UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31 2018, 2021

OR

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

For the Transition Period From ____________ to ____________

Commission File Number:333-208293000-55753

CANBIOLA, INC.Can B̅ Corp.

(f/k/a Canbiola, Inc.)

(Exact name of registrant as specified in its charter)

Florida20-3624118

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

960 South Broadway, Suite 120, HicksvilleNY11801,

(Address of principal executive offices)

516-595-9544516-595-9544

Registrant’s telephone number, including area code:

None

Securities Registered Pursuant to Section 12(b) of the Act:

Tile of each classTrading Symbol(s)Name of each exchange on which registered
NoneCANBN/A

Common Stock, par value $0.001 per share

Securities Registered Pursuant to Section 12(g) of the Act:

Common Stock, Nil par value per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [  ] No [X]

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. Yes [X] 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter timeperiod that the registrant was required to submit and post such files). Yes [X] No [  ]

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.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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. (Check one):

Large accelerated filer[  ]Accelerated filer[  ]
Non-accelerated filer[  ] (Do not check if a smaller reporting company)Smaller reporting company[X]
Emerging Growth Company [X]

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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

The aggregate market value of voting stock held by non-affiliates of the registrant on June 30, 2018,December 31, 2021, was $4,466,469, $13,502,693 based on the last reported sale price of the registrant’s Common Stock on the OTC Markets on that date.

As of April 12, 2019,13, 2022, the registrant had outstanding 548,487,7143,325,814 shares of common stock, $0.00 par value per share.

 

 

 

EXPLANATORY NOTE

Canbiola, Inc. (the “Company”) inadvertently provided an incorrect contact phone number in its Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (the “Original Filing”) and did not include interactive data (aka XBRL’s) for the Original Filing. This Amendment No. 1 on Form 10-K (“Amendment No. 1”) is being filed solely to include the Company’s interactive data and to amend the Company’s phone number.Can B̅ Corp.

CANBIOLA, INC.

20172019 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

 

Item No.DescriptionPage
Cautionary Note Regarding Forward-Looking Statements3
PART I
Item 1.Business.54
Item 1A.Risk Factors.87
Item 1B.Unresolved Staff Comments.87
Item 2.Properties.8
Item 3.Legal Proceedings.8
Item 4.Mine Safety Disclosures.89
PART II
Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.89
Item 6.Selected Financial Data.1012
Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations.1112
Item 7A.Quantitative and Qualitative Disclosures About Market Risk.1213
Item 8.Financial Statements and Supplementary Data.1213
Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.1214
Item 9A.Controls and Procedures.1213
Item 9B.Other Information.1314
PART III
Item 10.Directors, Executive Officers and Corporate Governance.1314
Item 11.Executive Compensation.1517
Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.1619
Item 13.Certain Relationships and Related Transactions, and Director Independence.1820
Item 14.Principal Accounting Fees and Services.1820
PART IV
Item 15.Exhibits, Financial Statement Schedules.1921
Signatures2024

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained or incorporated by reference in this Annual Report on Form 10-K are considered forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) concerning our business, results of operations, economic performance and/or financial condition, based on management’s current expectations, plans, estimates, assumptions and projections. Forward-looking statements are included, for example, in the discussions about:

strategy;
new product discovery and development;
current or pending clinical trials;
our products’ ability to demonstrate efficacy or an acceptable safety profile;
actions by regulatory authorities;
product manufacturing, including our arrangements with third-party suppliers;
product introduction and sales;
royalties and contract revenues;
expenses and net income;
credit and foreign exchange risk management;
liquidity;
asset and liability risk management;
the outcome of litigation and other proceedings;
intellectual property rights and protection;
economic factors;
competition; and
legal risks.

Any statements contained in this report that are not statements of historical fact may be deemed forward-looking statements. Forward-looking statements generally are identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates,” “aims,” “plans,” “may,” “could,” “will,” “will continue,” “seeks,” “should,” “predict,” “potential,” “outlook,” “guidance,” “target,” “forecast,” “probable,” “possible” or the negative of such terms and similar expressions. Forward-looking statements are subject to change and may be affected by risks and uncertainties, most of which are difficult to predict and are generally beyond our control. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update any forward-looking statement in light of new information or future events, except as required by law, although we intend to continue to meet our ongoing disclosure obligations under the U.S. securities laws and other applicable laws.

We caution you that a number of important factors could cause actual results or outcomes to differ materially from those expressed in, or implied by, the forward-looking statements, and therefore you should not place too much reliance on them. These factors include, among others, those described herein, under “Risk Factors” and elsewhere in this Annual Report and in our other public reports filed with the Securities and Exchange Commission. It is not possible to predict or identify all such factors, and therefore the factors that are noted are not intended to be a complete discussion of all potential risks or uncertainties that may affect forward-looking statements. If these or other risks and uncertainties materialize, or if the assumptions underlying any of the forward-looking statements prove incorrect, our actual performance and future actions may be materially different from those expressed in, or implied by, such forward-looking statements. We can offer no assurance that our estimates or expectations will prove accurate or that we will be able to achieve our strategic and operational goals.

Forward-looking statements are based on information we have when those statements are made or management’s good faith belief as of that time with respect to future events and are subject to significant risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.

Moreover, new risks regularly emerge, and it is not possible for our management to predict or articulate all risks we face, nor can we assess the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from those contained in any forward-looking statements. All forward-looking statements included in this prospectus are based on information available to us on the date of this Annual Report. Except to the extent required by applicable laws or rules, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained above and throughout this Annual Report.

JUMPSTART OUR BUSINESS STARTUPS ACT

We qualify as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we do not have more than $1,000,000,000 in annual gross revenue and did not have such amount as of December 31, 2018, the last day of our last fiscal year. We are electing to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.

As an emerging growth company, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:

being permitted to present only two years of audited financial statements and only two years of related “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this annual report;
not being requested to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley Act”);
reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and
exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We will remain an emerging growth company until the earliest to occur of: (i) our reporting $1 billion or more in annual gross revenues; (ii) the end of fiscal year 2019; (iii) our issuance, in a three year period, of more than $1 billion in non-convertible debt; and (iv) the end of the fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million on the last business day of our second fiscal quarter.

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PART I

Item 1.Business

Company OverviewOrganization

Canbiola, Inc. wasWe were originally incorporated as WrapMail, Inc. (“WRAP”) in Florida on October 11, 2005 in order to tap into a largely un-serviced segment of the web-based advertising industry. Effective December 27, 2010, WRAP effected a 10 for 1 forward stock split of its common stock. Effective June 4, 2013, WRAP effected a 1 for 10 reverse stock split of its common stock. The accompanying consolidated financial statements retroactively reflect these stock splits.

Effective January 5, 2015, WRAP acquired 100% ownership of Prosperity Systems, Inc. (“Prosperity”), a New York corporation incorporated on April 2, 2008, in order to acquire Prosperity’s office productivity software suite as a complement to WRAP’s existing intellectual property. After its acquisition, the Company transferred Prosperity’s operations to WRAP; however, the Company does not currently actively operate its WRAP and is presently in the process of dissolving Prosperity. For the periods presented, the assets, liabilities, revenues, and expenses are those of the Company.or Prosperity had no activity for the periods presented.divisions pending decision on whether to hold on to, sell or repurpose such assets.

Around the first quarter of 2017, the Company began to transition into the Hemp CBD industryhealth and wellness space, including the development, processing and sale of hemp derived products, and now primarily offers healthoperates three distinct divisions: retail sales, R&D and beauty productsmanufacturing, and supplements containing CBD. durable medical devices. The Company also has a hemp cultivation division which is currently non-operational.

On May 15, 2017, WRAP changed its name to Canbiola, Inc. (the “Company” or “CANB” or “Canbiola”) to reflect its transition. On March 6, 2020 CANB changed its name to “Can B̅ Corp.” in order to segregate its corporate identity from its lead products branded under the Canbiola™ brand.

BusinessEffective December 27, 2010, WRAP effected a 10 for 1 forward stock split of its common stock. Effective June 4, 2013, WRAP effected a 1 for 10 reverse stock split of its common stock. On March 6, 2020, Can B̅ effected a 1 for 300 reverse stock split of its common stock. The accompanying consolidated financial statements retroactively reflect these stock splits. On March 13, 2022, the Company effectuated a 1 for 15 reverse split of its stock.

Business Segments

The Company’s primaryCompany is in the business is theof promoting health and wellness through its development, productionmanufacture and sale of products and delivery devices containing CBD. The Company’s products contain CBDcannabinoids derived from hemp biomass and the licensing of durable medical devises.

Hemp is thought to contain anywhere from 60 to over 100 naturally occurring compounds (cannabinoids) thought to interact with cannabinoid receptors present on the surface of cells in various parts of the central nervous system. The effects of cannabinoids are thought to depend on the area of the brain involved. Cannabidiol (“CBD”) is probably one of the most well-known of these compounds, thought to have many beneficial uses. CBD is incorporated into many of the Company’s products; however, the Company has recently begun extracting and include products such as oils, creams, moisturizers, isolate,processing cannabinol (“CBN”), cannabigerol (“CBG”), delta-10 and gel caps. In addition to offering white labeled products, Canbiola has developeddelta-8 for its own line of proprietary products, as well as seeking synergistic value through acquisitions of products and brands in the Hemp industry. Canbiolafor wholesale to third-parties looking to incorporate such compounds into their products. The Company has all of its hemp based raw materials to incorporate into products tested by a 3rd party independent laboratory. The Company aims to be the premier provider of the highest quality natural Hemp CBDhemp cannabinoid products on the market through sourcing the very best raw material and developing a variety of products we believeit believes will improve people’s lives in a variety of areas.

“CBD” Business

I-Pure Health Products

Cannabidiol (“CBD”) is one of nearly 85 naturally occurring compounds (cannabinoids) found in industrial hemp (it is also contained in marijuana, but the Company’s products are derived only from hemp). CBD is non-psychoactive and is thought to have numerous uses, including, but not limited to, for pain, insomnia, epilepsy, anxiety, inflammation, and nausea. Unlike CBD derived from marijuana, CBD derived from the seeds and stalks of industrial hemp is generally considered “legal” in the U.S. so long as it contains less than 0.3% of “THC,” another, but psychoactive, cannabinoid found in cannabis. This purported “legal status” is because the 2018 Farm Bill removed hemp as a Schedule I drug under the Controlled Substances Act and hemp may now be grown as a commodity crop, with restrictions; however, the 2018 Farm Bill did not specifically legalize CBD. Until Congress promulgates rules and regulations relating to hemp derived CBD under the 2018 Farm Bill, the “legal” status of CBD from hemp, or the processes the Company may have to implement (and at what expense), are still unknowns. A similar paradigm exists under various state laws with which the Company will have to comply. In any case, CBD derived from marijuana, marijuana and other marijuana derivatives are federally illegal in the U.S. under the Controlled Substances Act, despite being medically or recreationally legal in numerous states, which is why the Company has established procedures to ensure that its CBD is derived from hemp in compliance with the Farm Bill.The Company has all of its hemp based raw materials (isolate) tested by a 3tf party independent laboratory and those results are posted on the Company web site.

In order to facilitate its operations, the Company has (and will) form or acquire a number of subsidiaries. Its goal is to eventually operate a vertically integrated hemp conglomerate that has operations spanning from seed to sale. Currently, the Company’s primary focus is the development, sale and manufacture of CBD products. The Company’s products are marketed under the tradename “Canbiola.,” and sold via its website and through doctors and other medical professionals with which the Company enters into distribution agreements. The Company also manufactures and/or sells separately branded CBD products through its subsidiaries and websites for “Pure Leaf Oil” brand and “Seven Chakras” brand.

In December, 2018, the Company acquired 100% of the membership interests in Pure Health Products, LLC, a New York limited liability company (“PHP” or “Pure Health Products”), is the Company’s manufacturing arm. PHP manufactures all of the Company’s CBD products and also provides white label manufacturing and production services to third parties and performs research and development for the Company. Through PHP, the Company is able to control the manufacturing process of its products while reducing its production costs. Pasquale Ferro is the president of PHP.

In December, 2018, the Company acquired 100% of the membership interests in Pure Health Products, with which it had had and has an exclusive production agreement, pursuant to an Acquisition Agreement (“PHP Acquisition Agreement”). PHP manufactures and packages the Company’s CBD infused products. PHP may also white label / rebrand or relabel the Company’s products pursuant to “white label agreements” entered into between the Company and/or PHP and third-party customers. Through PHP, the Company is able to control the manufacturing process of its products while reducing its production costs. In January, 2019, PHP acquired certain assets from Seven Chakras, LLC (“Seven Chakras”), a former competitor, which assets included the rights and title to (i) Seven Chakras’ proprietary formulas, methods, trade secrets, and know-how related to the production of Seven Chakras’ CBD products, (ii) Seven Chakras’ tradename, domain name, and social media sites, and (iii) other assets of Seven Chakras including but not limited to raw materials, equipment, packaging and labeling materials, mailing lists, and marketing materials.

4

The Company believes the acquisition ofcurrently has four in-house branded CBD products that are manufactured by PHP and sold to consumers, Canbiola™, Nu Wellness™, Seven Chakra’s assets will bring accretive value and expand the Company’s market base. The Severn Chakras has a customer following in the northwest and compliments the CanbiolaChakras™ and Pure Leaf Oil brands with additional newOil™.

