings, Inc. On November 19, 2014, defendants filed an amended counterclaim, including a prayer for monetary relief or damages in the sum of $9 million. We moved to dismiss the counterclaim and by opinion dated June 2, 2015, the Court granted the motion in part and dismissed counts one and two (for declaratory judgment as to an alleged partnership or joint venture, and for breach of fiduciary duty predicated upon those allegations), and denied the motion in part, leaving counts three and four of the counterclaim standing. The Court viewed the third and fourth claims as a single claim for unjust enrichment, in which recovery would be based on quantum meruit, that is, upon the alleged value of any benefit conferred by defendants to us through alleged work and services rendered. In view of the fact that the pleading did not assign a particular value to that claim we are unable at present to advise what specific sum of money damages is sought. We did not challenge the fifth count of the counterclaim at this stage that seeks damages of $75,000 for alleged non-payment of the above-referenced promissory notes.

The Company and its adversaries entered an agreement in principle, subject to the execution of formal documents and dated as of June 20, 3016, to settle and dismiss the action. The Company's board approved the settlement on July 6, 2016. The parties are in the process of executing a formal, written settlement agreement. Under the settlement, the Company will deliver 1,400,000 shares of its common stock to its adversaries. Craig Ellins, formerly CEO of the Company and now its chief scientific officer, will deliver 3,000,000 shares that he owns personally. Based on our estimate of potential outcomes, we have accrued $0.5 million with respect to this matter as of June 30, 2016.

Cathryn Kennedy Complaint Settlement

On August 19, 2015, Cathryn Kennedy, our former Chief Financial Officer, filed a Complaint against us in the District Court in Clark County, Nevada alleging that she was assigned new duties by us which constituted a termination without cause effective July 24, 2015, and that as a consequence thereof she is entitled to severance, vacation pay and stock compensation from us pursuant to her Employment Agreement dated November 18, 2014. On April 8, 2016, the Company entered into a mutual agreement with Cathryn Kennedy per terms of which the Company issued 200,000 of its unrestricted common shares in exchange for a full dismissal with prejudice of all causes of action pending in the above-referenced Complaint.

From time to time, the Company also becomes involved in certain legal proceedings and claims which arise in the ordinary course of business. In our opinion, based on consultations with outside counsel, the results of any of these ordinary course matters, individually and in the aggregate, are not expected to have a material effect on our results of operations, financial condition, or cash flows. As more information becomes available, if management should determine that an unfavorable outcome is probable on such a claim and that the amount of such probable loss that it will incur on that claim is reasonably estimable, we will record a reserve for the claim in question. If and when we record such a reserve is recorded, it could be material and could adversely impact our results of operations, financial condition, and cash flows.

Note 8 – Loss per Share

The Company's basic loss per share has been calculated using the weighted average number of common shares outstanding during the period. The Company had 31,359,167 and 27,558,334 of potentially dilutive common shares at June 30, 2016 and March 31, 2016, respectively. 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 9 – Subsequent Events

GB Sciences Nevada LLC

On July 21, 2016, an entity associated with Pacific Leaf Partners, LLC completed the purchase of the building housing the Company's cultivation facility at 3550 W. Teco Ave., Las Vegas, NV. In connection with the purchase, the Company entered into an amended lease agreement per the terms of which the initial term of the lease covering the facility was extended to ten years, with an optional five-year extension.

On August 4, 2016, the Company entered into the Second Omnibus Amendment ("Amendment") of its existing agreements with Pacific Leaf Ventures, LP ("Pacific Leaf"). Principally, the Amendment eliminates Pacific Leaf's option to purchase up to a 20% membership interest in GB Sciences Nevada LLC ("GBSN") and reduces Pacific Leaf's existing royalty rate to 16.4%. It also caps maximum aggregate royalty payments to be made to Pacific Leaf at $2,420,000 with respect to any calendar year. In consideration of the amended terms , Pacific Leaf will receive 1,000,000 shares of the Company's common stock and a five-year warrant to purchase 1,500,000 shares of the Company's common stock at $0.36 per share.

