The high SG&A was my main concern when I visited TECO. But I was explained that a good part of it was non-cash due to warrants been vested during December. That the expense run rate had increase a bit due to the bigger operation but it was within my estimates. And that break even was possible with the CURA oil operation alone. It is also the quarter for the compensations. A lot of non-cash items.
From what I understand from Note-11 of the last 10-Q. GBS gave up all interest in GBSPR in exchange for current and further liabilities.
I remember now the CEO talking a little bit about the Box. I think he said "We got rid of that part of the business". Saying that it wasn't making any money and it was a drag for the operation. I remember telling him "but we kept the concept with the Clean Rooms"
I think the CEO lost interest from the original design or concept of the Box because it was inefficient to handle the amount of plants needed or too small to produce the volume required to provide the cash flow necessary to sustain the medical part of the business. The Box was like a small room (Maybe half a 20 ft container) where you created the right atmosphere for the plant to grow by itself delivering very high yields and it was fully automatic.
Well, the size turned out to be too small for handling the amount of plants needed in an efficient manner. So the "Clean Rooms" were created. Far bigger rooms but fully monitored for the precise atmosphere required. Humidity, CO2, temperature (Lights). Each room is fully sealed and has a computer at the door to monitor and record all aspects of the grow cycle, with independent air filter and its own water tank with nutrients. Which are also carefully monitored, recorded and balanced. And the air in all the rooms are recycled (I think 4 times every day) through VH Voltage FDA approved UV lights. Just like in any medicine production facility. And that's why the very high, constant and replicable yields. I even remember listening to some soft reggae music in the rooms while I was there. the installations are something else. Very impressive. I think there is only one company that uses this Clean Rooms concept in Canada called Tilray. I think is private.
GBS is trying new lights that are doubling the levels of Terpenes which we need for the " Myrcene Containing Complex Mixtures" or MCCM. Myrcene is the most abundant terpene in the cannabis plant and this terpene determines the effect the THC, CBD, CBN and others cannabinoids have in a person. But it is produced in a very small quantity (less than 2%) so been able to double it is a great achievement. Specially going forward. Also of importance; the pounds per light ratio has been improving and is far better than the first grow cycles from last year.
I think the new company GBSPR reduced the size of the Box from the original concept to a more portable user friendly size. Maybe a great Idea for Labs and private growers but not for the business model @ TECO where high volume is required to produce cannabis medical grade oils.
So the original size of "The Box" turn out to be too small for GBS and too big for GBSPR.
But the Clean Rooms @ TECO preserved all the original concepts of the "GrowBlox" and then some because we have the tissue propagation @ TECO. And if you are wondering about it's effectiveness;, it is north of 70% and improving. It was only 20% a couple years ago.