The Company’s Canbiola™ CBD products such asare sold via medical professionals under distribution agreements and directly by the Company via its website and vending machines. The Canbiola™ assets are held directly by the Company and include tinctures, soaps, bath bombs, stress reliefsoaks, cryo-gel, salves, massage oils, powders, capsules and roll-ons.

The Company’s Pure Leaf Oil™ assets are held by PHP. Pure Leaf Oil™ CBD products are sold via PHP’s website, direct to consumer via walk-in business, and lotions.through distributors and are meant for retail customers not referred through the medical community. Pure Leaf Oil™ products include massage oils, joint salves, bath salts, nano sprays, drops, and cryo-gels. PHP also holds the assets related to its Seven ChakrasChakras™ brand. Seven Chakras™ is targeted toward health clubs, spas, and beauty lines and CBD products include lotion, massage oils, roll-ons, isolate, powders, capsules, and bath soaks. Severn Chakras™ has its own internet website and continues in its direct marketingmarkets to its customer base.

PHP has also created a new brand, Nu Wellness™, which it intends to market through distributors as an independent pharmacy brand targeted towards independent retail drug stores. Nu Wellness™ has yet to launch or make sales, which are intended to occur sometime in 2022.

All finished products are stored for time- quality measurement, and each batch of every product is sent to an independent third-party lab for a Certificate of Analysis (“COA”) of the finished products. These COA’s are both listed on our web site and available via the QR code on every retail package.

II-Hemp Operating Division

The Company’s hemp operating division performs R&D for the Company including for CBN, CBG, delta-8 and delta-10. It also produces industrial hemp and processes hemp biomass, isolate and isomers.

Around March 17, 2021, the Company acquired assets through its newly-formed, wholly-owned subsidiary, Botanical Biotech, LLC, a Nevada limited liability company (“BB” or “Botanical Biotech”). Such assets include certain materials and manufacturing equipment and marketing or promotional designs, brochures, advertisements, concepts, literature, books, media rights, rights against any other person or entity in respect of any of the foregoing and all other promotional properties, in each case primarily used, developed or acquired by the Sellers for use in connection with the ownership and operation of the BB Assets.

Around August 12, 2021, the Company and CO Botanicals LLC, a Nevada limited liability company and wholly owned subsidiary of CANB (“COB”) acquired hemp processing assets from TWS Pharma, LLC, a Wisconsin limited liability company and L7 TWS Pharma, LLC, a Wisconsin limited liability company. COB operates out of Mead, CO.

Around August 13, 2021 the Company and TN Botanicals LLC, a Nevada limited liability company and wholly owned subsidiary of CANB (“TNB”) acquired assets from Music City Botanicals, LLC, a Wisconsin limited liability company (“MCB”) including certain equipment, inventory, and intellectual property. TNB operates out of Mcminville, TN.

From its Miami lab, the Company processes hemp isolate into isomers such as CBN, CBG, delta-8 and delta-10. At its Tennessee location, the Company produces industrial hemp, processes hemp biomass to isolate, processes isolate to isomers such as CBN, CBG, delta-8 and delta-10, and performs research and development on cannabinoids such as such as CBN, CBG, delta-8, delta-10, CBD and CBDA. At its Colorado facilities, the Company produces industrial hemp and processes hemp biomass to isolate. The biomass and isolate processed by the Company may be produced by the Company or purchased from third parties. All of the Company’s end products contain .3% or less of THC (delta-9).

The Company is also in the process of building out an event/consumption lounge at its Miami lab for showcasing its products and building brand awareness. It is intended that he lounge will attract corporate executives, socialites, influencers and celebrities as a place where they can hang out and sample the Company’s products, including vapes and edibles (each non-THC). The lounge will have 1,500 sqft indoor space and a 1,000 sqft patio. The lounge will have a plug and play surround sound system, 140 inch hi-def 4k bridged TVs and host podcasts, karaoke, and DJ with stage capabilities and will offer bar grub and food truck menus. The Company has also executed a contract with a developer to build and operate additional lounges across the country, subject to certain terms and conditions, including the success of the Miami lounge once open.

III-Durable Medical Equipment

Through its medical device division, Duramed, Inc. (“Duramed”) and Duramed MI LLC, a Nevada limited liability company fka DuramedNJ, LLC (“Duramed MI”), the Company serves the post-surgery medical patient arena aiming to aid in recovery and pain reduction.

5

 

In November 2018, the Company formed Duramed, Inc., a Nevada corporation (“Duramed”) to facilitate the manufacture and sale of durable medical equipment (“DME”) incorporating CBD. On January 14, 2019, Duramed entered into a Memorandum of Understanding (the “Sam MOU”) with Sam International (“Sam”) and ZetrOZ Systems LLC (“ZetrOZ” and, collectively with Sam, the “Manufacturers”). Pursuant to the Sam MOU, the Manufacturers granted Duramed the exclusive right to distribute sam® Pro 2.0 (SA271) and sam® Gel Coupling Patches (UB-14-72) within the United States for the Personal Injury Protection/No Fault Market during the term of the Sam MOU. Duramed has agreed to purchase monthly minimums from the Manufacturers at a price per Unit of $2,447. The exclusivity of the Distribution License granted to Duramed under the Sam MOU iswas dependent upon meeting the monthly minimum.minimum, which did not happen. In addition, Duramed was granted the right to distribute sam® Gel Capture Patches (UB-14-24). Duramed will get rebates of 2%-3% based on the volume of Productsproducts sold by it. The initial term ofWe did not meet the monthly minimums as contemplated by the Sam MOU expires December 31,and as such we are currently distributing the aforementioned products on an at-will, non-exclusive basis.

On May 29, 2019, (the “Initial Term”the Company created Duramed MI to execute the same business strategy into the no-fault insurance market in New Jersey that it had developed in New York; however, Duramed MI is not currently operating in NJ and is in the process of moving its operations to Michigan, which have not begun yet. None of Duramed’s products are reimbursable under any federal program.

IV-Green Grow Farms

Green Grow Farms, Inc., a New York corporation (“GGFI” or “Green Grow”). The agreement contemplated served as the Company’s hemp cultivation arm. Through GGFI, the Company grew its own hemp in New York and partnered with third party growers in other states whereby GGFI provided the farmers with seed and training and splits profits with the farmers. GGFI was to supply the Company with all hemp needed for the Company to produce its CBD products, which hemp would be processed by a third party and shipped to the Company’s production facility in Lacey, WA. Notwithstanding the foregoing, currently, it is less expensive to buy crude oil and isolate than to produce such from hemp grown by the MOUCompany. Accordingly, the Company has stopped its Green Grow operations in favor of buying raw products from third parties. If and when it makes economic sense to grow its own hemp again, the Company will automatically renew forresume Green Grow operations.

V-Imbibe Wellness Solutions

On February 22, 2021, the Company entered into an agreement to purchase additional one-year terms at the end of each calendar year,providedthe monthly minimumsCBD brand assets from Imbibe Health Solutions, LLC, a Delaware limited liability company. The assets have been met. The primary thrustplaced into the Company’s wholly owned subsidiary, Imbibe Wellness Solutions, LLC, a Nevada limited liability company (fka Radical Tactical LLC) (“Imbibe Wellness”), and include the intellectual property rights, including trademarks, logos, know how, formulations, productions procedures, copyrights, social media accounts, domain names and marketing materials relating to the Imbibe™ branded products, including a muscle and joint salve, unscented fizzy bath soak, CALM massage oil, Me x 3 Metabolic Energy (energy and dietary supplement), and Muscle, Joints & Back CBD Cryo Gel. Imbibe Wellness is intended to develop and sell specific celebrity endorsed products and products promoted through influencer branding, which brands are expected to launch in 2022. Walter Hoelzel is the president of the Duramed Division is to market to patients via doctors via a device rental program reimbursable by insurance carriers to help patient with pain reductions and faster healing.Imbibe Wellness.

FDA DISCLAIMER

 

The statements found herein have not been evaluated by the Food and Drug Administration (FDA) and the Company’s products are not intended to diagnose, treat, cure or prevent any disease or medical condition.

Competitive Conditions

The CBD and cannabis markets are flooded with competition ranging from mom and pop operations to multi-million-dollar conglomerates, many with longer operating histories, more capital and/or more industry knowledge than the Company. The Company hopes to partner with or engage industry specialists to help set it apart from its numerous competitors. OneThe Company believes that one of those points of differentiation iswill be its 3rd party independent testing “Certificate of Analysis” conducted on all of the CBD isolate products it purchases and posting of those lab results on its website. The three largest CBD companies known to the Company are Elixinol LLC, a UK based company with $37 million revenue, GW Pharmaceuticals also UK based with $19 million revenue, and Aurora Cannabis based in Canada with just over $19 million revenue. The top USA companies include Medical Marijuana, CV Sciences, Gaia Herbs, and Charlotte’s Web with respective revenues of $59, $48, $45, and $17 million. Worthy of note is that Charlotte’s Web is on the shelf right next to us at Northwell Health.

The statements found hereinHemp biomass and its derivative products have not been evaluated byglutted the FoodUS market, benefiting our manufacturing divisions with less expensive product but causing our hemp cultivation and Drug Administration (FDA)processing division to become financially imprudent until the oversupply issue has resolved. Thus, we have halted operations in such division for the time being but may resume such operations should a sound opportunity present. Although we have contract farm agreements in place to grow and harvest hemp biomass, other raw materials for our finished products have at least three sources of supply in the Company’s products are not intended to diagnose, treat, cure or preventopen market and we have little risk of any disease or medical condition.ingredient supply at this time.

WRAPmailIntellectual Property

The Company owns a patented technology that combines custom marketing content with organization e-mail to provide a next generation marketing platform for organizations and personal use. WRAPMail had provided software solutions for marketing and is no longer being sold or serviced.

We are not aware of any competitors developing a similar solution to WRAPmail, possibly giving us first mover advantage. Nonetheless, we may face competition from stationary letterhead, bulk e-mail and similar product providers.

Currently the Company is not pursuing additional customers for WRAPmail but does continue to service current customers using the software.

Bullseye

The Bullseye Productivity Suite is a cloud-based system that consolidates all necessary office productivity tools into one online experience, accessible everywhere when you need it with full disaster recovery mechanisms built in. All functions and features are audited to help users with corporate governance and compliance issues.

The Company is not presently seeking additional customers for Bullseye but continues to service the existing customer base.

Intellectual Property

We own the following patents for our WRAPmail technology: US patent no. 8572275 issued on October 29, 2013. This patent expires in October 2033. On July 20, 2015, WRAPmail filed for a new patent under the title: Method, System and Software for Dynamically Extracting Content for Integration with Instant Messages, which application is still pending and not being actively pursued by the Company.

The above patents relate to the document management and email marketing divisions. Due to diminishing revenue from these divisions, the Company’s accountant determined to reduce the fair value of these patents to $0.

The Company employesemploys, through its Pure Health ProductsProduct LLC Division,division, two full time product researchers and CBDdevelopers and technology experts who, on a daily basis, set the quality standards and new product development status and time-line agendas under the direct supervision of the company’sCompany’s management team.

Employees

The Company has not been granted any patents or trademarks by the USPTO or by any patent or trademark office of a foreign nation.

6

Employees

The Company, directly or through its subsidiaries, currently has four68 full-time employee and seven under services agreements.employees.

Reports to Security Holders

Our common stock is registered under the Securities Exchange Act of 1934 and we are required to file current, quarterly and annual reports and other information with the SEC. You may read and copy any document that we file at the SEC’s public reference facilities at 100 F. Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-732-0330 for more information about its public reference facilities. Our SEC filings are available to you free of charge at the SEC’s web site at www.sec.gov. We are an electronic filer with the SEC and, as such, our information is available through the Internet site maintained by the SEC that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. This information may be found at www.sec.gov and posted on our website at www.canbiola.com.www.canbcorp.com.

Research and Development

In fiscal year 2017 and 2018 we spent respectively $37,000 and $75,000 in research and development which was expenses as spent.

Government Regulation

The cultivation and sale of hemp and hemp products is federally regulated under the United States Farm Bill. The 2018 Farm Bill removed hemp as a Schedule 1 Substance under the Controlled Substances Act; however, rules and regulations relating to manufacture and sale of CBD and other hemp derivative products under the Farm Bill must still be promulgated and are expected to impact the Company’s operations. As the legal CBD industry and our product lines expand, it is uncertain what other statutory schemes and agencies will start to regulate our CBD products. The FDA currently still considers the addition of CBD to food products, cosmetics or supplements to be illegal and prohibits the advertisement of CBD products with health claims. The Company must also comply with each state’s laws relating to the sale and manufacture, as applicable, of hemp based CBD products.hemp-based products, with some states allowing the sale of cannabinoid products, some states limiting to medical purposes and some states banning outright. These regulations may affect, among others, the way the Company manufactures and distributes its products, the way the Company is taxed, the way the Company banks, the location of the Company’s facilities, the content and testing of the Company’s products, and the quality of the Company’s services. The Company has not sought or received approval of any of its products from the FDA or any state agency. Should the Company be sanctioned by the FDA or state agencies, it could materially, negatively impact the Company’s operations and revenue sources.