Growblox Sciences, Inc. v. GCM Administrative Services, LLC Settlement

On August 9, 2016, the Company finalized a settlement agreement in final disposition of the lawsuit filed by the Company on April 2, 2014, in the United States District Court for the Southern District of New York. The Company's obligation under the agreement is to issue 1,400,000 shares of restricted common stock to certain non-affiliates of the Company.

Executive Appointments

On August 5, 2016, the Company's Board of Directors accepted the resignation of John Poss as Chief Financial Officer of the Company and appointed Ksenia Griswold as the Company's Vice President and Chief Financial Officer. Mr. Poss will continue to serve as the President, Chief Executive Officer, and Chief Operating Officer of the Company. Ms. Griswold has been serving as the controller of the Company since November, 2015. For the five years prior to that time beginning in October, 2010, she worked in the Las Vegas, Nevada office of Ernst & Young, LLP. At the time of her departure from Ernst & Young, she was audit manager. It is expected that an amendment to Ms. Griswold's employment agreement and compensation will be negotiated during the upcoming fiscal quarter.

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ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis contains "forward-looking statements," as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "could", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts" or "continue" , which list is not meant to be all-inclusive and other such negative terms and comparable technology. These forward-looking statements, include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results. Additional factors that could materially affect these forward-looking statements and/or predictions include among other things: (1)product demand, market and customer acceptance of Growblox Sciences products, equipment and other goods, (ii) ability to obtain financing to expand its operations, (iii) ability to attract qualified personnel, (iv)competition pricing and development difficulties, (v) general industry and market conditions and growth rates, unexpected natural disasters, and other factors, which we have little or no control: and other factors discussed in the Company's filings with the Securities and Exchange Commission ("SEC"). The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this report.

The following discussion highlights the Company's results of operations and the principal factors that have affected our financial condition, as well as our liquidity and capital resources for the periods described, and provides information that management believes is relevant for an assessment and understanding of the statements of financial condition and results of operations presented herein. The following discussion and analysis is based on the Company's unaudited financial statements contained in this Quarterly Report, which we have prepared in accordance with United States generally accepted accounting principles. You should read this discussion and analysis together with such financial statements and the related notes thereto.

Overview

The Company seeks to be an innovative technology and solution company that converts the cannabis plant into medicines, therapies and treatments for a variety of ailments. The Company is developing and utilizing state of the art technologies in plant biology, cultivation and extraction techniques, combined with biotechnology, and plans to produce consistent and measurable medical-grade cannabis, cannabis concentrates and cannabinoid therapies.

Although we believe that maximum shareholder value will ultimately be achieved through the development, production and marketing of certified cannabinoid medicines, therapies and treatments, in order to generate cash flow and near term profitability, we intend to cultivate and dispense cannabis for medical purposes in both Nevada and other states which permit such sales and in which we and our operating partners are able to obtain cultivation and dispensing licenses.

We seek to become a trusted producer of consistent and efficacious medicinal strains and products, combining both cannabinoids and terpenes, which we intend to market in those states within the United States and in other countries where the sale of medical cannabis products are permitted. In addition, subject to obtaining Food and Drug Administrative (FDA) certification, we intend to market our cannabinoid based drug discoveries on a world-wide basis.

INDEX

We were incorporated in the State of Delaware on April 4, 2001, under the name "Flagstick Venture, Inc." On March 28, 2008, stockholders owning a majority of our outstanding common stock approved changing our then name "Signature Exploration and Production Corp." as our business model had changed.

On March 13, 2014, we entered into a definitive assets purchase agreement for the acquisition of assets, including the Growblox(TM) cultivation technology which resulted in a change in our corporate name on April 4, 2014, from Signature Exploration and Production Corporation to Growblox Sciences, Inc.

