Can B Corp 10-Q for FY2023 Q2
Can B Corp (NASC)
About this 10-Q
Can B Corp filed this 10-Q on August 21, 2023, covering the quarter ended June 30, 2023 (FY2023 Q2).
Headline figures
Quarter ended June 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $420.59K
- down 66.9% from $1.27M a year earlier
- Net loss
- $2.03M
- compared with a net loss of $1.65M a year earlier
- Diluted EPS
- -$0.37
- compared with -$0.49 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For
the quarterly period ended
For the transition period from __________ to __________
COMMISSION
FILE NUMBER:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal, if changed since last report)
Securities Registered Pursuant to Section 12(b) of the Act:
| Tile of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None | CANB | N/A |
Indicate
by check mark whether the 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.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (§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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging Growth Company | |||
| (Do not check if smaller reporting company) |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒
The number of shares of the registrant’s only class of common stock issued and outstanding as of August 18, 2023 is .
Can B Corp.
FORM 10-Q
June 30, 2023
TABLE OF CONTENTS
| 2 |
PART 1 – FINANCIAL INFORMATION
Item 1. Financial Statements
Can B̅ Corp. and Subsidiaries
Consolidated Balance Sheets
| (Unaudited) | ||||||||
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts
receivable, less allowance for doubtful accounts of $ | ||||||||
| Inventory | ||||||||
| Note receivable | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Other assets: | ||||||||
| Deposits | ||||||||
| Intangible assets, net | ||||||||
| Property and equipment, net | ||||||||
| Right of use assets, net | ||||||||
| Other noncurrent assets | ||||||||
| Total other assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Due to related party | ||||||||
| Notes and loans payable, net | ||||||||
| Warrant liabilities | ||||||||
| Operating lease liability - current | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities: | ||||||||
| Notes and loans payable, net | ||||||||
| Operating lease liability - noncurrent | ||||||||
| Total long-term liabilities | ||||||||
| Total liabilities | $ | $ | ||||||
| Commitments and contingencies (Note 14) | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, authorized shares: | ||||||||
| Series
A Preferred stock, | ||||||||
| Series B Preferred stock, $ par value: shares authorized, issued and outstanding | ||||||||
| Series C Preferred stock, $ par value: shares authorized, shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | ||||||||
| Series D Preferred stock, $ par value: shares authorized, shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | ||||||||
| Common
stock, | ||||||||
| Common
stock issuable, | ||||||||
| Treasury stock | ( | ) | ( | ) | ||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See notes to consolidated financial statements
| 3 |
Can B̅ Corp. and Subsidiaries
Consolidated Statement of Operations
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenues | ||||||||||||||||
| Product sales | $ | $ | $ | $ | ||||||||||||
| Service revenue | ||||||||||||||||
| Total revenues | ||||||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross profit | ( | ) | ( | ) | ||||||||||||
| Operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Other income | ||||||||||||||||
| Change in fair value of warrant liability | ||||||||||||||||
| Gain on debt extinguishment | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ( | ) | ( | ) | ||||||||||||
| Other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss before provision for income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision for income taxes | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Loss per share - basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average shares outstanding - basic and diluted | ||||||||||||||||
See notes to consolidated financial statements
| 4 |
Can B̅ Corp. and Subsidiaries
Consolidated Statement of Stockholders’ Equity
Three Months Ended June 30, 2023 and 2022
| Series A | Series B | Series C | Series D | Common | Treasury | Additional | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Stock | Preferred Stock | Preferred Stock | Common Stock | Stock | Stock | Paid-in | Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Issuable | Shares | Amount | Capital | Deficit | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
| Three months ended June 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, April 1, 2023 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for services rendered | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for purchase of equipment | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sale of common stock | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock in lieu of interest payments | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2023 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Three months ended June 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, April 1, 2022 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for services rendered | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2022 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
See notes to consolidated financial statements
| 5 |
Six Months Ended June 30, 2023 and 2022
| Series A | Series B | Series C | Series D | Common | Treasury | Additional | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Stock | Preferred Stock | Preferred Stock | Common Stock | Stock | Stock | Paid-in | Accumulated |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Issuable | Shares | Amount | Capital | Deficit |
Total | |||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended June 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, January 1, 2023 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for services rendered | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for purchase of equipment | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Warrants issued in connection with the issuance of convertible note | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock in lieu of interest payments | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2023 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended June 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, January 1, 2022 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of Series A Preferred stock to Common stock | ( | ) | ( | ) | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sale of common stock | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock in lieu of note interest repayments | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for services rendered | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for equipment | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for asset acquisition | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2022 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