Through our document management and email marketing platforms, weWe are also subject to general business regulations and laws as well as Federal and state regulations and laws specifically governing the Internet and e-commerce. Existing and future laws and regulations may impede the growth of the Internet, e-commerce or other online services, and increase the cost of providing online services. These regulations and laws may cover sweepstakes, taxation, tariffs, user privacy, data protection, pricing, content, copyrights, distribution, electronic contracts and other communications, consumer protection, broadband residential Internet access and the characteristics and quality of services. It is not clear how existing laws governing issues such as property ownership, sales, use and other taxes, libel and personal privacy apply to the Internet and e-commerce. Unfavorable resolution of these issues may harm our business and results of operations. CBD sales are additionally state regulated for shipping and the Company maintains a current list.

Transfer Agent

We hadhave engaged Island Stock Transfer, located at 15500 Roosevelt Blvd, Suite 301, Clearwater, FL 33760, as our stock transfer agent. Phone: 727.289.0010. Our former director, Carl Dilley, is a principal of Island Stock Transfer.

On April 1st, 2019 we changed Transfer Agents to Transhare Corporation located at 15500 Roosevelt Blvd,2849 Executive Drive, Suite 302,200, Clearwater, FL 33760.33762 as our transfer agent.

Item 1A.Risk Factors

We are a smaller reporting company and not required to provide the information in this Item.

Item 1B.Unresolved Staff Comments

Not applicable.

7

 

Item 2.Properties

The Company does not currently own any real property. We do however lease office space in Hicksville, New York.York for $3,917 per month, out of which all subsidiaries other than PHP operate. The Company’s wholly-owned subsidiary, Pure Health Products, operates its manufacturing facility in Lacey, Washington with lease payments equal to $2,345 per month. The Company has leases for three (3) properties, as described below.

The Company leases approximately 7,408 square feet of the stateproperty located at 2041 NW 1st Avenue, Miami, FL 33127 (the “1st Property”). Base rent for the 1st Property is $16,000 per month, or $192,000 for the first year, except that if CANB pays the base rent in advance, the base rent amount for the first year will be reduced to $186,000. The base rent will increase by 5% each year during the term of Washington.the lease.

The Company leases an approximately 14,300 square foot building and related parcel located at 14320 Longs Peak Court, Mead, CO 80504 (the “LPC Property”) for base rent equal to $13,764 for the first year of the lease. Following the first year of the lease, on September 1 of each year, the base rent for the LPC Property will be increased by the greater of (i) 3%, or (ii) the difference between the Consumer Price Index for All Urban Consumers (as published by the Bureau of Labor Statistics) (“CPI”) for August 2021 compared to the CPI for August of the applicable year.

CANB leases an approximately 300,000 square foot facility situated on approximately 20 acres of industrial rated property located at 204 Red Road, McMinnville, TN 307110 (the “RR Property”) for base rent equal to $25,000 per month. The Company was granted an option to purchase the RR Property for a purchase price equal to fair market and appraised value and a right of first refusal to purchase the RR Property in the event the landlord receives a third-party offer to purchase the RR Property during the term of the lease.

CO Botanicals, LLC (“COB”), a wholly-owned subsidiary of Can B̅ Corp. leases the real properties located at 17171 County Road 21, Fort Morgan, CO 80701 and 12555 Energy Road, Fort Morgan, CO 80701 (collectively, the “Fort Morgan Properties”) on a month-to-month basis. Base rent for the Fort Morgan Properties is $22,250 per month.

Duramed leases an approximately 1,800 square feet office space located at 24901 Northwestern Highway, Southfield, MI. The lease term is for 18 months. Base rent for the lease term is $1,914 per month, or $22,963 for the first year. The base rent increases to $2,028 for the final six months.

Item 3.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.

We have consulted with attorneys and believe the Investors’ complaints are without merit, factually inaccurate, and frivolous. We intend to vigorously defend ourselves against the aforementioned legal action and will likely bring counterclaims against the Investors.

8

Around 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.

Other than above, we are not aware of any pending or threatened legal proceedings in which we are involved, except as disclosed herein. On or around May 11, 2018, the Company initiated arbitration proceedings against T8 Partners, Inc., a New York Corporation (“T8”), pursuant to the American Arbitration Association (“AAA”) rules, for breach of contract and return of 2.5M shares of the Company’s common stock for non-performance by T8 under a services contract. The case, Case No. 01-18-0001-8823, is being heard in AAA’s Los Angeles Regional Office.involved.

Item 4.Mine Safety Disclosures

Not applicable.

 

PART II

Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common stock is listed for quotation on OTCQBOTC Market’s OTCQB® Venture Market under the symbol “CANB.” Our common stock began trading in April 2011. Trading in our common stock has historically lacked consistent volume, and the market price has been volatile. Quotations of our common stock on OTCQB® reflect inter-dealer prices, without retail mark-up, mark-down, or commission, and may not necessarily represent actual transactions. We is applying to have our common stock traded on Nasdaq’s Capital Market.

The following table presents, for the periods indicated, the high and low bid prices of the Company’s common stock and is based upon information provided by OTC Market. These quotations below reflect inter-dealer prices, without retail mark-up, mark-down, or commission, and may not necessarily represent actual transactions.

 2018 
20212021
 High Low  High Low 
First Quarter $0.05  $0.02  $1.37   0.37 
Second Quarter $0.03  $0.01  $0.65   0.27 
Third Quarter $0.10  $0.01  $0.98   0.40 
Fourth Quarter $0.10  $0.03  $0.75   0.40 

  2017 
  High  Low 
First Quarter $0.09  $0.07 
Second Quarter $0.04  $0.03 
Third Quarter $0.03  $0.03 
Fourth Quarter $0.04  $0.03 

2020 (Post 300:1 Reverse Split)
  High  Low 
First Quarter $6.30  $0.95 
Second Quarter $1.98  $0.40 
Third Quarter $1.80  $0.40 
Fourth Quarter $0.67  $0.35 

The last reported sale price of the Company’s common stock as of April 12, 201914, 2022 was $0.039$5.36 per share.

9

 

Record Holders

As of April 12, 2019,13, 2022, there were 548,487,7143,325,814 shares of common stock issued and outstanding to approximately 163392 shareholders of record.

Dividends

The Company paid $13,779$0 in in-kind dividends on its ClassSeries B Preferred Stock by the issuance of common stock to the ClassSeries B holders in 20182020 and $0 in 2017.2019. Each share of Series B Preferred Stock has the first preference to dividends, distributions and payments upon liquidation, dissolution and winding-up of the Company, and is entitled to an accrued cumulative but not compounding dividend at the rate of 5% per annum whether or not declared. After six months of the issuance date, such share and any accrued but unpaid dividends can be converted into common stock at the conversion price which is the lower of (i) $0.0101; or (ii) the lower of the dollar volume weighted average price of CANB common stock on the trading day prior to the conversion day or the dollar volume weighted average price of CANB common stock on the conversion day. The Series B Preferred Stock have no voting rights. There are no currently outstanding shares of Series B Preferred Stock*.

We do not anticipate paying any cash dividends in the foreseeable future. Except for its ClassSeries B Preferred Stock, of which there are none issued and outstanding*, the payment of dividends is within the discretion of our Board of Directors and will depend on our earnings, capital requirements, financial condition, and other relevant factors. There are no restrictions that currently limit our ability to pay dividends on our common stock other than those generally imposed by applicable state law.

* It has come to our attention that the Company’s transfer agent still shows 227,590 Series B Preferred shares as being held by RedDiamond Partners LLC (“RedDiamond”) due to an administrative oversight. Nonetheless, such shares were retired in exchange for 97,608 shares of common stock and rights to acquire an additional 35,667 shares of common stock issued to RedDiamond pursuant to an Exchange Agreement dated August 13, 2019.

Securities Authorized for Issuance under Equity Compensation Plans

WeOn July 28, 2020, the Company adopted an Incentive Stock Option Plan (“ISO”). The purpose of this Can B Corp. 2020 ISO (the “Plan”) is to attract, retain, and motivate employees, officers, directors, consultants, agents, advisors and independent contractors of the Company and its Related Companies by providing them the opportunity to acquire a proprietary interest in the Company and to align their interests and efforts to the long-term interests of the Company’s stockholders. The Plan is administered by the Compensation Committee or, in the Board’s sole discretion, the Board. The Compensation Committee shall be composed of two or more directors, each of whom is a “non-employee director” within the meaning of Rule 16b-3(b)(3) promulgated under the Exchange Act, or any successor definition adopted by the Securities and Exchange Commission. As used in this Plan, the term “Compensation Committee” shall be construed as if followed by the words “(if any);” and nothing in this Plan requires the Board to have a Compensation Committee. Except for the terms and conditions explicitly set forth in the Plan and to the extent permitted by applicable law, the Committee shall have full power and exclusive authority, subject to such orders or resolutions not inconsistent with the provisions of the Plan as may from time to time be adopted by the Board or a Committee composed of members of the Board, to (i) select the Eligible Persons to whom Awards may from time to time be granted under the Plan; (ii) determine the type or types of Award to be granted to each Participant under the Plan; (iii) determine the number of shares of Preferred Stock and/or Common Stock (collectively, “Stock”) to be covered by each Award granted under the Plan; (iv) determine the terms and conditions of any Award granted under the Plan; (v) approve the forms of notice or agreement for use under the Plan; (vi) determine whether, to what extent and under what circumstances Awards may be settled in cash, shares of Preferred Stock and/or Common Stock or other property or canceled or suspended; (vii) determine whether, to what extent and under what circumstances cash, shares of Stock, other property and other amounts payable with respect to an Award shall be deferred either automatically or at the election of the Participant; (viii) interpret and administer the Plan and any instrument evidencing an Award, notice or agreement executed or entered into under the Plan; (ix) establish such rules and regulations as it shall deem appropriate for the proper administration of the Plan; (x) delegate ministerial duties to such of the Company’s employees as it so determines; and (xi) make any other determination and take any other action that the Committee deems necessary or desirable for administration of the Plan. Subject to adjustment from time to time, a maximum of two thousand (2,000) shares of Class C Preferred Stock and ten million (10,000,000) shares of Common Stock shall be available for issuance under the Plan. Shares issued under the Plan shall be drawn from authorized and unissued shares or shares now held or subsequently acquired by the Company as treasury shares. The Committee shall also, without limitation, have the authority to grant Awards as an alternative to or as the form of payment for grants or rights earned or due under other compensation plans or arrangements of the Company. Subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the Option, the maximum term of an Option shall be ten years from the Grant Date. An Award may be granted to any employee, officer or director of the Company or a Related Company whom the Committee from time to time selects. An Award may also be granted to any consultant, agent, advisor or independent contractor for bona fide services rendered to the Company or any Related Company that (a) are not in connection with the offer and sale of the Company’s securities in a capital-raising transaction and (b) do not now have,directly or plan to have inindirectly promote or maintain a market for the near future, an equity incentive plan.Company’s securities.

10

 

Equity Compensation Plan Information

Plan Category Number of Securities to be Issued Upon Excise of Outstanding Options, Warrants and Rights  Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights  Number of Securities Remaining Available for Future Issuances Under Equity Compensation Plans* 
Equity compensation plans approved by security holders  1,187,199  $         0.36   58,812.801 
Equity compensation plans not approved by security holders  -   -   - 
Total  1,187,199  $0.36   58,812,801 

*Represents 2,000 Series C Preferred Shares on an as-converted basis and 8,812,801 shares of common stock available under the Plan.

Sales of unregistered securities during the year ended December 31, 2021 are as follows:

Recent Sales of Unregistered Securities

From January 1, 2021 through December 31, 2021 the Company issued an aggregate of 814,336 shares of Common Stock under its Reg A-1 registration currently in effect and an additional 157,115 shares of common stock to various consultants for service

From January 1, 2021 through December 31, 2021 the Company issued an aggregate of 381,791 shares of Common Stock under various asset acquisition agreements.

From January 1, 2021 through December 31, 2021 the Company issued an aggregate of 111,874 shares of Common Stock under various note and related interest conversion agreements.

From January 1, 2021 through December 31, 2021 the Company issued an aggregate of 150 shares of Preferred C shares under multiple employment agreements. The followingPreferred C shares converted to 1,000,000 shares of Common Stock upon issuance.

With respect to the transactions noted above, each of the recipients of securities of the Company was an accredited investor, or is considered by the Company to be a summary“sophisticated person”, inasmuch as each of transactions since our previous disclosure on our Form 10-Q filedthem has such knowledge and experience in financial and business matters that they are capable of evaluating the merits and risks of receiving securities of the Company. No solicitation was made and no underwriting discounts were given or paid in connection with these transactions. The Company believes that the issuance of its securities as described above was exempt from registration with the Securities and Exchange Commission on November 14, 2018 involving sales of our securities that were not registered under the Securities Act of 1933, as amended (the “Securities Act”). Each offer and sale were exempt from registration under eitherpursuant to Section 4(a)(2) of the Securities Act and/or Rule 506(b) under Regulation D of the Securities Act.Act of 1933.

11

 

From October 2, 2018 to November 7, 2018, the Company issued aggregately 13,094,733 shares of CANB common stock to RedDiamond in exchange for the retirement of 101,736 shares of CANB Series B Preferred Stock.

From November 5, 2018 to December 28, 2018, the Company issued aggregately 2,125,000 shares of CANB common stock to multiple consultants for services rendered. The $80,665 fair value of the 2,125,000 shares of CANB common stock was partially charged to consulting fees in the three months ended December 30, 2018.