Plan of Operation

The Company will cultivate cannabis using innovative, but conventional methods in its wholly owned subsidiary, GB Sciences Nevada, LLC ("GBSN"). GBSN is in the final states of opening Phase 1 of an approximately 28,000 sq. ft. facility in Las Vegas, Nevada. When all phases of construction are completed, the facility is expected to produce 6,800 pounds of marijuana per year and generate revenues of $16.9 million, based on a projected wholesale price of $2,500 per pound. Completion of all Phases of this facility is dependent upon the availability of capital to complete construction. The Company has made completion of all Phases of this facility its number one priority. In that connection, we have received every approval from licensing and occupancy permit that we have sought to date, and we expect to have our first crop growing in our state-of-the-art pharmaceutical grade cultivation rooms by October 1, 2016. Our first harvest will be approximately 10 weeks later.

We expect our products to compete well in the marketplace because of the considerable efforts we have made in the plant genetics and tissue culturing of our proprietary strains of cannabis. And, we are the exclusive Nevada grower of Kyle Kushman's proprietary marijuana strains which have been highly rated top sellers in California. Furthermore our ownership interest in the Showgrow dispensary on Fort Apache Boulevard in Las Vegas guarantees retail distribution of our products from that facility. Our products will have enough exposure to ensure that consumers can appreciate its quality and superiority compared to other brands.

The current emphasis on near-term cash flow allows us to plan for exploiting the potential of our science assets. We recently formed Growblox Life Sciences, LLC and have retained Fenwick & West, a Silicon Valley based law firm focusing on life sciences and high technology companies with a nationally top-ranked intellectual property practice, to development strategies for the protection of the Company's intellectual property.

Our proprietary Growblox chambers, anticipated to be commercially ready during the second quarter of fiscal 2017 will enable us to grow a 100% consistent and cost-effective pharmaceutical grade cannabis which is important irrespective of its ultimate consumers; a consistent recreational brand will be as important to consumers as a consistent medicine will be to its patients. Ultimately, our science will enable us to identify and develop proprietary strains, which will provide us with raw materials for our soon to be patented medical compounds.

RESULTS OF OPERATIONS

The following table sets forth certain of our Statements of Operations data:

	Three months ended June 30,
	2016			2015

Revenue	$	-		$	-
General and administrative expenses		1,207,781			1,522,765
Other income/(expense)		(171,129	)		561
Loss attributable to non-controlling interest		(38,201	)		(180,456	)
Net income/(loss)		(1,340,709	)		(1,341,748	)

Comparison of the Three Months Ended June 30, 2016 and 2015

INDEX

Revenues

The Company has not achieved any operating revenues to date.

General and administrative expenses

General and administrative expenses decreased $0.3 million to $1.2 million for the three months ended June 30, 2016 compared to $1.5 million for the three months ended June 30, 2015. The decrease in primarily attributable to $0.2 million decrease in consulting and advisory services related to development of our proprietary GrowBLOX Suites combined with a $0.1 million decrease in legal expenses.

Other expense

Total other expense increased by $0.2 million compared to the same period in prior year. The increase in primarily due to the recognition of $0.03 million in accrued interest related to the Pacific Leaf Loan and $0.13 million amortization of the debt discount related to the beneficial conversion features discount recorded on the convertible debt.

LIQUIDITY AND CAPITAL RESOURCES

Current Liquidity

The Company will need additional capital to implement our strategies. There is no assurance that it will be able to raise the amount of capital needed for future growth plans. Even if financing is available, it may not be on terms that are acceptable. If unable to raise the necessary capital at the times required, the Company may have to materially change the business plan, including delaying implementation of aspects of the business plan or curtailing or abandoning the business plan. The Company represents a speculative investment and investors may lose all of their investment. In order to be able to achieve the strategic goals, the Company needs to further expand its business and financing activities. Based upon the cash position, it is necessary to raise additional capital by the end of the next quarter in order to continue to fund current operations. These factors raise substantial doubt about the ability to continue as a going concern. The Company is pursuing several alternatives to address this situation, including the raising of additional funding through equity or debt financings. In order to finance existing operations and pay current liabilities over the next twelve months, the Company will need to raise approximately $4-5 million of capital depending upon license status. No assurance can be given that the Company will be able to operate profitably on a consistent basis, or at all, in the future.