See notes to consolidated financial statements
| 6 |
Can B̅ Corp. and Subsidiaries
Consolidated Statement of Cash Flows
| 2023 | 2022 | |||||||
| Six Months Ended | ||||||||
| June 30, | ||||||||
| 2023 | 2022 | |||||||
| Operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation | ||||||||
| Depreciation | ||||||||
| Amortization of intangible assets | ||||||||
| Amortization of original-issue-discounts | ||||||||
| Bad debt expense | ||||||||
| Cancellation of debt | ( | ) | ||||||
| Change in fair value of warrant liability | ( | ) | ( | ) | ||||
| Stock-based interest expense | ||||||||
| Stock-based consulting expense | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Inventory | ( | ) | ||||||
| Prepaid expenses | ( | ) | ( | ) | ||||
| Operating lease right-of-use asset | ( | ) | ||||||
| Accounts payable | ||||||||
| Accrued expenses | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Investing activities: | ||||||||
| Purchase of property and equipment | ( | ) | ||||||
| Deposits paid | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Financing activities: | ||||||||
| Net proceeds received from notes and loans payable | ||||||||
| Proceeds from sale of common stock | ||||||||
| Repayments of notes and loans payable | ( | ) | ( | ) | ||||
| Deferred financing costs | ( | ) | ( | ) | ||||
| Amounts received from/repaid to related parties, net | ||||||||
| Net cash provided by financing activities | ||||||||
| Increase in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
| Supplemental Cash Flow Information: | ||||||||
| Income taxes paid | $ | $ | ||||||
| Interest paid | $ | $ | ||||||
| Non-cash Investing and Financing Activities: | ||||||||
| Issuance of common stock in lieu of repayment of notes payable | $ | $ | ||||||
| Issuance of common stock in asset acquisitions | $ | $ | ||||||
| Issuance of common stock for property and equipment | $ | $ | ||||||
| Debt discount associated with convertible note | $ | $ | ||||||
| Conversion of Series A Preferred stock to common stock | $ | $ | ||||||
| Issuance of common stock warrants in connection with convertible promissory note | $ | $ | ||||||
See notes to consolidated financial statements
| 7 |
Can B̅ Corp. and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2023
Note 1 – Organization and Description of Business
Can B̅ Corp. was originally incorporated as WrapMail, Inc. (“WRAP”) in Florida on October 11, 2005. On May 15, 2017, WRAP changed its name to Canbiola, Inc. On January 16, 2020 Canbiola, Inc. changed its name to Can B̅ Corp. (the “Company”, “we”, “us”, “our”, “CANB”, “Can B̅” or “Registrant”).
The Company acquired 100% of the membership interests in Pure Health Products, LLC, a New York limited liability company (“PHP” or “Pure Health Products”) effective December 28, 2018. The Company runs it manufacturing operations through PHP and holds and sells several of its brands through PHP as well. The Company’s durable equipment products, such as sam® units with and without CBD infused pads, are marketed and sold through its wholly owned subsidiaries, Duramed Inc. (incorporated on November 29, 2018) and Duramed MI LLC (fka DuramedNJ, LLC) (incorporated on May 29, 2019) (collectively, “Duramed”). Duramed began operating on or about February 1, 2019. Most of the Company’s consumer products include hemp derived cannabidiol (“CBD”); however, the Company has just recently begun extracting cannabinol (“CBN”) and cannabigerol (“CBG”) for wholesale to third parties looking to incorporate such compounds into their products through its wholly owned subsidiaries, Botanical Biotech, LLC (incorporated March 10, 2021), TN Botanicals, LLC and CO Botanicals LLC (both incorporated in August 2021). These three subsidiaries have also begun synthesizing Delta-8 and Delta-10 from hemp. Delta-8 and Delta-10 can produce similar, though less potent, effects as delta-9 (commonly referred to as THC); however, the legality of hemp derived Delta-8 and Delta-10 is in a gray area and considered a potential loophole at this point due to the 2018 hemp bill. The Company’s other subsidiaries did not have operations during the year ended December 31, 2022.
The Company is in the business of promoting health and wellness through its development, manufacture and sale of products containing cannabinoids derived from hemp biomass and the licensing of durable medical devices. Can B̅’s products include oils, creams, moisturizers, isolate, gel caps, spa products, and concentrates and lifestyle products. Can B̅ develops its own line of proprietary products as well seeks synergistic value through acquisitions in the hemp industry. Can B̅ aims to be the premier provider of the highest quality hemp derived products on the market through sourcing the best raw material and offering a variety of products we believe will improve people’s lives in a variety of areas.
Note 2 – Going Concern
The
condensed consolidated financial statements have been prepared on a “going concern” basis, which contemplates the realization
of assets and liquidation of liabilities in a normal course of business. As of June 30, 2023, the Company had cash and cash equivalents
of $
After careful consideration and analysis of the economics, supply chain, processing logistics, and management of manpower the Company decided to consolidate operations in its CO operations in Mead and Ft. Morgan. The company remains fully vertically integrated in legal hemp operations and sales with processing of hemp biomass and crude hemp oil into distillate, isolate, and ultimately into isomers. The Company moved all of its help processing equipment previously located in its Miami, FL operation under Botanical Biotech, LLC to its main hemp processing center in CO. The Company also terminated its lease with the Miami landlord. The Company moved all of the hemp processing equipment previously located in its McMinnville, TN operation under TN Botanicals, LLC to its main hemp processing center in CO.