From December 3, 2018 to December 28, 2018, the Company issued aggregately 1,500,000 shares of CANB common stock to three board members for services rendered. The $62,342 fair value of the 1,500,000 shares of CANB common stock was charged to director fees in the three months ended December 30, 2018.

From December 3, 2018 to December 28, 2018, the Company issued aggregately 22,413,794 shares of CANB common stock to multiple investors pursuant to relative Stock Purchase Agreements dated on various dates, in exchange for total proceeds of $650,000.

On December 11, 2018, the Company issued 891,089 shares of CANB common stock to RedDiamond in satisfaction of dividend payable of $9.000.

On December 19, 2018, the Company issued 891,089 shares of CANB common stock to Auctus, LLC pursuant to a cashless exercise of stock options.

On December 21, 2018, Company received a conversion notice from a lender. As a result, 9,372,100 shares of CANB common stock was issued to the lender in satisfaction of notes payable of $83,500 and accrued interest payable of $10,221.

On December 21, 2018, Company issued aggregately 4,370,629 shares of CANB common stock to four officers and key executives of the Company in satisfaction of accrued compensation of $192,300.

On December 28, 2018, the Company issued 3,096,827 shares of CANB common stock for the acquisition of Pure Health Products, LLC.

On December 28, 2018, the Company issued 245,789 shares of CANB common stock to a key executive of the Company pursuant to the Employment Agreement dated December 29, 2018 with Andrew Holtmeyer. The $14,207 fair value of the issuance was charged to stock-based compensation in the three months ended December 31, 2018.

On December 29, the Company issued 30,000,000 shares of CANB common stock to Marco Alfonsi in exchange for the return of 3 shares of CANB Series A Preferred Stock owned by Marco Alfonsi.

On January 28, 2019, the Company issued 10,000,000 shares of CANB common stock to a consultant of the Company in exchange for the return of 1 share of CANB Series A Preferred Stock.

From February 21, 2019 to March 12, 2019, the Company issued aggregately 20,221,436 shares of CANB common stock to RedDiamond in exchange for the retirement of 157,105 shares of CANB Series B Preferred Stock.

From January 4, 2019 to March 27, 2019, the Company issued aggregately 41,431,994 shares of CANB common stock to multiple investors pursuant to relative Stock Purchase Agreements dated on various dates, in exchange for total proceeds of $1,196,100.

On January 14, 2019, the Company issued 7,500,000 shares of CANB common stock the owner of Hudilab, Inc., pursuant to a License and Acquisition Agreement dated January 14, 2019.

From January 18, 2019 to March 17, 2019, the Company issued aggregately 24,600,000 shares of CANB common stock to multiple consultants for services rendered.

From January 19, 2019 to March 27, 2019, the Company issued aggregately 1,167,959 shares of CANB common stock to key employees and officers of the Company pursuant to employee agreement and in satisfaction of accrued compensation for the quarter ended March 31, 2019.

On February 5, 2019, the Company issued 2,000,000 shares to the owner of TZ Wholesale LLC, pursuant to a Memorandum of Understanding (the “MOU”) dated November 9, 2018.

On February 20, 2019, the Company issued 1,000,000 shares of CANB common stock to owners of Seven Chakras pursuant to an Asset Purchase Agreement dated January 31, 2019.

Item 6.Selected Financial Data

Not required for smaller reporting companies.

Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operation

General

Canbiola, Inc.Can B̅ Corp. was originally formed as a Florida corporation on October 11, 2005, under the name of WrapMail, Inc. Effective January 5, 2015, we acquired 100% ownership of Prosperity Systems, Inc., which the Company is in the process of dissolving. Effective December 28, 2018, we acquired 100% ownership of Pure Health Products. In November 2018, we formed Duramed as a wholly-owned subsidiary. The Company is presently in the process of dissolving Prosperity.

WeThe Company is in the business of promoting health and wellness through its development, manufacture and sellsale of products containing CBD. We also provide document, project, marketingcannabinoids derived from hemp biomass and sales management systemsthe 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 our residual business clientsbe the premier provider of the highest quality hemp derived products on the market through our websitesourcing the best raw material and proprietary software, which divisions are being wound-down. The consolidated financial statements include the accountsoffering a variety of CANB and its wholly owned subsidiary Pure Health Products from the dateproducts we believe will improve people’s lives in a variety of its acquisition on December 28, 2018.areas.

Results of Operations

Year Ended December 31, 20182021 compared with Year Ended December 31, 2017:2020:

Revenues increased $545,857$2,894,160 from $122,746$1,709,669 in 20172020 to $668,603$4,603,829 in 2018.2021. The increase wasis due to the growthwind down of CBDrestrictions related to the Covid-19 Pandemic surrounding elective surgeries, enabling an increase in the usage of the Company’s Duramed product sales.

lines and ultrasound device associated with patient recovery. Additionally, due to asset acquisitions in 2021, the Company’s Music City Botanical and Botanical Biotech brands related to an increase of sales compared to 2020 of $1,709,669. Cost of product sales increased $361,068$1,333,668 from $44,466$278,062 in 20172020 to $405,434$1,611,730 in 2018 due to2021 in conjunction with the growth of product salesincrease in revenue and outreach into additional market segments such as wholesale and private label opportunities.production in 2021.

Officers and director’s compensation and payroll taxes increased $1,324,581 from to $154,406 in 2017 to $1,478,987 in 2018. The 2017 expense amount ($154,406) consists of salaries accrued to our Chief Executive Officer ($84,000) and stock based compensation of ($63,902) pursuant to their respective employment agreements and related payroll taxes ($6,504). The 2018 expense amount ($1,478,987) includes additional stock-based compensation of ($1,255,193) pursuant to their respective employment agreements and related payroll taxes ($2,559).

Consulting fees increased $1,384,902$2,198,334 from $284,741$778,062 in 20172020 to $1,669,443$2,976,396 in 2018.2021. The 20172021 expense amount ($284,741) includes stock-based compensation of ($167,688), resulting from stock issued forlegal, accounting, and other consulting fees and services incurred during the service of consultants. The 2018 expense amount ($1,669,443) includes stock-based compensation of ($1,527,107), resulting from stock issued for the service of consultants.year ending December 31, 2021.

Advertising expense increased $55,994$150,454 from $28,322$519,922 in 20172020 to $84,316$670,376 in 2018.2021.

Hosting expense decreased $7,266$5,963 from $21,963$22,781 in 20172020 to $14,697$16,818 in 2018.2021.

Rent expense increased $2,105$406,989 from $65,060$234,790 in 20172020 to $67,165$641,779 in 2018.2021.

Professional fees increased $22,172$328,370 from $95,546$533,213 in 20172020 to $117,718$861,583 in 2018.2021.

Depreciation of property and equipment increased $2,246$369,268 from $3,227$124,388 in 20172020 to $5,473$493,656 in 2018.2021.

Amortization of intangible assets decreased $3,972$610,221 from $3,972$658,910 in 20172020 to $0$48,689 in 2018.2021.

Other operating expenses increased $107,215$576,036 from $133,829$876,431 in 20172020 to $241,044$1,452,467 in 2018.2021. The increase was due largely to higher commission fees, supplies expense and shippingoffice expenses in 20182021 compared to 2017.2020. In addition, stock-based compensation expense was approximately $2,395,000 for the year ended December 31, 2021.

Net loss increased $1,972,558$3,290,491 from $2,139,719$8,878,904 in 20172020 to $4,112,277$12,169,395 in 2018.2021. The increase was due to the $2,877,777all factors discussed above and in addition an increase of $1,167,510 in total operating expenses offset by the $730,430 decrease in other expense - net, and by the $184,989 increase in gross profit.interest expense.

12

Liquidity and Capital Resources

AtAs of December 31, 2018,2021, the Company had cash and cash equivalents of $807,747$449,001 and anegative working capital of $939,582.$2,809,418. Cash and cash equivalents increased $806,095decreased $8,797 from $1,652$457,798 at December 31, 20172020 to $807,747$449,001 at December 31, 2018.2021. For the year ended December 31, 2018, $1,605,6442021, $8,174,728 was provided by financing activities, $753,569$7,322,732 was used in operating activities, and $45,980$860,793 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 currently have no commitments with any person for any capital expenditures.

We have no off-balance sheet arrangements. It is anticipated that Green Grow will again begin operations later in 2022 as Pure Health Products revenue increases and the need for additional isolate is present. Today, the available oversupply of isolate makes it cheaper to buy quality product at the market than to grow, harvest, and extract from scratch. Duramed, Inc. is beginning to show improvements in office utilization of its ultrasound device as more surgery centers are reopening.

Item 7A.Quantitative and Qualitative Disclosure About Market Risk

Not applicable.

Item 8.Financial Statements and Supplementary Data

Our Consolidated Financial Statements and Notes thereto, for the fiscal years ended December 31, 20182021 and 20172020 and the report of BMKR, LLP,BF Borgers CPA PC, our independent registered public accounting firm, are set forth on pages F-1 through F-27F-25 of this Annual Report.

Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A.Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer (CEO), as appropriate, to allow timely decisions regarding required disclosure. Based on the evaluation, the CEO has concluded that our disclosure controls and procedures are ineffective to ensure that information disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. This determination was based on the small size of our accounting staff and the lack of segregation of duties and the lack of an audit committee.duties.

To address the material weaknesses, we performed additional analysis and other post-closing procedures in an effort to ensure our financial statements included in this annual report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

Management Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system was designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

13

 

Any internal control system, no matter how well designed, has inherent limitations and may not prevent or detect misstatements. Accordingly, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Management, with the participation of our Chief Executive Officer, has evaluated the effectiveness of our internal control over financial reporting as of December 31, 20182021 based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, because of the Company’s limited resources and limited number of employees, and the absence of an audit committee, management concluded that, as of December 31, 2018,2021, our internal control over financial reporting is not effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principle, which creates a material weakness. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. A material weakness means there is a risk that our financial reports or other filings may contain an error or inaccuracy or not submitted timely.

There was a material weakness in the Company’s internal control over financial reporting due to the fact that the Company did not have an adequate process established to ensure appropriate levels of review of accounting and financial reporting matters, which resulted in our closing process not identifying all required adjustments and disclosures in a timely fashion. We expect that the Company will need to hire accounting personnel with the requisite knowledge to improve the levels of review of accounting and financial reporting matters. The Company may experience delays in doing so and any such additional employees would require time and training to learn the Company’s business and operating processes and procedures. For the near-term future, until such personnel are in place, this will continue to constitute a material weakness in the Company’s internal control over financial reporting that could result in material misstatements in the Company’s financial statements not being prevented or detected.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities and Exchange Act of 1934) during the year ended December 31, 20182021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

N/A

Item 9B.Other Information

None.

Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 

None.Not Applicable.

PART III

Item 10.Directors, Executive Officers and Corporate Governance

Our board of directors is to be elected annually by our shareholders. The board of directors elects our executive officers annually. Our directors and executive officers as of April __, 2019March 31, 2022 are as follows:

NameAgePosition
Marco Alfonsi5761CEO, Director and Chairman since June 15, 2017
Stanley L. Teeple7073CFO, Secretary and Director since October 1, 2018
Andrew HoltmeyerPhil Scala5770VP of Business DevelopmentInterim COO since August 15, 2019
Frederick Alger Boyer, Jr.53Independent Director appointed October 9, 2019
Ronald A. Silver86Independent Director appointed October 9, 2019
James F. Murphy74Independent Director appointed October 9, 2019

Marco Alfonsi, CEO and Chairman Director has been a financial service professional for the past 20 years. Mr. Alfonsi was appointed director and CEO of the Company in or around January 2015. Immediately prior to that, he spent eight years serving as the CEO of Prosperity Systems, Inc.

14

 

Throughout his career, Mr. Alfonsi was directly and indirectly involved in raising over $100 million dollars for small and medium sized business. Prior to his involvement in the financial services industry, Mr. Alfonsi has owned, operated, financed and sold several businesses. Mr. Alfonsi successfully started and managed two companies (ExecuteDirect.com, and Bakers Express of New York, Inc.), and held senior management positions with a number of financial institutions, including: Global American Investments, Clark Street Capital and Basic Investors.

Stanley L. Teeple –Mr. Teeple, CFO, Secretary, Director, was engaged from 2017-2018 with Solis Tek, Inc. (OTCQB:SLTK) a California based publicly traded corporation as Senior Vice President, Corporate Secretary , and Chief Compliance Officer. Solis Tek, Inc. a NV Corporation, is a developer of lighting and nutrient products, and most recently in cultivation and processing for the cannabis industry. Previously, from 2015-2016 Mr. Teeple was Chief Financial Officer and Secretary for Zonzia Media, Inc. (OTC:ZONX), a provider of streaming video and content to cable subscribers and hotel networks throughout the eastern US. From 2008 to 2014 Mr. Teeple was Chief Financial Officer and Secretary of Indigo-Energy, Inc. (OTC:IDGG) a publicly traded company in the oil and gas exploration business. Over the prior three plus decades Mr. Teeple through his turnaround consulting business, Stan Teeple, Inc., has held numerous senior management positions in several public and private companies across a broad spectrum of industries. Additionally, he has operated and worked for various court appointed trustees and principals as CEO, COO, and CFO in the entertainment, pharmaceuticals, food, travel, and tech industries. He operated his consulting business on a project-to-project basis and holds various other directorships. His businesses operational strengths include knowing how to manage and maximize the resources and preserve the integrity of a company from start-up through to maturity and corporate compliance in a regulatory environment.