The principal sources of liquidity to date have been cash generated from sales of debt and equity securities and loans.

At June 30, 2016, cash was $0.18 million, other current assets excluding cash were $0.16 million and our working capital deficit was $1.9 million. At the same time, current liabilities were approximately $2.2 million, which consisted principally of $0.8 million in accrued liabilities, $0.8 million in accounts payable, and $0.5 million in notes payable. At March 31, 2016, the Company had cash balance $0.03 million, other current assets excluding cash were $0.2 million and our working capital deficit was $2.1 million. Current liabilities were approximately $2.3 million, which consisted principally of $0.9 million in accounts payable, $0.8 million in accrued liabilities, and $0.5 million in notes payable. An improvement in our liquidity position at June 30, 2016 compared to March 31, 2016 is primarily attributable to the capital raised through private offerings.

Sources and Uses of Cash

Operating Activities

Net cash used in operating activities was $1 million for the three months ended June 30, 2016, as compared to net cash used of $1.1 million for the three months ended June 30, 2015. We anticipate that cash flows from operations may be insufficient to fund business operations for the next twelve-month period. Accordingly, we will have to generate additional liquidity or cash flow to fund our current and anticipated operations. This will likely require the sale of additional common stock or other securities. There is no assurance that we will be able to realize any significant proceeds from such sales, if at all.

INDEX

Investing Activities

During the three months ended June 30, 2016 and 2015, the Company used $0.9 million and $0.2 million, respectively, of cash in investing activities. The cash used in investing activities during the three months ended June 30, 2016 and 2015 was primarily for the purchase of property and equipment.

Financing Activities

During the three months ended June 30, 2016 and 2015, cash flows from financing activities totaled $2 million and $1.7 million, respectively. Cash flows from financing activities for the three months ended June 30, 2016 related primarily to $1.3 million in proceeds from the issuance of common stock and warrants, $0.6 million in other financing activities consisting primarily of deferred stock compensation, and $0.07 million in proceeds from non-controlling interests. Cash flows from financing activities for the three months ended June 30, 2015 related primarily to $1.3 million in proceeds from the issuance of common stock and warrants, $0.3 million in proceeds from non-controlling interests, and $0.1 million in proceeds from notes payable.

GOING CONCERN

The unaudited interim financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize assets and discharge liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of approximately $22.1 million as of June 30, 2016, and further losses are anticipated in the development of the business raising substantial doubt about the ability to continue as a going concern. The ability to continue as a going concern is dependent upon generating profitable operations in the future and/or obtaining the necessary financing to meet obligations and repay liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and/or private placements of debt and equity securities. The financials do not include any adjustments relating to the recoverability and reclassification of recorded asset amounts, or amounts and classifications of liabilities that might result from this uncertainty.

VARIABLES AND TRENDS

In the event the Company is able to obtain the necessary financing to progress with its business plan, the Company expects expenses to increase significantly to grow the business. Accordingly, the comparison of the financial data for the periods presented may not be a meaningful indicator of future performance and must be considered in light of these circumstances.

CRITICAL ACCOUNTING POLICIES

A description of the Company's significant accounting policies is included in Note 3 of its Annual Report on Form 10–K for the fiscal year ended March 31, 2016.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

ITEM 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that material information required to be disclosed in the periodic reports filed under the Securities Exchange Act of 1934, as amended, or 1934 Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms and to ensure that such information is accumulated and communicated to management, including the chief executive officer and chief financial officer as appropriate, to allow timely decisions regarding required disclosure. At the end of the quarter ended June 30, 2016, the Company carried out an evaluation, under the supervision and with the participation of management, including the principal executive officer and the principal financial officer, of the effectiveness of the design and operation of disclosure controls and procedures, as defined in Rule 13(a)-15(e) and Rule 15d-15(e) under the 1934 Act. Based on this evaluation, management concluded that as of June 30, 2016 the disclosure controls and procedures were not effective due to material weaknesses as no member of our board of directors qualifies as an "audit committee financial expert" as defined in Item 407(d)(5) of Regulation S-K promulgated under the Securities Act.