As a result of these equipment moves, the Colorado operation will, once fully operational, improve operating efficiencies, increase management oversight, and be able to increase throughput by double compared to the prior three independent operating facilities. The Company expects to have the consolidated operation fully operational by the end of fiscal 2023. Senior management of the Company will be on-site in CO during this consolidation period to ensure maximum efficiencies and continue operations during this rebuilding period. Immediate impact of the consolidation is elimination of duplicate lines, better coordination of customer orders, reduction in transportation charges, and manpower efficiencies with larger batch sizes and reduced personnel.
The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
Note 3 – Basis of Presentation and Summary of Significant Accounting Policies
Basis of Financial Statement Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information, and with the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, these interim consolidated financial statements do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of the management of the Company, as defined below, these unaudited consolidated financial statements include all adjustments necessary to present fairly the information set forth therein. Results for interim periods are not necessarily indicative of results to be expected for a full year.
The consolidated balance sheet information as of December 31, 2022 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 Form 10-K”). The interim consolidated financial statements contained herein should be read in conjunction with the 2022 Form 10-K.
| 8 |
Can B̅ Corp. and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2023
Principles of Consolidation
The unaudited consolidated financial statements contained herein include the accounts of Can B Corp. and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated.
Use of Estimates
The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses in those financial statements. Certain significant accounting policies that contain subjective management estimates and assumptions include those related to revenue recognition, inventory, goodwill, intangible assets and other long-lived assets, income taxes and deferred taxes. Descriptions of these policies are discussed in the Company’s 2022 Form 10-K. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and adjusts when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods.
Significant Accounting Policies
The Company’s significant accounting policies are described in “Note 3: Summary of Significant Accounting Policies” of our 2022 Form 10-K.
| 9 |
Can B̅ Corp. and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2023
Segment reporting
As of June 30, 2023, the Company reports operating results and financial data in one operating and reportable segment. The Chief Executive Officer, who is the chief operating decision maker, manages the Company as a single profit center in order to promote collaboration, provide comprehensive service offerings across the entire customer base, and provide incentives to employees based on the success of the organization as a whole. Although certain information regarding selected products or services is discussed for purposes of promoting an understanding of the Company’s business, the chief operating decision maker manages the Company and allocates resources at the consolidated level.
Reclassifications
Certain amounts in the prior year consolidated financial statements have been reclassified to conform to the current year presentation. These reclassification adjustments had no effect on the Company’s previously reported net loss.
Note 4 – Fair Value Measurements
The carrying value and fair value of the Company’s financial instruments are as follows:
Schedule of Carrying Value and Fair Value
| June 30, 2023 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Liabilities | ||||||||||||||||
| Warrant liabilities | $ | $ | $ | $ | ||||||||||||
| As of December 31, 2022 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Liabilities | ||||||||||||||||
| Warrant liabilities | $ | $ | $ | $ | ||||||||||||
The fair value of the warrants outstanding was estimated using the Black-Scholes model. The application of the Black-Scholes model requires the use of a number of inputs and significant assumptions including volatility. The following reflects the inputs and assumptions used:
Schedule of Fair Value Assumptions
| As of | June 30, 2023 | December 31, 2022 | ||||||
| Stock price | $ | $ | ||||||
| Exercise price | $ | $ | ||||||
| Remaining term (in years) | ||||||||
| Volatility | % | % | ||||||
| Risk-free rate | % | % | ||||||
| Expected dividend yield | % | % | ||||||
The warrant liabilities will be remeasured at each reporting period with changes in fair value recorded in other income (expense), net on the consolidated statements of operations. The change in fair value of the warrant liabilities was as follows:
Schedule of Changes in Fair Value of the Warrant Liabilities
| Warrant liabilities | ||||
| Estimated fair value at December 31, 2021 | $ | |||
| Issuance of warrant liabilities | ||||
| Change in fair value | ( | ) | ||
| Estimated fair value at June 30, 2022 | $ | |||
| Estimated fair value at December 31, 2022 | $ | |||
| Change in fair value | ( | ) | ||
| Estimated fair value at June 30, 2023 | $ |
| 10 |
Can B̅ Corp. and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2023
Note 5 – Inventories
Inventories consist of:
Schedule of Inventories
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Raw materials | $ | $ | ||||||
| Finished goods | ||||||||
| Total | $ | $ | ||||||