Phil Scala, Interim Chief Operating Officer, 40 year career offers unique expertise in delivering the information needed to make informed decisions, whether in times of crisis or in the course of simply running our business; is highlighted by his 29 years of service with the FBI. Throughout his 29-year career with the FBI, he worked, supervised and lead investigations on nearly every type of federal crime, including securities fraud, white collar crime, money laundering, tax violations, narcotics, racketeering, homicide, violent crime, kidnappings, and public corruptions. Mr. Scala has been the recipient of numerous commendations and awards for outstanding service, notably the FBI Shield of Bravery, as a group commendation, as the SWAT team leader of the Al-Qaeda Bomb Factory Raid, on June 3, 1993.

Mr. Scala was assigned to the Criminal Division of the New York Office. He served in numerous assignments within the Organized crime branch and was sent to the Defense language Institute in Monterey, California to gain proficiency in the Italian/ Sicilian languages. From 2003-2008, Mr. Scala, developed and implemented the NY Office’s Leadership Development Program, which assisted relief supervisors develop excellence in leadership through mentoring, journalizing, “Best Practice” experiences, and accountability tools. The program was designed to be continuous, progressive, and measurable in assisting the FBI leaders maximize their leadership potential throughout their careers.

Mr. Scala received his Bachelor’s degree and Master of Business Administration in accounting from St. John’s University, he also earned a Master of Arts degree in Psychology from New York University.

15

 

Andrew Holtmeyer –

Frederick Alger Boyer, Jr. Independent Director, is President & CEO of Advance Care Medical, Inc. - Mr. Holtmeyer startedBoyer has over 25 years of Wall Street experience having worked on both the investment side as well as the banking side of the business Most recently he served as Head of Equities for the New York based investment bank H.C. Wainwright & Co. where he had overseen efforts in capital markets, sales, and trading. Prior to that he worked and or supervised teams at Rodman & Renshaw, Oppenheimer, Piper Jaffray, and Credit Suisse in New York, San Francisco, and Minneapolis. In his businessvarious roles he has advised hundreds of companies in their financing efforts both publicly and privately. Mr. Boyer has numerous securities licenses and is a graduate of the University of California at Berkeley.

Ronald A. Silver, Independent Director, was first elected to the Florida House of Representatives In 1978 and continued his tenure in that body until 1992. While in the Florida House, Silver served in major positions including Majority Whip (1984-1986) and Majority Leader (1986-1988). He also chaired various committees including the Select Committee on Juvenile Justice, Criminal Justice, Ethics and Elections and the subcommittee of Appropriations on General Government. He was then elected to the Florida Senate in 1992 and subsequently re-elected, serving as the Majority (Democratic) leader for the 1994 session. During his last term in the Senate he was designated by both the House and Senate as the Dean of the Legislature recognizing his standing as the longest serving member. His career as a lawmaker has yielded a vast and extensive knowledge of public policy issues and the legislative process, allowing him to be an advocate and servant for his diverse community. Throughout his tenure in the House and Senate, Mr. Silver has been known to tackle tough issues, transcend partisanship and build strong coalitions and in addition served on the Judiciary committee, which heard all condominium issues. As Senator, he served on a variety of committees, and was chairman of both the Appropriations Subcommittee on Health and Human Services and Criminal Justice. His career in the financial services sector. DuringSenate has earned praise from his 20 year career on wall street,colleagues, in both the legislature and other branches of government throughout the nation. In 1993 Mr. Holtmeyer worked atSilver was elected Chairman of the Southern Legislative Conference (17 Southern States) of the Council of State Governments. Most recently, a new prescription drug plan of Medicare-eligible senior citizens in the State of Florida has been named “Silver Saver” in his honor. Since his retirement from the Senate in 2002, Mr. Silver also functions as President of his own consulting firm (Ron Silver & Associates) and built several investment firms that employed hundreds of salesmen. During the last 5maintains his law practice in Miami Beach, Florida. Mr. Silver is married with two children and three grandchildren.

James F. Murphy, Independent Director, brings more than 40 years of his career, he concentrated mostly on investment banking. After leaving the financial sector, Mr. Holtmeyer started a highly successfulinvestigative and consulting firm, which concentrated on raising capital for small to mid-sized companies that were both private and public. After selling his consulting business, Mr. Holtmeyer started a very successful real estates business which is now run by his family.

Carl Dilley, 63, served on our Board of Directors until he resigned for personal reasons on February 21, 2019.

David Posel, 39, servedexperience as the Company’s COO during 2018, whenFounder and President of Sutton Associates. From 1980 to 1984, Mr. Murphy was an Assistant Special Agent in Charge with the Company’s operations were limitedFederal Bureau of Investigation, responsible for a territory encompassing more than seven million people. His investigative specialties included organized crime, white-collar crime, labor racketeering and political corruption. From 1976 to its contractual arrangement with Pure Health Products. After acquiring PHP directly,1980, Mr. PoselMurphy was transitionedassigned to COOthe Office of PHP.Planning and Evaluation at FBI headquarters, Washington, D.C. In this capacity, he evaluated and recommended changes in the FBI’s administrative and investigative programs. Since entering the private sector in 1984, Mr. Murphy has advanced the industry by developing systematic and professional protocols for performing due diligence, as well as other investigative services.

Board Committees

We have not yet established an audit committee, compensation committee, or nominating committee. During 2018,With one of the functions ordinarily handled by these committees were handled by our entire Board.independent Directors sitting as chair of each committee. Mr. Ron Silver is Chairman of the Nominating Committee, Mr. James Murphy is Chairman of the Audit Committee, and Mr. Alger Boyer is Chairman of the Compensation Committee.

Family Relationships

There are no familial relationships between any of our officers and directors.

Director or Officer Involvement in Certain Legal Proceedings

Our current directors and executive officers have not been involved in any legal proceedings as described in Item 401(f) of Regulation S-K in the past ten years.

Director Independence

The Company is not currently listed on any national securities exchange that has a requirement that the board of directors be independent. NoneHowever, in anticipation of a possible exchange up listing, and in an effort toward better Board oversight, the Company’scompany has engaged three independent Directors making the independent outside directors are independent.a majority on the Board of Directors.

Code of Ethics

We have not adopted a Code of Ethics that applies to all of our employees and officers, and the members of our Board of Directors dueDirectors. This Code of Ethics is posted on the Company’s website www.canbiola.com and applies to the financial constraints of doing so.all executive officers including CEO, CFO and COO.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC. Officers, directors and greater than 10% shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. Based on our review of the reports filed by Reporting Persons, we believe that, during the year ended December 31, 2018,2020, the following Reporting Persons did not meet all applicable Section 16(a) filing requirements: (i) Stanley Teeple, (ii) David Posel, and (iii) Carl Dilley.(iii Phil Scala. (iv.) Frederick Alger Boyer, (v.) Ronald Silver, (vi) James Murphy, (vi.) Pasquale Ferro, (vii.) Andrew Holtmeyer, (viii) Marco Alfonsi. Otherwise, we believe that the Reporting Persons met such filing requirements.

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Item 11.Executive Compensation

The table below summarizes all compensation awarded to, earned by, or paid to our executive officers and directors for all services rendered in all capacities to us during the previous two fiscal years, as of December 31, 2018.2021.

Executive Summary Compensation Table
 
Name and principal position Year  Salary  Bonus  Stock awards  Option awards  Non-equity incentive plan compensation  Non-qualified deferred compensation earnings  All other compensation  Total 
Marco Alfonsi(1) 2017  $84,000  $    0  $63,902  $0  $               0  $            0  $                0  $147,902 
CEO and Director 2018  $104,500  $0  $0  $0  $0  $0  $0  $104,500 
Stanley L. Teeple(2) 2018  $45,000  $0  $144,500  $118,200  $0  $0  $0  $307,700 
Andrew Holtmeyer(3) 2018  $118,400  $0  $  1,169,658  $0  $0  $0  $0  $  1,288,058 
David Posel (4) 2018  $60,000  $0  $58,720  $0  $0  $0  $0  $118,720 
Name and principal position Year  Salary  Bonus  Stock awards  Option awards  Non-equity incentive plan comp.  Non-qualified deferred comp. earnings  All other comp.  Total 
Marco Alfonsi (1)  2020  $112,500  $0  $0  $93,906  $0  $0  $0  $206,406 
   2021  $107,142  $0  $2,512,500  $100,000  $0  $0  $0  $2,719,642 
Stanley L. Teeple (2)  2020  $112,500  $0  $469,301  $93,906  $0  $0  $0  $675,707 
   2021  $90,000  $0  $2,512,500  $100,000  $0  $0  $0  $2,702,500 
Pasquale Ferro (3)  2020  $112,500  $0  $528,870  $93,906  $0  $0  $0  $735,276 
   2021  $98,654  $0  $2,512,500  $100,000  $0  $0  $0  $2,711,154 
Phil Scala (4)  2020  $0  $0  $0  $93,906  $0  $0  $0  $93,906 
   2021  $

52,000

  $0  $0  $0  $0  $0  $0  $

52,000

 

(1) Pursuant to an employment agreement entered on or around May 14, 2015, Marco Alfonsi was entitled to receive compensation of $6,000 per month through September 31, 2017 when the contract expired. On or around October 3, 2017, the Company entered into a new employment agreement with Mr. Alfonsi whereby he was entitled to receive $10,000 per month for a period of three years. Mr. Alfonsi also received one share of ClassSeries A Preferred Stock upon his execution of the new agreement. In addition, on or around October 4, 2017, the Company authorized the issuance of an additional two shares of ClassSeries A Preferred Stock to Mr. Alfonsi in consideration for cancellation of approximately $120,000 of deferred income owed to Mr. Alfonsi. The Company entered into a new employment agreement dated October 21, 2018 Mr. Alfonsi, pursuant to which Mr. Alfonsi agreed to continue to serve as the Company’s Chief Executive Officer (“CEO”) and accept appointment as Chairman of the Board of Directors (“Chairman”) for an initial term of four (4) years. He is entitled to receive $15,000 per month and other compensation under the new agreement. On December 28, 2020, Marco Alfonsi signed a three year Employment Agreement. Under that agreement, he is to receive a i) base salary of fifteen thousand dollars ($15,000.00) per month, ii) is eligible to receive cash and or stock bonuses, iii) shall receive a stock bonus in accordance with the Company’s Incentive Stock Option Plan (“ISOP”) in an amount of one-hundred thousand dollars ($100,000) per year of the Agreement, iv) 200 shares of the Company’s Series C Preferred stock, and v) usual and customary benefits including expense reimbursement, health and life insurance plan reimbursements and allowances.

(2) Pursuant to an employment agreement entered on or around October 15, 2018, Mr. Teeple servicesserves as the Company’s Chief Financial Officer and Secretary for a term of 4 years. The Agreement also providesprovided for compensation to Mr. Teeple of $15,000 cash per month and the issuance of 1 share of Series A Preferred Stock upon execution of the Agreement. The fair value of the Series A preferred Stockshare is $578,000 and has a conversion vesting (but not voting) period of four years. An additional three shares of Series A Preferred Stock were issued in April 2019 per a new employment Agreement. The fair value of the Series A Preferred share issued in April 2019 is $992,250 and has a conversion (but not voting) vesting period of three years. In 2018,2020 and 2019, the amortized portion of Series A preferred Stockshares is $144,500.$469,301 and $372,667, respectively. On December 28, 2020, Stanley Teeple signed a new three-year Employment Agreement. Under that agreement, he is to receive a i) base salary of fifteen thousand dollars ($15,000.00) per month, ii) is eligible to receive cash and or stock bonuses, iii) shall receive a stock bonus in accordance with the Company’s ISOP in an amount of one-hundred thousand dollars ($100,000) per year of the Agreement, iv) 200 shares of the Company’s Series C Preferred stock, and v) usual and customary benefits including expense reimbursement, health and life insurance plan reimbursements and allowances.

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(3) On February 16,December 28, 2018, the Company executed an Executive Service Agreement (“Ferro Agreement”) with Andrew W Holtmeyer.Pasquale Ferro. The Ferro Agreement provides that Mr. Holtmeyer servicesFerro serves as the Company’s Executive Vice President Businessof Pure Health Products, LLC for a term of 34 years. The Ferro Agreement also provides for compensation to Mr. Holtmeyer of $10,000 cash per month and the issuance of 3, 2 and 1 share of Series A Preferred Stock at the beginning of each year. On December 29, 2018, this Agreement was terminated due to the execution of a new Employment Agreement with Andrew W Holtmeyer. The Agreement provides that Mr. Holtmeyer services as the Company’s Executive Vice President Business for a term of 4 years. The Agreement also provides for compensation to Mr. HoltmeyerFerro of $15,000 cash per month and the issuance of 245,789 shares of common stock upon signing of the agreement. In 2018, the Company issued 5 shares of Series A Preferred Stock upon execution of the Ferro Agreement. The fair value of the Series A preferred shares valued at $3,910,000is $2,109,700 and has a conversion (but not voting) vesting period of four years. In 2019, the amortizationamortized portion of Series A preferred stock is $527,425. On December 28, 2020, Pasquale Ferro signed a three year Employment Agreement. Under that agreement, he is to receive a i) base salary of fifteen thousand dollars ($15,000.00) per month, ii) is eligible to receive cash and or stock bonuses, iii) shall receive a stock bonus in 2018 is $1,169,658.accordance with the Company’s ISOP in an amount of one-hundred thousand dollars ($100,000) per year of the Agreement, iv) 200 shares of the Company’s Series C Preferred stock, and v) usual and customary benefits including expense reimbursement, health and life insurance plan reimbursements and allowances.