INDEX

Limitations on Effectiveness of Controls and Procedures

Management, including the Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), does not expect that disclosure controls and procedures will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Controls

During the fiscal quarter ended June 30, 2016, there have been no changes in the internal controls over financial reporting that have materially affected or are reasonably likely to materially affect the internal controls over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1. Legal Proceedings

Growblox Sciences, Inc. v. GCM Administrative Services, LLC

INDEX

Cathryn Kennedy Complaint Settlement

ITEM 1A. Risk Factors

There are no material changes from the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2016, as filed with the SEC.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

Common Stock

Options

INDEX

ITEM 3. Defaults Upon Senior Securities

None.

ITEM 4. Mine Safety Disclosures

Not Applicable.

ITEM 5. Other Information

Board of Directors Expansion and Management Changes

Effective April 29, 2016 the Company's Board of Directors was expanded to five members. As a result of the expansion, the Board of Directors elected Leslie Bocskor, Shane Terry and John Poss to serve as Members of the Board of Directors for a term of three years to fill the three existing vacancies.

The Board of Directors also accepted the resignation of Craig Ellins as Chief Executive Officer of the Company and immediately appointed Craig Ellins to serve as Chief Innovation Officer of the Company.

The Board of Directors elected John Poss to serve as Chief Executive Officer until such time as the Board of Directors can identify and hire a suitable replacement. Mr. Poss has been serving as the CFO of the Company since August, 2015 and its COO since December 31, 2015. He will continue serving as CFO and COO until suitable replacements can be recruited.

On June 1, 2016, the Board of Directors established compensation for outside directors to be $25,000 annually with an additional $1,000 for each meeting attended. The compensation is payable in cash or stock at the election of the Company. The outside directors also each received options to purchase 450,000 shares of stock which vest over 24 months. The strike price of the options is $0.16 per share, the market value of the Company's common stock on the date the outside directors were elected to the Board.

Amendments to the Executive Employment Agreements

Pursuant to the appointment of Mr. Poss as the Company's President, Chief Executive Officer and Board Member, the Company entered into an Amended and Restated Employment Agreement, effective June 1, 2016. The agreement will end on May 1, 2017, which end date can be extended upon the mutual agreement of the parties. Under the agreement Mr. Poss will receive an annual salary of not less than $120,000 and quarterly bonuses equal to the value of 125,000 shares of Growblox common stock. Bonuses are payable in S-8 stock or cash in the discretion of the Company. Under the agreement, Mr. Poss will also receive options to acquire 1,400,000 shares of the Company's common stock subject to certain vesting requirements. The option strike price is the market value of the stock on the date the options were granted.

Effective on June 1, 2016, the Company amended its employment agreement with its Chief Science Officer, Andrea Small-Howard. Pursuant to the amendment, Ms. Small-Howard surrendered a stock award for 450,000 shares of common stock in exchange for warrants to purchase 1.2 million common shares at the strike price of $0.30 per share.

Also on June 1, 2016, the Board amended compensation arrangements with Mr. Craig Ellins, the Chairman and Chief Innovation Officer of the Company. Pursuant to the amendment, warrants issued on June 22, 2015, for the purchase of 5,000,000 shares of common stock of the Company at the exercise price of $0.45 per share were cancelled and warrants for the purchase of 5,000,000 shares of common stock of the Company at the exercise price of $0.30 were issued to Mr. Ellins.

INDEX

Establishment of Audit and Compensation Committees

Audit Committee

On July 6, 2016, the Board established the Audit Committee and approved and adopted a charter (the "Audit Committee Charter") to govern the Audit Committee. The audit committee is comprised of Leslie Bocskor and Shane Terry, each of whom is independent under the rules of the Securities and Exchange Commission and the Nasdaq Stock Market listing standards. Leslie Bocskor is designated the chairperson of the committee. In addition to the enumerated responsibilities of the Audit Committee in the Audit Committee Charter, the primary function of the Audit Committee is to assist the Board in its general oversight of our accounting and financial reporting processes, audits of our financial statements, and internal control and audit functions.