Note 6 – Property and Equipment
Property and equipment consist of:
Schedule of Property And Equipment
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Furniture and fixtures | $ | $ | ||||||
| Office equipment | ||||||||
| Manufacturing equipment | ||||||||
| Medical equipment | ||||||||
| Leasehold improvements | ||||||||
| Total | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Net | $ | $ | ||||||
Depreciation
expense related to property and equipment was $
Note 7 – Intangible Assets
Intangible assets consist of:
Schedule of Intangible Assets
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Technology, IP and patents | $ | $ | ||||||
| Total | ||||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Intangible Assets,Net | $ | $ | ||||||
Amortization
expense was $
| 11 |
Can B̅ Corp. and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2023
Amortization expense for the balance of 2023, and for each of the next five years and thereafter is estimated to be as follows:
Schedule of Estimated Amortization Expenses
| Six months ended December 31, 2023 | $ | |||
| Fiscal year 2024 | ||||
| Fiscal year 2025 | ||||
| Fiscal year 2026 | ||||
| Fiscal year 2027 | ||||
| Thereafter | ||||
| Intangible assets, net | $ |
Note 8 – Notes and Loans Payable
Convertible Promissory Notes
In
December 2020, the Company entered into a convertible promissory note (“ASOP Note I”) with Arena Special Opportunities Partners
I, LP (“ASOP”). The original principal amount of the note was $
In
December 2020, the Company entered into a convertible promissory note (“ASOF Note I”) with Arena Special Opportunities Fund,
LP (“ASOF”). The original principal amount of the note was $
In
May 2021, the Company entered into a convertible promissory note (“ASOP Note II”) with Arena Special Opportunities Partners
I, LP. The original principal amount of the note was $
In
May 2021, the Company entered into a convertible promissory note (“ASOF Note II”) with Arena Special Opportunities Fund,
LP. The original principal amount of the note was $
The
maturity dates for the above notes were extended to April 30, 2022 on April 14, 2022 in exchange for the Company’s promise to pay
the holders $
| 12 |
Can B̅ Corp. and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2023
On
January 1, 2022, the Company entered into a convertible promissory note (“Empire Note”) with Empire Properties, LLC (“Empire”).
The original principal amount of the note was $
In
March 2022, the Company entered into a convertible promissory note (“BL Note”) with Blue Lake Partners, LLC
(“BL”). The original principal amount of the note was $
In
March 2022, the Company entered into a convertible promissory note (“MH Note”) with Mast Hill Fund, LP
(“MH”). The original principal amount of the note was $
In
April 2022, the Company entered into a convertible promissory note (“FM Note”) with Fourth Man, LLC (“FM”).
The original principal amount of the note was $
| 13 |
Can B̅ Corp. and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2023
In
June 2022, the Company entered into a convertible promissory note (“Alumni Note”) with Alumni Capital, LP (“Alumni”).
The original principal amount of the note was $
In
August 2022, the Company entered into a convertible promissory note (“WN”) with Walleye Opportunities Master Fund Ltd. (“WOMF”).
The original principal amount of the note was $
In
January 2023 the Company entered into a convertible promissory note (“Tysadco Note VI”) with Tysadco Partners, LLC (“Tysadco”).
The original principal amount of the note was $
On
March 2, 2023, the Company completed the sale of a promissory note (the “Note”) in the principal amount of $
The
Note is payable in nine (9) monthly installments of $
| 14 |
Can B̅ Corp. and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2023
The Note requires the Company to use reasonable commercial efforts to complete an offering which will result in an uplisting of its common stock to a national securities exchange within a reasonable time following the issuance of the Note. The Note contains certain negative covenants, including a prohibition on the incurrence of debt that is senior or pari passu to the indebtedness represented by the Note, the creation of liens on the Company’s assets, the payment of dividends and other distributions on the Company’s common stock, the repurchase of the Company’s common stock, the sale of a significant portion of the Company’s assets and the repayment of indebtedness other than existing indebtedness.
The
Company may elect to pay all or a portion of a monthly installment due under the Note by converting such amount into shares of the Company’s
common stock at a price of $
If the Company receives cash proceeds from any source, including payments from customers or from the issuance of equity or debt, WOMF can require the Company to apply 100% of such proceeds to the repayment of the Note.
If the Company completes a placement of securities, WOMF will have the right to accept such new securities in lieu of the Note and Warrant. For so long as the Note is outstanding, if the Company issues a security or amends the terms of a security issued before the issue date of the Note, and WOMF believes that terms of the new or amended security are more favorable to the holder than the terms provided to WOMF, WOMF may require that such terms become part of WOMF’s transaction documents with the Company.
In
the event of a default under the Note, the Company shall be required to pay WOMF an amount equal to the amount determined by multiplying
the principal amount then outstanding plus default interest by
WOMF has been granted a right of first refusal to participate in future financing transactions conducted by the Company.