(4) On February 12, 2018,October 11, 2019, the Company executed an Executive Service Agreement (“Scala Agreement”) with David Posel.Phil Scala. The Scala Agreement provides that Mr. Posel servicesScala serves as the Company’sInterim Chief Operating Officer for a term of 4 years.90 days. The Scala Agreement also provides for compensation to Mr. PoselScala of $5,000$2,500 cash per monthmonth. On January 1, 2020, Scala and the issuanceCompany extended the engagement until March 31, 2020. On December 28, 2020, Phil Scala signed a three-year Employment Agreement. Under that agreement, he is to receive a i) base salary of 1 sharefifty-two thousand dollars per year, ii) is eligible to receive cash and or stock bonuses, iii) shall receive a stock bonus in accordance with the Company’s ISOP in an amount of Series A Preferred Stock at the inceptionone-hundred thousand dollars ($100,000), iv) 20 shares of the Agreement. InCompany’s Series C Preferred stock, and v) usual and customary benefits including expense reimbursement, health and life insurance plan reimbursements and allowances.

As of 12-31-2020, there were Incentive Stock Option Awards issued to Marco Alfonsi, Pasquale Ferro, Stanley Teeple, and Phil Scala in the fourth quarter, this Agreement was terminated due toamount of $100,000 each. The Options were issued 12/29/2020 under the executionISO Plan, at a strike price of a new Employment Agreement between Pure Health Products, LLC and David Posel. The fair value$.361 per share for 277,008 shares for each of the Series A preferred Stock is $373,000 and has a vesting period of four years. In 2018, the amortized portion of Series A preferred Stock related to Mr. Posel’s service as an executive is $58,720.4 persons named.

We do not have an equity incentive plan and no named executive officer has unexercised outstanding equity awards.

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The table below summarizes all compensation awarded to, earned by, or paid to our non-interested directors for all services rendered in all capacities to us during the previous two fiscal years, as of December 31, 2018.2020.

Non-Interested Director Summary Compensation Table
Name and principal position Year Fees Earned or Paid in Cash Stock awards Option awards Non-equity incentive plan compensation Non-qualified deferred compensation earnings All other compensation Total  Year Fees Earned or Paid in Cash  

Stock awards

(1)

  Option awards (2) Non-equity incentive plan comp. Non-qualified deferred comp. earnings All other com. Total 
Carl Dilley(1) 2017 $0  $0  $0  $0  $0  $0  $0 
Frederick A. Boyer  2020  $0  $8,870  $0  $0  $0  $0  $0 
Director 2018 $0  $0  $84,000  $0  $0  $0  $84,000   2021  $0  $0  $0  $0  $0  $0  $0 
Ronald Silver  2020  $0  $4,650  $5,625  $0  $0  $0  $5,625 
Director  2021  $0  $0  $0  $0  $0  $0  $0 
James F. Murphy  2020  $0  $8,870  $0  $0  $0  $0  $0 
Director  2021  $0  $0  $0  $0  $0  $0  $0 

(1)1)In September of 2020, both Boyer and Murphy were issued 10,000 each and in December 2020 both Boyer and Murphy were issued an additional 10,000 common shares each. Director Silver was issued 10,000 shares in September 2020.
2)As of December 31, 2020, Directors Boyer, Silver and Murphy each owned 10 thousand options to exercise and purchase stock at $.30 at any time until 2023. In 2020, Mr. Dilley resigned from the Company on February 21, 2019.Silver was issued 12,500 vested options to exercise and purchase stock at $.40 at any time until 2025.

No director has received cash compensation for their directorship. We do not have a compensation committee and compensation for our directors and officers is determined by our board of directors.

We reimburse Non-Employee Directors for actual out-of-pocket costs incurred to attend board meetings. No additional compensation is paid for attendance in person or by telephone at board meetings.

The table below summarizes all outstanding equity awards for officers, as of December 31, 2021.

Open for table

Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following tables set forth the ownership, as of April 12, 2019,March 25, 2022, of our common stock by each person known by us to be the beneficial owner of more than 5% of our outstanding voting stock, our directors, and our executive officers and directors as a group. To the best of our knowledge, the persons named have sole voting and investment power with respect to such shares, except as otherwise noted. There are not any pending or anticipated arrangements that may cause a change in control. The Company’s principal office is the business address for each of the named shareholders.

Name Title Number of Common
Shares
  % of Common Shares  Number of Series D Preferred Shares  % of Series D Preferred Shares  % of
Eligible Votes
  Number of Warrants/Options currently exercisable or exercisable in the next 60 days(1) 
Marco Alfonsi CEO, Director  357,650   12.24%  600   30.77%  16.51%  18,467 
Stanley L. Teeple CFO, Director  342,485   10.29%  600   30.77%  16.18%  19,334 
Phil Scala Interim COO  188   0.006%  150   7.69%  2.18%  18,467 
Frederick A. Boyer Director  8,001   0.241%  0   0   0.241%  667 
Ronald Silver Director  7,780   0.234%  0   0   0.234%  1,500 
James F. Murphy Director  8,001   0.241%  0   0   0.241%  667 
All officers and directors as a group [6 persons]    724,105   22.01%  1,350   69.23%  35.39%  77,369 
Pasquale Ferro President, Pure Health Products  340,307   10.78%  600   30.77%  16.13   18,467 
                           
White Hair Solutions , LLC Shareholder  334,332   10.05%  0   0   7.28     

 

(1)

Shares of common stock subject to stock options or warrants currently exercisable or exercisable within 60 days of February 8, 2022 are deemed to be outstanding for computing the percentage ownership of the person holding such options or warrants and the percentage ownership of any group of which the holder is a member, but are not deemed outstanding for computing the percentage ownership of any other person.

There are 548,487,7143,289,702 shares of common stock outstanding as of April 12, 2019, and 17 shares ofMarch 13,2022, 1,950 Series AD preferred stock issued and outstanding, which in aggregate represent 1.300,000 votes and are convertible into 170,000,000 shares of common stock at any time and represent 340,000,000 votes.non-convertible. There is a total of approximately 888,487,714 votes4,589,702 eligible to be cast in any Company vote as of April 15, 2019.March 13, 2022.

(1)As of March 15, 2022, Marco, Alfonsi owns approximately 5,197,998 shares of common stock. In addition to the listed shares, five adult members of Mr. Alfonsi’s family hold an aggregate of 42,343 shares of common stock, which shares have not been included in the above calculations.

On April 12, 2019, Red Diamond Partners LLC (“Red Diamond”) owned 342,853 shares of Series B Preferred Stock, which is convertible into approximately 44,129,594 shares of common stock, subject to ownership percentage limitations; however, Series B Preferred Stock is non-voting.

The information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the rules of the Securities and Exchange Commission and is not necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed to own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option or other right. More than one person may be deemed to be a beneficial owner of the same securities.

Except as otherwise indicated and under applicable community property laws, we believe that the beneficial owners of our common stock listed below have sole voting and investment power with respect to the shares shown. Unless stated otherwise, the business address for these shareholders is 960 South Broadway, Suite 120, Hicksville, NY 11801.

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Name Title Number of Common Shares  % of Common Shares  Number of Series A Preferred Shares  % of Series A Preferred Shares  % of Eligible Votes  Number of Warrants currently exercisable or exercisable in the next 60 days 
Marco Alfonsi[1] CEO, Director  59,398,915   10.83%  5   29.41%  17.94%       0 
Stanley L. Teeple[2] CFO, Director  980,752   0.18%  1   5.88%  2.36%  0 
Andrew Holtmeyer[3] Vice President  1,107,769   0.20%  5   29.41%  11.38%  0 
All officers and directors as a group [3 persons]    61,487,436   11.21%  11   64.70%  31.68%  0 

(1) As of April 12, 2019, Marco Alfonsi owns approximately 59,398,915 shares of common stock and 5 shares of Series A preferred stock, which are convertible into 50,000,000 shares and equal 100,000,000 votes. Prior to October 29, 2015, Mr. Alfonsi owned 81,000,000 shares of the Company’s common stock, at which time it was agreed that he would retire 50,000,000 shares of common stock for 5 shares of Series A Preferred Stock. In addition to the listed shares, four members of Mr. Alfonsi’s family hold an aggregate of 10,000,000 shares of common stock, which shares have not been included in the above calculations.

(2) As of April 12, 2019, Stanley L. Teeple owns approximately 980,752 shares of common stock and 1 shares of Series A preferred stock, which are convertible into 10,000,000 shares and equal 20,000,000 votes.

(3) As of April 12, 2019, Andrew Holtmeyer owns approximately 1,107,769 shares of common stock and 5 shares of Series A preferred stock, which are convertible into 50,000,000 shares and equal 100,000,000 votes.

The following tables set forth the ownership of our common stock by each person known by us to be the beneficial owner of more than 5% of our outstanding voting stock, excluding our directors and our executive officers

Name Number of Common Shares  % of Common Shares  Number of Preferred A Shares  % of Shares  % of Eligible Votes  Number of Warrants currently exercisable or exercisable in the next 60 days 
McKenzie Webster Limited[1]  64,879,916   11.83%  0   0%  7.30%  0 
Pasquale Ferro [2]  22,172,159   4.04%  5   29.41%  13.75%  0 

(1)McKenzie Webster Limited is controlled by the Company’s former director and CFO, Rolv Heggenhougen. The business address for this shareholder is 445 NE 12th Ave., Fort Lauderdale, Florida 33301.
(2)Pasquale Ferro is the President of Pure Health Products, LLC, a wholly owned subsidiary of the Company.

The above tables are based upon information derived from our stock records. Except as otherwise indicated below and under applicable community property laws, we believe that the beneficial owners of our common stock listed below have sole voting and investment power with respect to the shares shown.

Item 13.Certain Relationships and Related Party Transactions, and Director Independence

Can B̅ Corp.’s Corporate Governance Guidelines establish standards for evaluating Director independence and requires that a majority of Directors be independent. The Board determines the independence of each Director under Nasdaq governance standards. Those standards identify the types of relationships that, if material, could impair independence. The Board determined that, under the Nasdaq listing standards, the following non-employee Directors are independent: Frederick A. Boyer, Ronald Silver and James F. Murphy. Our non-independent directors are Marco Alfonsi and Stanley L. Teeple.

Except as described herein (or within the section entitled Executive Compensation of this prospectus)report), none of the following parties (each a “Related Party”) has, in our fiscal years ended 20172019 and 2018,2020, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:

any of our directors or officers;
any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding shares of common stock; or
any member of the immediate family (including spouse, parents, children, siblings and in- laws) of any of the above persons.

ProAdvanced Group, Inc.LI Accounting Associates, LLC (“PAG”LIA”), an entity controlled by a relative of the Company’s chief executive officer,Managing Member PHP, is a customervendor of CANB. AtCan B̅ Corp. As of December 31, 2018, CANB2021, the Company had an account receivable from PAGaccounts payable due to LIA of $7,240.$5,000. For the yeartwelve months ended December 31, 2018, CANB had revenues from PAG of $5,000.

Island Stock Transfer (“IST”), an entity controlled by Carl Dilley, a Company director, is both a customer and vendor of CANB. At December 31, 2018, CANB had an account receivable from IST of $7,035 and an account payable to IST of $1,454. For the year ended December 31, 2018, CANB had revenues from IST of $4,000.

Stock Market Manager, Inc. is also an entity controlled by Mr. Dilley. For the year ended December 31, 2018, CANB had an account payable to Stock Market Manager Inc. of $1,676.

In order to facilitate its operations,2021, the Company has entered into a Production Agreement withhad expenses to LIA of $28,100.

Pasquale Ferro, President of Pure Health Products LLC, (“PHP”),manages the R&D and manufacturing of the Company products sold via other subsidiary companies. Mr. Ferro is also a New York limited liability company. Pursuant tosubstantial shareholder of the Production Agreement, PHP will manufacture, package, and sell the Company’s CBD infused products on an exclusive basis. PHP will not produce or manufacture any product containing any cannabis or hemp derivative for any person or entityCompany but receives no direct compensation from Can B, Corp. other than outlined in his Employment Agreement.

In 2020, the Company andentered into a loan payable to an executive officer of Pure Health Products of the Company controlswith a principal balance of $224,000. The loan bore interest at 12% per annum and was due in December 2020. The loan remains unpaid but current.

During the ingredients, recipe, manufacturing processes and procedures and quality and taste parameters for all Products produced at the PHP facility. PHP may also white label / rebrand or relabel the products on the Company’s behalf pursuant to “white label agreements” entered into between the Company and third-party customers. Credit card sales are processed through PHP as well. Through its contractual relationship with PHP, the Company is able to control the manufacturing process of its products while reducing its production costs. In addition, the Company has the option to acquire certain assets of PHP should it elect to take over direct manufacture of its Products. For the yeartwelve months ended December 31, 2018, purchase of CBD infused products from PHP totaled $274,556.50. Effective December 28, 2018, the Company acquired Pure Health Products, LLC.