Compensation Committee

On July 6, 2016, the Board established the Compensation Committee and approved and adopted a charter (the "Compensation Committee Charter"). The compensation committee is comprised of Leslie Bocskor and Shane Terry, each of whom is independent under the rules of the Securities and Exchange Commission and the Nasdaq Stock Market listing standards. Leslie Bocskor is designated the chairperson of the committee. In addition to the enumerated responsibilities of the Compensation Committee in the Compensation Committee Charter, the primary function of the Compensation Committee is to oversee the compensation of our executives, produce an annual report on executive compensation for inclusion in our proxy statement, if and when required by applicable laws or regulations, and advise the Board on the adoption of policies that govern our compensation programs.

ITEM 6. Exhibits

In reviewing the agreements included as exhibits to this Form 10-Q, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements. The agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the parties to the applicable agreement and:

should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and

were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this Form 10-Q and the Company's other public filings, which are available without charge through the SEC's website at http://www.sec.gov.

INDEX

The following exhibits are included as part of this report:

Exhibit Number		Description of Exhibit
3.1		Articles of Incorporation ( Incorporated by reference to an exhibit to Form SB-2 No. 333-82580 filed with the Commission on February 12, 2002)
3.2		Amendment to Articles of Incorporation ( Incorporated by reference to Exhibit 3.2 to Form S-1/A No. 333-82580 filed with the Commission on October 6, 2014 and Exhibit 3.2 to Form 10-K No. 333-82580 filed with the Commission on June 27, 2014 )
3.3		Bylaws ( Incorporated by reference to an exhibit to Form SB-2 No. 333-82580 filed with the Commission on February 12, 2002 )
10.1		Pacific Leaf Ventures LP Second Omnibus Amendment and Waiver
31.1		Certification of Principal Executive Officer and Pursuant to Rule 13a-14
31.2		Certification of Principal Financial Officer Pursuant to Rule 13a-14
32.1*		CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
32.2*		CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		XBRL Taxonomy Extension Labels Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

* This certification is being furnished and shall not be deemed "filed" with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference

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SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GROWBLOX SCIENCES, INC.

August 15, 2016	By:	/s/ John Poss
	John Poss, Chief Executive Officer (Principal Executive Officer)

	GROWBLOX SCIENCES, INC.

August 15, 2016	By:	/s/ Ksenia Griswold
	Ksenia Griswold, Chief Financial Officer (Principal Financial Officer)

Exhibit 10.1

SECOND OMNIBUS AMENDMENT

THIS SECOND OMNIBUS AMENDMENT (this " Amendment ") is entered into as of August 4, 2016 (the " Amendment Date "), between Growblox Sciences, Inc., a Delaware corporation (the " Company "), GB Sciences Nevada LLC, a Nevada limited liability company (" GBS Nevada ") and Pacific Leaf Ventures, LP (the " Investor ").

R E C I T A L S

A. The Company and the Investor are parties to that certain Note Purchase Agreement dated as of May 12, 2015 and made effective June 8, 2015 (as amended from time to time, the " Purchase Agreement "), and a related Amended and Restated 6% Senior Secured Convertible Promissory Note in the nominal principal amount of $2,750,000 (the " Note ").

B. GBS Nevada and the Investor are parties to that certain Amended and Restated Royalty Agreement dated as of February 8, 2016 (the " Royalty Agreement "). Unless otherwise indicated herein, all capitalized terms used herein have the respective meanings set forth in the Purchase Agreement.

C. The Company, GBS Nevada and the Investor previously entered into an Omnibus Amendment and Waiver, dated as of February 8, 2016 (the " First Amendment ").

D. The Company, GBS Nevada and the Investor desire to further amend the Royalty Agreement, the Note, and the First Amendment, and to enter into certain related agreements in connection therewith, as set forth in this Amendment.