As
additional consideration for the purchase of the Note, the Company issued WOMF a warrant (the “Warrant”) to purchase
shares of the Company’s common stock at an exercise price equal to 90% of the lowest volume weighted average price of the common
stock during the five trading days preceding the date of exercise. The Warrant contains a cashless exercise provision and is exercisable
at any time during the period beginning on August 27, 2023 and ending on August 27, 2028. In addition, a warrant issued by the Company
to WOMF in August 2022 was amended to change the exercise price of the warrant from $
The Company has entered into a Registration Rights Agreement with WOMF pursuant to which the Company has agreed to file a registration statement with the Securities and Exchange Commission to register the shares of common stock issuable upon the conversion of the Note and the exercise of the Warrant for public resale. The Company filed the registration statement on May 12, 2023 and it was declared effective on May 22, 2023. WOMF has also been granted piggyback registration rights with respect to the shares of common stock issuable upon the conversion of the Note and the exercise of the Warrant. Each of the Note and Warrant grants full ratchet anti-dilution protection to WOMF in the event that the Company issues common stock or rights to purchase common stock at a price less than the conversion or exercise price then in effect.
In
May 2023, the Company issued a promissory note to WOMF in the principal amount of $
| 15 |
Can B̅ Corp. and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2023
Forbearance and Amendment of Outstanding Notes.
Contemporaneous
with the sale of the Note and Warrant to WOMF, ASOP and ASOF (collectively, “Arena”), who hold promissory notes with an unpaid
principal balance of approximately $
The
Forbearance Agreement requires the Company and/or Company’s subsidiaries, Duramed, Inc. and Duramed MI, LLC (together the “Duramed
Subsidiaries”) to remit to Arena on a monthly basis certain accounts receivable collected by the Company and/or the Duramed
Subsidiaries until the total amount collected is $
If
Arena fully exercises warrants to purchase shares of the Company’s common stock that were previously issued to it, and the aggregate
market value of the shares acquired is less than $
As a condition to the closing of the sale of the Note and Warrant to the WOMF, certain terms of certain promissory notes previously issued by the Company were amended, including the following:
| ● | in
consideration of an increase in the aggregate principal amount by $ | |
| ● | in
consideration of the Company’s agreement to provide a product credit for future orders of $ | |
| ● | the
maturity date of a promissory note in the principal amount of $ | |
| ● | in
consideration of the repayment of a total of $ |
TWS Note
On
August 12, 2021, pursuant to an Equipment Acquisition Agreement, the Company entered into a twelve-month promissory note of $
Other Loans
On
November 18, 2021, the Company entered into a $
| 16 |
Can B̅ Corp. and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2023
During
the year ended December 31, 2022, the Company entered into various agreements relating to the sales of future receivables for an aggregate
purchase amount of approximately $
On
February 11, 2022, the Company entered into a $
On
August 18, 2022, the Company entered into a $
On
October 14, 2022, the Company entered into a $
On
October 14, 2022, the Company entered into a $
On
November 17, 2022, the Company entered into a $
Note 9 – Stockholders’ Equity
Preferred Stock
| 17 |
Can B̅ Corp. and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2023
Each share of Series C Preferred Stock has preference to payment of dividends, if and when declared by the Company, compared to shares of the Company’s common stock. Each Preferred Series C share is convertible into shares of common stock. The shares of Series C Preferred Stock have voting rights as if fully converted.
On
February 8, 2021, the Company’s Board of Directors approved the designation of the Series D Preferred Shares and the number of
shares constituting such series, and the rights, powers, preferences, privileges and restrictions relating to such series. On March 27,
2021, the Company filed an amendment to its articles of incorporation to authorize shares of a new Series D Preferred Stock with
a par value of $ each. All Series D Preferred Shares rank senior to all shares of Common Stock of the Company with respect to liquidation
preferences and rank pari passu to all current and future series of preferred stock, unless otherwise stated in the certificate
of designation for such preferred stock.
| 18 |
Can B̅ Corp. and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2023
Summary of Stock Option Activity
| Option Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | |||||||||||
| Outstanding, January 1, 2023 | $ | ||||||||||||
| Granted | - | - | - | ||||||||||
| Exercised | - | - | - | ||||||||||
| Forfeited | - | - | - | ||||||||||
| Expired | - | - | - | ||||||||||
| Outstanding, June 30, 2023 | $ | ||||||||||||
There was Stock-based compensation expense related to stock options during the six months ended June 30, 2023. Stock-based compensation expense related to stock options during the six months ended June 30, 2022 was $.
Note 11 – Income Taxes
The Company’s income tax provisions for the three and six months ended June 30, 2023 and 2022 reflect the Company’s estimates of the effective rates expected to be applicable for the respective full years, adjusted for any discrete events, which are recorded in the period that they occur. These estimates are reevaluated each quarter based on the Company’s estimated tax expense for the full year. The estimated effective tax rate includes the impact of valuation allowances in various jurisdictions.
Note 12 – Related Party Transactions
For
the six months ended June 30, 2022, the Company incurred fees to a service provider that is a relative of a director for professional
services in the amount of $
Note 13 – Commitments and Contingencies
Lease Agreements
The Company leases office space in numerous medical facilities offices under month-to-month agreements.