During the year ended December 31, 2018,2021, we had products and service sales to related parties totaling $5,000.$0.

Item 14.Principal Accounting Fees and Services

The following table sets forth fees billed to us by BMKR, LLP,BF Borgers CPA PC, our independent registered public accounting firm and BKMR, LLC, our previous independent registered public accounting firm during the fiscal years ended December 31, 20182021 and December 31, 20172020 for: (i) services rendered for the audit of our annual financial statements and the review of our quarterly financial statements; (ii) services by our independent registered public accounting firms that are reasonably related to the performance of the audit or review of our financial statements and that are not reported as audit fees; (iii) services rendered in connection with tax compliance, tax advice and tax planning; and (iv) all other fees for services rendered.

  December 31, 2021  December 31, 2020 
       
Audit Fees $103,312  $99,233 
Audited Related Fees $0  $0 
Tax Fees $0  $0 
All Other Fees $0  $0 

20

 

  December 31, 2018  December 31, 2017 
       
Audit Fees $23,965  $31,700 
Audited Related Fees $  $ 
Tax Fees $  $ 
All Other Fees $  $ 

PART IV

Item 15.Exhibits, Financial Statement Schedules.

Exhibits Schedule

The following exhibits are filed with this Annual Report:

ExhibitDescription
2.1Share Purchase Agreement with Prosperity Systems, Inc., dated January 5, 2015(2)
2.12.2Share ExchangeMembership Purchase Agreement with Prosperity*Pure Health Products(6)
3.12.3Green Grow Stock Purchase Agreement(4)
2.4Green Grow Modification Agreement(1)
3.1Articles of Incorporation, as amended*amended(1)
3.2Bylaws*Bylaws(2)
10.14.1Agreement with RedDiamond Partners LLC**Articles of Amendment designating Series A Preferred Stock rights, as amended(9)
10.24.2Amended Agreement with RedDiamond Partners LLC**Articles of Amendment designating Series B Preferred Stock rights(1)
10.34.3Agreement with Pure Health Products, LLC**Articles of Amendment designating Series C Preferred Stock rights(7)
10.44.4Articles of Amendment designating Series D Preferred Stock rights(10)
10.1Employment Agreement with Marco Alfonsi**Alfonsi dated December 29, 2020(10)
10.510.2Employment Agreement with Stanley L. Teeple**Teeple dated December 29, 2020(10)
10.610.3Employment Agreement with Andrew Holtmeyer**
10.7Employment Agreement with Pasquale Ferro**Ferro dated December 29, 2020(10)
10.4Employment Agreement with Phil Scala dated December 29, 2020(10)
10.5Commission Agreement with Andrew Holtmeyer(10)

21

10.6Employment Agreement with Bradley Lebsock(10)
10.7Memorandum of Understanding with Sam International and ZetrOZ Systems LLC(3)
10.8Can B̅ Corp. 2020 Incentive Stock Option Plan(8)
10.9Arena Securities Purchase Agreement(10)
10.10ASOF Original Issue Discount Senior Secured Convertible Promissory Note(10)
10.11ASOF Warrant to Purchase Common Stock(10)
10.12ASOP Original Issue Discount Senior Secured Convertible Promissory Note(10)
10.14ASOP Warrant to Purchase Common Stock(10)
10.15Arena Security Agreement(10)
10.16Arena Intellectual Property Security Agreement(10)
10.17Arena Registration Rights Agreement(10)
10.18Arena Holding Escrow Agreement(10)
10.19Arena Guaranty Agreement from Company Subsidiaries(10)
10.20Amendment to 2020 ASOF Promissory Note(11)
10.21Amendment to 2020 ASOP Promissory Note(11)
10.222021 Arena Securities Purchase Agreement(11)
10.232021 ASOF Original Issue Discount Senior Secured Convertible Promissory Note(11)
10.242021 ASOF Warrant to Purchase Common Stock(11)
10.252021 ASOP Original Issue Discount Senior Secured Convertible Promissory Note(11)
10.262021 ASOP Warrant to Purchase Common Stock(11)
10.272021 Arena Registration Rights Agreement(11)
10.282021 Addendum to Arena Security Agreement(11)
10.292021 Addendum to Arena Intellectual Property Security Agreement(11)
10.302021 Addendum to Arena Guaranty Agreement from Company Subsidiaries(11)
10.31Asset Acquisition Agreement with Imbibe(10)
10.32Equipment Acquisition Agreement with TWS(12)
10.33Promissory Note to TWS(12)
10.34Asset Purchase Agreement with MCB(12)
10.35Commercial Lease with Makers Developments LLC(13)
10.36Single-Tenant NNN Lease Agreement with CS2 Real Estate Holdings, LLC(13)
10.37Commercial Lease with Red Road Business Park(13)

22

10.38Asset Acquisition Agreement with various Sellers (Botanical Biotech)(10)
10.810.39PrimeX Distribution Agreement
10.40American Development Partners development agreement
10.41Mast Hill Securities Purchase and Related Agreements(14)
10.42Blue Lake Partners Securities Purchase and Related Agreements(14)
14.1Code of Ethics(1)
21.1Agreement with Hudilab, Inc.**List of Subsidiaries(10)
10.931.1Agreement with TZ Wholesale LLC**
31.1Chief Executive Officer certification under Section 302 of the Sarbanes-Oxley Act of 2002
31.2Chief Financial Officer certification under Section 302 of the Sarbanes-Oxley Act of 2002
32.1Chief Executive Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2101.INSChief Financial Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002Inline XBRL Instance Document
101.SCHInline XBRL Taxonomy Extension Schema
101.CALInline XBRL Taxonomy Extension Calculation
101.DEFInline XBRL Taxonomy Extension Definition
101.LABInline XBRL Taxonomy Extension Labels
101.PREInline XBRL Taxonomy Extension Presentation

*(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)previouslyFiled 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 14, 2021 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

SIGNATURES

23

 

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Canbiola, Inc.Can B̅ Corp.
Date: April 17, 201915, 2022By:/s/ Marco Alfonsi
Name:Marco Alfonsi
Title:Chief Executive Officer
(Principal Executive Officer and Principal Accounting Officer)
Date: April 15, 2022By:/s/ Stanley L. Teeple
Name:Stanley L. Teeple
Title:Chief Financial Officer

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

PersonSignatureCapacityTitleDate
/s/ Marco AlfonsiChief Executive Officer, Director and ChairmanApril 17, 201915, 2022
Marco Alfonsi(Principal Executive Officer)
/s/ Stanley L. TeepleSecretary, CFO and DirectorApril 17, 201915, 2022
Stanley L. Teeple(Principal Financial and Accounting Officer)
/s/ Frederick Alger Boyer Jr.Independent DirectorApril 15, 2022
Frederick Alger Boyer Jr.
/s/ Ron SilverIndependent DirectorApril 15, 2022
Ron Silver
/s/ James MurphyIndependent DirectorApril 15, 2022
James Murphy

CANBIOLA, INC. AND SUBSIDIARY

24

 

Index to Financial Statements

Years Ended December 31, 2018Can B Corp. and 2017SubsidiariesPages
Index to Financial Statements
Financial Statements
Consolidated Financial Statements
Report of Independent Registered Public Accounting FirmF-2
Consolidated Balance SheetsF-3
Consolidated Statements of Operations and Comprehensive LossF-4
Consolidated Statements of Stockholders’ EquityF-5
Consolidated Statements of Cash FlowsF-6
Notes to Consolidated Financial StatementsStatements.F-7
BMKR, LLP
Certified Public Accountants

T 631 293-5000
1200 Veterans Memorial Hwy., Suite 350

F 631 234-4272
Hauppauge, New York 11788

www.bmkr.com

 

Thomas G. Kober, CPA

Charles W. Blanchfield, CPA (Retired)

F-1

Alfred M. Rizzo, CPA

Bruce A. Meyer, CPA (Retired)
Joseph Mortimer. CPA 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the board of directors of Can B Corp.

 

To the Board of Directors and

Stockholders of Canbiola, Inc

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Canbiola Inc. (the Company)Can B Corp. as of December 31. 201831, 2021 and 2017, and2020, the related consolidated statements of operations, consolidated stockholders’ equity.equity (deficit), and cash flows for each of the years in the two year periodthen ended, December 31, 2018, and the related notes (collectively referred to as the financial statements)“financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20182021 and 2017,2020, and the results of its operations and its cash flows for each of the years in the two year periodthen ended, December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.States.

 

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opm1onopinion on the Company’s financial statements based on our audits.audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)(“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our auditsaudit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are treefree of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its intemalinternal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our auditsaudit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our auditsaudit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provideaudit provides a reasonable basis for our opinion.

 

Going ConcernCritical Audit Matter

The accompanying financial statements have been prepared assuming thatCritical audit matters are matters arising from the Company will continue as a going concern. As shown incurrent-period audit of the financial statements that were communicated or required to be communicated to the Company incurred a net loss of $4,112,277 during the year ended December 31, 2018,audit committee and as of that date, had an accumulated deficit of $18,768,753 The company is in arears with certain vendor creditors which, among other things, cause the balances(1) relate to become due on demand. The Company is not aware of any alternate sources of capital to meet such demands, if made.

As discussed in note 2accounts or disclosures that are material to the financial statements the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustmentsand (2) involved our especially challenging, subjective, or complex judgments.

We determined that might result from the outcome of this uncertainty. Our opinion is not modified with respect to that matter.there are no critical audit matters.

/S/ BF Borgers CPA PC

We have served as the Company’s auditor since 2014. Hauppauge,2021

Lakewood, CO

NY

April 15, 20192022

PCAOB No. 5041

Member American Institute of Certified Public Accounts

Member Public Company Accounting Oversight Board

F-2

Canbiola, Inc.

Can B̅ Corp. and SubsidiarySubsidiaries

Consolidated Balance Sheets

  December 31, 2018  December 31, 2017 
Assets        
Current assets:        
Cash and cash equivalents $807,747  $1,652 
Accounts receivable, less allowance for doubtful accounts of $0 and $0, respectively  39,172   6,075 
Inventory  87,104   9,834 
Note receivable - current  -   75,000 
Prepaid expenses - current  210,351   64,911 
Total current assets  1,144,374   157,472 
         
Property and equipment, at cost less accumulated depreciation of $26,775 and $20,248, respectively  59,619   11,148 
         
Other assets:        
Deposits  48,726   11,687 
Prepaid expenses - noncurrent  2,365,719   - 
Note receivable - noncurrent  19,389   39,000 
Goodwill (Note 4)  55,849   - 
Total other assets  2,489,683   50,687 
         
Total assets $3,693,675  $219,307 
         
Liabilities and Stockholders’ Deficiency        
Current liabilities:        
Notes and loans payable $19,205  $193,504 
Derivative Liability  -   1,451,137 
Accounts payable  73,059   143,274 
Accrued officers compensation  68,750   98,750 
Other accrued expenses payable  43,778   62,539 
Total current liabilities and total liabilities  204,792   1,949,204 
Commitments and contingencies (Notes 14)        
         
Stockholders’ deficiency:        
Preferred stock, authorized 5,000,000 shares:        
Series A Preferred stock, no par value: authorized 20 shares, issued and outstanding 18 and 8 shares, respectively  4,557,424   243,537 
Series B Preferred stock, $0.001 par value: authorized 500,000 shares, issued and outstanding 499,958 and 157,985 shares, respectively  479   150 
Common stock, no par value; authorized 750,000,000 shares, issued and outstanding 440,566,325 and 225,572,323 shares, respectively  16,624,557   12,524,042 
Additional Paid-in capital  872,976   149,850 
Additional Paid-in capital – Stock Options (Note 12)  202,200   - 
Accumulated deficit  (18,768,753)  (14,647,476)
Total stockholders’ deficiency  3,488,883   (1,729,897)
         
Total liabilities and stockholders’ deficiency $3,693,675  $219,307 
  December 31,  December 31, 
  2021  2020 
Assets        
Current assets:        
Cash and cash equivalents $449,001  $457,798 
Accounts receivable, less allowance for doubtful accounts of $547,241 and $485,848, respectively  3,646,677   2,003,064 
Inventory  2,553,438   344,954 
Note receivable  2,898   2,898 
Prepaid expenses and other current assets  1,625   8,152 
Total current assets  6,653,639   2,816,866 
         
Property and equipment, net  7,052,926   994,979 
         
Other assets:        
Deposits  165,787   21,287 
Intangible assets, net  369,015   - 
Right of use assets, net  2,220,134   58,174 
Other noncurrent assets  13,139   20,315 
Total other assets  2,768,075   99,776 
         
Total assets $16,474,640  $3,911,621 
         
Liabilities and Stockholders’ Equity        
Current liabilities:        
Accounts payable $1,163,284  $153,640 
Accrued expenses  2,407,528   200,495 
Due to related party  218,273   - 
Notes and loans payable, net  4,865,749   1,827,531 
Operating lease liability - current  808,223   43,506 
Total current liabilities  9,463,057   2,225,172 
         
Long-term liabilities:        
Notes and loans payable, net  -   194,940 
Operating lease liability - noncurrent  1,392,068   15,492 
Total long-term liabilities  1,392,068   210,432 
         
Total liabilities $10,855,125  $2,435,604 
         
Commitments and contingencies (Note 13)  -   - 
         
Stockholders’ equity:        
Preferred stock, authorized 5,000,000 shares:        
Series A Preferred stock, 0 par value: 20 shares authorized, issued and outstanding  28,440,000   28,440,000 
Series B Preferred stock, $0.001 par value: 500,000 shares authorized, 0 issued and outstanding  -   - 
Series C Preferred stock, $0.001 par value: 2,000 shares authorized, 23 issued and outstanding  207,000   5,607,000 
Series D Preferred stock, $0.001 par value: 4,000 shares authorized, 1,950 issued and outstanding  2   - 
Preferred stock        
Common stock, 0 par value; 1,500,000,000 shares authorized, 2,834,756 and 369,639 issued and outstanding at December 31, 2021 and 2020, respectively  49,676,847   30,874,270 
Treasury stock  (572,678)  (572,678)
Additional paid-in capital  5,635,003   2,724,689 
Accumulated deficit  (77,766,659)  (65,597,264)
Total stockholders’ equity  5,619,515   1,476,017 
         
Total liabilities and stockholders’ equity $16,474,640  $3,911,621 

See notes to consolidated financial statements.statements

Canbiola, Inc.