NOW, THEREFORE, in consideration of these premises and other valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree, as follows:

1. Funding of the Note . The Investor and the Company acknowledge and agree that the principal amount of loans advanced by the Investor to the Company under the Note as of the date hereof is $2,595,195, which amount includes (i) $75,000 of expenses incurred by the Investor at the Company's request in connection with the sale of the Teco F acility, which expenses are hereby deemed to constitute advances to the Company under the Note, and (ii) $500,000 of advances that have been converted to common stock of the Company. The Investor hereby commits to make additional advances to the Company under the Note in the aggregate amount of $154,805 no later than December 31, 2016 so that Investor shall have made aggregate advances to the Company under the Note in the amount of $2,750,000.

2. Amendment to Royalty Agreement . Section 1.2 of the Royalty Agreement is hereby amended and restated in its entirety to read as follows:

"1.2 Royalty Payments . In consideration of the transfer by PACIFIC LEAF of the Intellectual Property pursuant to the Section 1.1, and the Support provided by PACIFIC LEAF to GBS Nevada and GBS Delaware, during the period (the "Royalty Period") commencing on the Effective Date and ending ten (10) years after the date the first complete royalty payment in excess of twenty-five thousand dollars ($25,000) is actually made to PACIFIC LEAF with respect to any fiscal quarter under this Agreement (the "First Royalty Payment Date"), GBS Nevada shall pay to PACIFIC LEAF within forty-five (45) days after the end of each calendar quarter an amount equal to the Royalty Rate (defined below) multiplied by the gross sales revenues of GBS Nevada and its subsidiaries from all sources during the preceding fiscal quarter, including, without limitation (i) from the sale of cannabis produced at the Teco Facility, (ii) from the sale of

its cannabis at dispensaries operated by GBS Partners, and (iii) received by it in respect of the Profits Interest issued to under the GBS Partners Agreements. The Royalty Rate at any time shall be equal to 16.4%; provided, however , that following the later of (i) the seventh anniversary of the First Royalty Payment Date, and (ii) the date that all amounts outstanding under the Note have been repaid in full, the Royalty Rate shall be reduced to 8.2%. Notwithstanding the foregoing, (i) the maximum aggregate royalty payments to be made to PACIFIC LEAF under this Agreement shall not exceed $2,420,000 with respect to any calendar year, and (ii) in the event the royalty payment required to be paid to PACIFIC LEAF with respect to any fiscal quarter exceeds GBS Nevada's Adjusted EBITDA (as defined below) for such quarter, GBS Delaware shall be entitled to defer the payment of such excess until the next royalty payment is to be made to PACIFIC LEAF hereunder for the succeeding calendar quarter. For the purposes hereof, " Adjusted EBITDA " means, with respect to any calendar quarter, the sum of GBS Nevada's (i) net income, (ii) interest expense, (iii) income taxes, (iv) depreciation, and (v) amortization, minus the royalty payment to be made hereunder to PACIFIC LEAF with respect to such calendar quarter. Adjusted EBITDA shall be calculated in accordance with U.S. generally accepted accounting principles and consistent with the Company's financial statements it files with the Securities and Exchange Commission.

3. Amendment to Note . Section 3A(viii) of the Note (Management of GBS Nevada) Amendment is hereby deleted in its entirety.

4. Amendment to First Amendment Agreement . Section 7 of the First Amendment (GBS Nevada Purchase Option) is hereby de

leted in its entirety.

5. Disclosure of Non-public Information . Each of the Company and GBS Nevada covenant and agree that until the Note has been repaid in full, unless the provisions of this paragraph are expressly waived in writing by the Investor (i) neither the Company nor GBS Nevada shall disclose to the Investor any non-public information with respect to the Company or any of its subsidiaries (including GBS Nevada) that could be deemed to be material to an investor in the common stock of the Company, and (ii) in the event the Company or GBS Nevada discloses such information to the Investor in violation of clause (i) above, the Company shall immediately disclose such information in a Current Report on Form 8-K filed with the Securities and Exchange Commission.