Rent
expense for the six months ended June 30, 2023 and 2022 was $
At June 30, 2023, the future minimum lease payments under non-cancellable operating leases were:
Schedule of Future maturities of Lease Liabilities
| Six months ended December 31, 2023 | $ | |||
| Fiscal year 2024 | ||||
| Total future Lease Payment | $ |
Note 14 – Subsequent Events
The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the condensed consolidated financial statements are issued and as of that date. There were no subsequent events that required adjustment or disclosure in the consolidated financial statements except as follows:
The
Company formed Nascent Pharma, LLC in July 2023 to acquire and exploit certain patents. The Company has a
In
July 2023, the Company purchased
In July 2023, the Company issued shares of common stock upon the conversion of a portion of the WOMF Note.
In July 2023, Ronald Silver resigned as a member of the Company’s Board of Directors.
| 19 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Can B̅ Corp. was originally incorporated as WrapMail, Inc. (“WRAP”) in Florida on October 11, 2005. On May 15, 2017, WRAP changed its name to Canbiola, Inc. On January 16, 2020 Canbiola, Inc. changed its name to Can B̅ Corp.
The Company acquired 100% of the membership interests in Pure Health Products, LLC, a New York limited liability company (“PHP” or “Pure Health Products”) effective December 28, 2018. The Company runs it manufacturing operations through PHP and holds and sells several of its brands through PHP as well. The Company’s durable equipment products, such as sam® units with and without CBD infused pads, are marketed and sold through its wholly-owned subsidiaries, Duramed Inc. (incorporated on November 29, 2018) and Duramed MI LLC (fka DuramedNJ, LLC) (incorporated on May 29, 2019) (collectively, “Duramed”). Duramed began operating on or about February 1, 2019. Most of the Company’s consumer products include hemp derived cannabidiol (“CBD”); however, the Company has just recently begun extracting cannabinol (“CBN”) and cannabigerol (“CBG”) for wholesale to third-parties looking to incorporate such compounds into their products through its wholly owned subsidiaries, Botanical Biotech, LLC (incorporated March 10, 2021) and TN Botanicals LLC and CO Botanicals LLC (both incorporated in August 2021). The three subsidiaries have also begun synthesizing Delta-8 and Delta-10 from hemp. Delta-8 can produce similar, though less potent, effects as delta-9 (commonly referred to as THC); however, the legality of hemp derived delta-8 is in a gray area.
The Company is in the business of promoting health and wellness through its development, manufacture and sale of products containing cannabinoids derived from hemp biomass and the licensing of durable medical devises. Can B̅’s products include oils, creams, moisturizers, isolate, gel caps, spa products, and concentrates and lifestyle products. Can B̅ develops its own line of proprietary products as well seeks synergistic value through acquisitions in the hemp industry. Can B̅ aims to be the premier provider of the highest quality hemp derived products on the market through sourcing the best raw material and offering a variety of products we believe will improve people’s lives in a variety of areas.
After careful consideration and analysis of the economics, supply chain, processing logistics, and management of manpower the Company decided to consolidate operations in its CO operations in Mead and Ft. Morgan. The company remains fully vertically integrated in legal hemp operations and sales with processing of hemp biomass and crude hemp oil into distillate, isolate, and ultimately into isomers. The Company moved all of its help processing equipment previously located in its Miami, FL operation under Botanical Biotech, LLC to its main hemp processing center in CO. The Company also terminated its lease with the Miami landlord. The Company moved all of the hemp processing equipment previously located in its McMinnville, TN operation under TN Botanicals, LLC to its main hemp processing center in CO.
As a result of these equipment moves, the Colorado operation will, once fully operational, improve operating efficiencies, increase management oversight, and be able to increase throughput by double verse the prior three independent operating facilities. The Company expects to have the consolidated operation fully operational by the end of fiscal 2022. Senior management of the Company will be on-site in CO during this consolidation period to ensure maximum efficiencies and continue operations during this rebuilding period. Immediate impact of the consolidation is elimination of duplicate lines, better coordination of customer orders, reduction in transportation charges, and manpower efficiencies with larger batch sizes and reduced personnel.
The consolidated financial statements include the accounts of CANB and its operational wholly owned subsidiaries.
Results of Operations
Three months ended June 30, 2023 compared to three months ended June 30, 2022.
Revenues decreased $850,409 from $1,271,002 in 2022 to $420,593 in 2023. The decrease is due to the normalization of sales activity with 2022 positively impacted by the wind down of restrictions related to the Covid-19 Pandemic surrounding elective surgeries, enabling an increase in the usage of the Company’s Duramed product lines and ultrasound device associated with patient recovery.
Cost of product sales decreased $96,392 from $1,030,817 in 2022 to $934,425 in 2023 due to the decrease in sales as noted above.
Operating expenses decreased $491,014 from $1,798,794 in 2022 to $1,307,780 and net loss increased $381,127 from $1,645,886 in 2022 to $2,027,013 in 2023 as a result of decrease in revenue offset by a consulting fees, rent and other operating expenses.
Six months ended June 30, 2023 compared to three months ended June 30, 2022.