6. Issuance of Common Stock and Warrant . In consideration of the agreements of the Investor under this Amendment, the Company shall issue to the Investor immediately following the execution of this Amendment (i) 1,000,000 shares of the Company's common stock, and (ii) a five-year warrant to purchase 1,500,000 shares of the Company's common stock at a price equal to the closing price of the common stock on the date hereof, substantially in the form of Exhibit A hereto (which includes provisions for cashless exercise).

7. Reaffirmation of Loan Documents . Except as amended and modified hereby, all of the terms and provisions of the Purchase Agreement and the other Transaction Documents shall remain in full force and effect and are hereby in all respects ratified and confirmed by the Company. The Company hereby agrees that except as expressly provided in this Amendment, the amendments and modifications herein contained shall in no manner affect or impair the liabilities, duties and obligations of the Company under the Transaction Documents.

8. Representations and Warranties . As a material inducement for the Investor to enter into this Amendment, the Company hereby represents and warrants to the Investor that after giving effect to this Amendment: (a) all representations and warranties in the Purchase Agreement and the other Transaction Documents are true and correct in all material respects, as though made on the date hereof, except to the

extent that (i) any of them speak to a different specific date or may have otherwise been made inaccurate by the mere passage of time; or (ii) the facts or circumstances on which any of them were based have been changed by transactions or events not prohibited by the Transaction Documents; (b) no Event of Default under the Note will exist after giving effect to this Amendment; and (c) this Amendment has been duly authorized and approved by all necessary organizational action and requires the consent of no other person, and is binding and enforceable against the Company in accordance with its terms. The Company further represents and warrants to the Investor as of the date of this Amendment that (i) GBS Nevada holds a duly issued provisional certificate (the " Certificate ") from the Division of Public & Behavioral Health of the Nevada Department of Health and Human Services to operate an establishment to cultivate medical cannabis at 3550 W. Teco Avenue, Las Vegas, Nevada, (ii) such Certificate is in good standing, (iii) GBS Nevada is in compliance with all applicable legal requirements for the issuance and maintenance of the Certificate, and (iv) neither the Company nor GBS Nevada has received any notice that such Certificate may be revoked nor is any of them aware of any grounds for such revocation.

9. Miscellaneous .

(a)

All of the terms and provisions of this Amendment shall bind and inure to the benefit of the parties hereto and their respective successors and assigns.

(b)

This Amendment may be executed in counterparts and by different parties hereto in separate counterparts each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. Delivery of photocopies of the signature pages to this Amendment by facsimile or electronic mail shall be effective as delivery of manually executed counterparts of this Amendment.

(c)

The headings, captions and arrangements used in this Amendment are, unless specified otherwise, for convenience only and shall not be deemed to limit, amplify or modify the terms of this Amendment, nor affect the meaning thereof.

(d)

Any provision of this Amendment held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

(e)

This Amendment shall be construed in accordance with and governed by the laws of the State of Delaware.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above.

GROWBLOX SCIENCES, INC.

By: /s/ John Poss
Name: John Poss
Title: President

GB SCIENCES NEVADA LLC

By: /s/ John Poss
Name: John Poss
Title: President

PACIFIC LEAF VENTURES, LP

By: / s/ Sean Harris
Name: Sean Harris
Title: Manager of General Partner

Signature Page to Second Omnibus Amendment

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John Poss, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Growblox Sciences, Inc.;

2. Based on my knowledge, the quarterly report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures; and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls.

Date: August 15, 2016	/s/ John Poss
	John Poss, Chief Executive Officer (Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ksenia Griswold, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Growblox Sciences, Inc.;

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls.

Date: August 15, 2016	/s/ Ksenia Griswold
	Ksenia Griswold, Chief Financial Officer (Principal Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Growblox Sciences, Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John Poss, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Date: August 15, 2016	/s/ John Poss
	John Poss, Chief Executive Officer (Principal Executive Officer)

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Growblox Sciences, Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ksenia Griswold , Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 15, 2016	/s/ Ksenia Griswold
	Ksenia Griswold, Chief Financial Officer (Principal Financial Officer)