Revenues decreased $1,771,424 from $3,131,322 in 2022 to $1,359,898 in 2023. The decrease is due to the normalization of sales activity with 2022 positively impacted by the wind down of restrictions related to the Covid-19 Pandemic surrounding elective surgeries, enabling an increase in the usage of the Company’s Duramed product lines and ultrasound device associated with patient recovery.
Cost of product sales decreased $762,145 from $2,221,147 in 2022 to $1,459,002 in 2023 due to the decrease in sales as noted above.
Operating expenses decreased $2,503,381 from $5,660,791 in 2022 to $3,256,514 and net loss decreased $1,364,733 from $5,130,783 in 2022 to $3,766,050 in 2023 as a result of decrease in revenue offset by a consulting fees, rent and other operating expenses.
| 20 |
Liquidity and Capital Resources
At June 30, 2023, the Company had cash and cash equivalents of $123,445 and negative working capital of $5,295,361. Cash and cash equivalents increased $50,251 from $73,194 at December 31, 2022 to $123,445 at June 30, 2023. For the six months ended June 30, 2023, $1,384,557 was provided by financing activities, $1,249,307 was used in operating activities, and $85,000 was used in investing activities.
The Company currently has no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.
We have no off-balance sheet arrangements.
The Company has $9.9 million aggregate principal amount of notes becoming due between September 1, 2023 and December 31, 2023. The Company plans to seek additional extensions of these notes or refinance the indebtedness. No assurance can be given that the Company will be successful in obtaining extensions or refinancing the indebtedness.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
None.
ITEM 4. CONTROLS AND PROCEDURES
(A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
As of June 30, 2023, our principal executive officer and principal financial officer conducted an evaluation regarding the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act). Based upon the evaluation of these controls and procedures, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report.
(B) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting in our fiscal quarter for the period June 30, 2023 covered by this Quarterly Report on Form 10-Q, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.
PART II- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On April 28, 2021, the Company was served with a commercial legal action against the Company and certain officers by David Weissberg and Donna Marino, who are investors in the Company (collectively, the “Investors”). The complaint was filed in the Supreme Court of the State of New York, County of Nassau, Index No. 605191/2021. The complaint alleges four causes of action.
The first cause of action alleges that the Company breached Securities Purchase Agreements with the Investors by failing to assist the Investors in getting opinion letters to remove the restrictive legends from their shares, even though the Company made introductions and requests to the Company’s counsel, provided supporting documents for the Investor’s shares, and ultimately the opinion letters could not be rendered because the Investors failed to submit required documentation to counsel.
The second cause of action is similar to the first but related to alleged misrepresentations regarding removing the restrictive legends from shares that were issued for services rather than purchased.
The third cause of action alleges that the Company mislead the Investors to invest $500,000. The final cause of action alleges that officers of the Company made misrepresentations regarding the value of the Company’s stock, which caused David Weissberg to owe more in taxes than he was expecting.
On or about November 24, 2021, a vendor of the Company filed amended suit against the Company in Florida, Case No. 2021 CA 001797, for monies allegedly owed and civil theft relating to such monies and related products and fraud in the inducement. We do not believe we owe such vendor any amount. The court has entered a default judgement against the Company for our failure to timely answer the complaint, which default has since been overturned. Subsequently the case has been set for interrogatories and document production which activities are being fulfilled.
On or about August 11, 2022, a Complaint was filed by Evexia Plus, LLC against Can B Corp. in a product payment trade dispute. Case Number 63-CV-2022-900692.00 in the Circuit Court of Tuscaloosa County, AL. On 1-26-2023 the court ordered a Summary Judgement in the amount of $336,924. The parties are trying to work out a payment schedule tied to production to satisfy the judgement.
In March 2023, the holder of a note in the principal amount of $250,000 instituted a collection action against the Company in the Circuit Court of the 11th Judicial District in and for Miami-Dade County, Florida. seeking payment of the principal amount and accrued interest.
| 21 |
Other than above, we are not aware of any pending or threatened legal proceedings in which we are involved.
ITEM 1A. RISK FACTORS
During the three months ended June 30, 2023, the Company issued There have been no material changes to the risk factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on April 17, 2023.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
In May 2023, the Company issued 100,000 shares of common stock for services rendered. The Company relied upon the exemption provided by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), in connection with this issuance.
In May 2023, the Company issued 50,000 shares of common stock to a creditor in consideration for the creditor’s agreement to forbear from exercising remedies against the Company. The Company relied upon the exemption provided by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), in connection with this issuance.
In May 2023, the Company issued 125,000 shares of common stock in payment of the purchase price for certain equipment. The Company relied upon the exemption provided by Section 4(2) of the Securities Act in connection with this issuance.
In June 2023, the Company issued 65,638 shares of common stock upon the conversion of a convertible note. The Company relied upon the exemption provided by Section 3(a)(9) of the Securities Act in connection with this issuance.
In June 2023, a shareholder agreed to the cancellation of 40,000 shares of common stock in connection with a resolution of a dispute with respect to a conversion of a note.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
The Company formed Nascent Pharma, LLC in July 2023 to acquire and exploit certain patents. The Company has a 67% interest in Nascent Pharma, LLC.
In July 2023, the Company purchased 1,800,000 pounds of biomass that is ready for immediate processing. The Company issued 450,000 shares of its common stock (subject to potential adjustment) in payment of the purchase price for the biomass.
In July 2023, Ronald Silver resigned as a member of the Company’s Board of Directors. Senator Silver’s resignation was not the result of any dispute with the Company.
ITEM 6. EXHIBITS
The following exhibits are filed with this offering circular:
| 22 |
| 23 |
| (1) | Filed with the Annual Report on Form 10-K filed with the SEC on April 2, 2020 and incorporated herein by reference. |
| (2) | Filed with the Form S-1 Registration Statement filed with the SEC on December 2, 2015 and incorporated herein by reference. |
| (3) | Filed with the Current Report on Form 8-K filed with the SEC on January 30, 2019 and incorporated herein by reference. |
| (4) | Filed with the Current Report on Form 8-K filed with the SEC on December 6, 2019 and incorporated herein by reference. |
| (5) | Filed with the Current Report on Form 8-K filed with the SEC on February 18, 2020 and incorporated herein by reference. |
| (6) | Filed with the Current Report on Form 8-K filed with the SEC on January 15, 2019 and incorporated herein by reference. |
| (7) | Filed with the Form 1-A/A, Part II, filed with the SEC on July 17, 2020 and incorporated herein by reference. |
| (8) | Filed with the Form 1-A POS, Part II, filed with the SEC on September 11, 2020 and incorporated herein by reference. |
| (9) | Filed with the Current Report on Form 8-K filed with the SEC on November 23, 2020 and incorporated herein by reference. |
| (10) | Filed with the Annual Report on Form 10-K filed with the SEC on April 15, 2022 and incorporated herein by reference. |
| (11) | Filed with the Quarterly Report on Form 10-Q filed with the SEC on May 21, 2021 and incorporated herein by reference. |
| (12) | Filed with the Current Report on Form 8-K filed with the SEC on August 17, 2021 and incorporated herein by reference. |
| (13) | Filed with the Current Report on Form 8-K filed with the SEC on September 1, 2021 and incorporated herein by reference. |
| (14) | Filed with the Current Report on Form 8-K filed with the SEC on March 31, 2022 and incorporated herein by reference. |
| (15) | Filed with the Form 10-K filed with the SEC on April 15, 2022 and incorporated herein by reference. |
| (16) | Filed with the Current Report on Form 8-K filed with the SEC on April 29, 2022 and incorporated herein by reference. |
| (17) | Filed with Form S-1/A filed with the SEC on February 14, 2022 and incorporated herein by reference. |
| (18) | Filed with Form S-1/A filed with the SEC on May 25, 2022 and incorporated herein by reference. |
| (19) | Filed with the Current Report on Form 8-K filed with the SEC on June 15, 2022 and incorporated herein by reference. |
| (20) | Filed with Form S-1/A filed with the SEC on June 30, 2022 and incorporated herein by reference. |
| (21) | Filed with the Current Report on Form 8-K filed with the SEC on July 25, 2022 and incorporated herein by reference. |
| (22) | Filed with the Annual Report on Form 10-K filed with the SEC on April 17, 2023 and incorporated herein by reference. |
| 24 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Can B Corp. | ||
| Date: August 21, 2023 | By: | /s/ Marco Alfonsi |
| Marco Alfonsi, | ||
| Chief Executive Officer | ||
| Date: August 21, 2023 | By: | /s/ Stanley L. Teeple |
| Stanley L. Teeple, | ||
| Chief Financial Officer | ||
| 25 |
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Marco Alfonsi, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Can B Corp.
2. Based on my knowledge, this report does not contain any untrue statement of a 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 controls 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 quarterly 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; | |
| 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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; |
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 controls 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 over financial reporting. |
| Dated: August 21, 2023 | By: | /s/ Marco Alfonsi |
| Marco Alfonsi, | ||
| Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Stanley L. Teeple, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Can B Corp.;
2. Based on my knowledge, this report does not contain any untrue statement of a 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 controls 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 quarterly 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; | |
| 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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; |
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 controls 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 over financial reporting. |
| Dated: August 21, 2023 | By: | /s/ Stanley L. Teeple |
| Stanley L. Teeple, | ||
| 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 Can B Corp. (the “Company”) on Form 10-Q for the period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Marco Alfonsi, Chief Executive Officer of the Company, certifies, pursuant to 18 U.S.C. section 1350 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 21, 2023 | By: | /s/ Marco Alfonsi |
| Marco Alfonsi | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement 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.
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 Can B Corp. (the “Company”) on Form 10-Q for the period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Marco Alfonsi, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350 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 21, 2023 | By: | /s/ Stanley L. Teeple |
| Stanley L. Teeple, | ||
| Chief Financial Officer | ||
| (Principal Financial Officer) |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement 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.