F-3

Can B̅ Corp. and SubsidiarySubsidiaries

Consolidated StatementsStatement of Operations

  2021  2020 
  Year Ended 
  December 31, 
  2021  2020 
Revenues        
Product sales $4,156,281  $1,708,419 
Service revenue  447,548   1,250 
Total revenues  4,603,829   1,709,669 
Cost of revenues  1,611,730   278,062 
Gross profit  2,992,099   1,431,607 
         
Operating expenses  13,258,106   8,968,408 
         
Loss from operations  (10,266,007)  (7,536,801)
         
Other income (expense):        
Other income  2,991   10,000 
Gain from forgiveness of debt  196,889   - 
Interest expense  (2,102,193)  (934,683)
Other expense  -   (414,116)
Other expense  (1,902,313)  (1,338,799)
         
Loss before provision for income taxes  (12,168,320)  (8,875,600)
         
Provision for income taxes  1,075   3,304 
         
Net loss $(12,169,395) $(8,878,904)
         
Loss per share - basic and diluted $(9.06) $(37.68)
Weighted average shares outstanding - basic and diluted  1,343,219   235,649 

See notes to consolidated financial statements

F-4

Can B̅ Corp. and Comprehensive LossSubsidiaries

Years Ended December 31, 2018 and 2017

  2018  2017 
Revenues        
Product Sales $651,978  $79,030 
Service Revenue  16,625   43,716 
Total Revenues  668,603   122,746 
Cost of product sales  405,534   44,466 
Gross Profit  263,069   78,280 
         
Operating costs and expenses:        
        
Officers and directors compensation (including stock-based compensation of $1,255,193 and $63,902 respectively)  1,478,987   154,406 
Consulting fees (including stock-based compensation of $1,524,107 and $167,688, respectively)  1,669,443   284,741 
Advertising expense  84,316   28,322 
Hosting expense  14,697   21,963 
Rent expense  67,165   65,060 
Professional fees  117,718   95,546 
Depreciation of property and equipment  5,473   3,227 
Amortization of intangible assets  -   3,972 
Other  241,044   133,829 
         
Total operating expenses  3,678,843   791,066 
         
Loss from operations  (3,415,774)  (712,786)
         
Other income (expense):        
Cancellation of Debt  -   10,589 
Loss on Forgiveness of receivable from Pure Health Products  (85,827)  - 
Loss on debt conversion  (1,299,369)  (32,383)
Loss on stock issuance  (649,259)  (191,553)
Impairment of intangible assets  -   (21,507)
Interest income  10,325   2,842 
Income (expense) from derivative liability  1,591,137   (915,700)
Interest expense (including amortization of debt discounts of $176,497 and $50,315, respectively)  (263,510)  (279,221)
         
Other income (expense) - net  (696,503)  (1,426,933)
         
Loss before provision for income taxes  (4,112,277)  (2,139,719)
         
Provision for income taxes  -   - 
         
Net loss and comprehensive loss $(4,112,277) $(2,139,719)
         
Net loss per common share - basic and diluted $(.01) $(.00)
         
Weighted average common shares outstanding –        
Basic  276,026,704   165,230,550 
Diluted  423,881,781   256,295,851 

Canbiola, Inc. and Subsidiary

Consolidated Statements of Stockholders’ DeficiencyEquity

Years Ended December 31, 2017

                                              
  Series A  Series B  Series C  Series D           Additional       
  Preferred Stock  Preferred Stock  Preferred Stock  Preferred Stock  Common Stock  Treasury Stock  Paid-in  Accumulated    
  Shares  Amount  Shares  Amount  Shares  Amount  Shares  Amount  Shares  Amount  Shares  Amount  Capital  Deficit  Total 
Balance, December 31, 2019  20  $5,539,174   -  $-  -  $-   -  $ -   178,729  $24,323,712   -  $-  $1,456,176  $(24,669,513) $6,649,549 
                                                             
Opening balance adjustments     22,900,826   -   -  623   5,607,000  -  -   -   3,778,521    -   -   -   (32,048,847  237,500  
                                                             
Issuance of common stock for services rendered  -   -   -   -  -   -   -   -   62,747   1,568,109   -   -   -   -   1,568,109 
                                                             
Issuance of common stock - reverse stock split rounding  -   -   -   -   -   -   -   -   164   -   -   -   -   -   - 
                                                             
Issuance of common stock pursuant to note agreements  -   -   -   -   -   -   -   -   59,000   575,537   -   -   -   -   575,537 
                                                             
Issuance of common stock for acquisition of intangible assets  -   -   -   -   -   -   -   -   19,000   217,012   -   -   -   -   217,012 
                                                             
Issuance of common stock for compensation  -   -   -   -   -   -   -   -   2,000   41,625   -   -   -   -   41,625 
                                                             
Issuance of common stock in lieu of interest payment  -   -   -   -   -   -   -   -   12,333   77,775   -   -   -   -   77,775 
                                                             
Issuance of common stock for inventory  -   -   -   -   -   -   -   -   31,914   491,979   -   -   -   -   491,979 
                                                             
Treasury stock acquired  -   -   -   -   -   -   -   -   (36,248)  -   36,248   (560,000)  -   -   (560,000)
                                                             
Sale of common stock  -   -   -   -   -   -   -   -   40,000   300,000   -   -   -   -   300,000 
                                                             
Shi Farms shares  -   -   -   -   -   -   -   -   -   (500,000)  -   (12,678)  -   -   (512,678)
                                                             
Stock-based compensation  -   -   -   -   -   -   -   -   -   -   -   -   540,413   -   540,413 
                                                             
Issuance of common stock warrants in connection with convertible promissory notes payable  -   -   -   -   -   -   -   -   -   -   -   -   728,100   -   728,100 
                                                             
Net loss  -   -   -   -   -   -   -   -   -   -   -   -   -   (8,878,904)  (8,878,904)
                                                             
Balance, December 31, 2020  20  $28,440,000   -  $-   623  $5,607,000   -  $-   369,639  $30,874,270   36,248  $(572,678) $2,724,689  $(65,597,264) $1,476,017 
                                                             
Issuance of preferred stock  -   -   -   -   -   -   1,950   2   -   -   -   -   -   -   2 
                                                             
Conversion of Series C Preferred stock to Common stock  -   -   -   -   (600)  (5,400,000)  -   -   1,000,000   5,400,000   -   -   -   -   - 
                                                             
Sale of common stock  -   -   -   -   -   -   -   -   814,336   6,555,453   -   -   -   -   6,555,453 
                                                             
Issuance of common stock in lieu of note repayments  -   -   -   -   -   -   -   -   77,017   537,748   -   -   -   -   537,748 
                                                             
Issuance of common stock for services rendered  -   -   -   -   -   -   -   -   157,115   2,657,048   -   -   -   -   2,657,048 
                                                             
Issuance of common stock for asset acquisitions  -   -   -   -   -   -   -   -   381,791   3,453,014   -   -   -   -   3,453,014 
                                                             
Issuance of common stock warrants and commitment shares in connection with convertible promissory note  -   -   -   -   -   -   -   -   -   -   -   -   515,276   -   515,276 
                                                             
Issuance of common stock in lieu of interest payment  -   -   -   -   -   -   -   -   34,857   199,314   -   -   -   -   199,314 
                                                             
Stock-based compensation                                                  2,395,038         
                                                             
Net loss  -   -   -   -   -   -   -   -   -   -   -   -   -   (12,169,395)  (12,169,395)
                                                             
Balance, December 31, 2021  20  $28,440,000   -  $-   23  $207,000   1,950  $2   2,834,756  $49,676,847   36,248  $(572,678)  $5,635,003  $(77,766,659) $5,619,515 

See notes to consolidated financial statements

F-5

Can B̅ Corp. and 2018Subsidiaries

  Preferred Stock A,  Preferred Stock B,  Common Stock,  Additional       
  no par value  $0.001 par value  no par value  Paid-in  Accumulated    
  Shares  Amount  Shares  Amount  Shares  Amount  Capital  Deficit  Total 
                            
Balance, December 31, 2016  10  $103,664   -   -   146,008,250  $11,889,505  $-  $(12,507,757) $(514,588)
                              ��      
Issuance of common stock on February 2, 2017 for services rendered                  200,000   11,000           11,000 
                                     
Issuance of common stock on February 13, 2017 in satisfaction of debt and accrued interest                  1,685,900   67,436           67,436 
                                     
Issuance of common stock on March 22, 2017 in satisfaction of debt and accrued interest                  6,785,316   154,027           154,027 
                                     
Issuance of common stock on April 17, 2017 for services rendered                  5,000,000   125,000           125,000 
                                     
Issuance of common stock on June 21, 2017 for services rendered                  250,000   5,975           5,975 
                                     
Issuance of common stock on June 28, 2017 for services rendered                  250,000   5,000           5,000 
                                     
Issuance of common stock on August 25, 2017 in satisfaction of debt and accrued interest                  7,142,857   107,142           107,142 
                                     
Issuance of common stock on August 25, 2017 for services rendered                  250,000   3,750           3,750 
                                     
Issuance of common stock on September 5, 2017 for services rendered                  250,000   4,375           4,375 
                                     
Issuance of common stock on September 7, 2017 for services rendered                  2,500,000   32,750           32,750 
                                     
Issuance of common stock on September 11, 2017 for services rendered                  500,000   6,700           6,700 
                                     
Issuance of common stock on September 25, 2017 for services rendered                  250,000   2,525           2,525 
                                     
Issuance of Series A Preferred Stock on October 4, 2017 in satisfaction of accrued officer compensation  3   191,705                           191,705 
                                     
Sale of Series B Preferred Stock on October 13, 2017 at $0.95 per share          157,985   150           149,850       150,000 
                                     
Issuance of common stock on November 2, 2017 for services rendered                  250,000   1,725           1,725 
                                     
Issuance of common stock on November 9, 2017 for services rendered                  2,500,000   21,250           21,250 
                                     
Issuance of common stock and retirement of Series A preferred stock on November 30, 2017  (5)  (51,832)          50,000,000   51,832           - 
                                     
Issuance of common stock on December 5, 2017 for services rendered                  500,000   6,000           6,000 
                                     
Issuance of common stock on December 7, 2017 for services rendered                  250,000   4,500           4,500 
                                     
Issuance of common stock on December 18, 2017 for services rendered                  500,000   9,050           9,050 
                                     
Issuance of common stock on December 25, 2017 for services rendered                  500,000   14,500           14,500 
                                     
Net loss  -   -   -   -   -   -       (2,139,719)  (2,139,719)
                                     
Balance, December 31, 2017  8  $243,537   157,985  $150   225,572,323  $12,524,042  $149,850  $(14,647,476) $(1,729,897)
                                     
Issuance of Series A Preferred Stock in
2018 pursuant to employment and
consulting agreement
  13   4,441,690                           4,441,690 
                                     
Sale of Series B Preferred Stock in 2018          761,972   749           723,126       723,875 
                                     
Issuance of common stock in 2018 for services rendered                  19,345,789   656,306           656,306 
                                     
Issuance of common stock in 2018 for Preferred B dividends                  891,089   38,379       (9,000)  29,379 
                                     
Issuance of common stock in 2018 in Satisfaction of debt and accrued interest                  45,263,513   1,604,412       ,   1,604,412 
                                     
Issuance of common stock in 2018 for Warrant exercise                  8,500,000   619,880           619,880 
                                     
Issuance of common stock in 2018 in Satisfaction of accrued compensation                  4,370,629   192,300           192,300 
                                     
Issuance of common stock in 2018 for Acquisition of PureHealth, LLC                  3,096,827   112,415           112,415 
                                     
Issuance of stock options for retirement Of common shares                  (3,000,000)  (101,400)  84,000       (17,400)
                                     
Issuance of stock options                          118,200       118,200 
                                     
Sale of common stocks in 2018                  29,821,201   850,000           850,000 
                                     
Issuance of common stock and retirement of Series A preferred stock In 2018  (3)  (127,803)          30,000,000   127,803           - 
                                     
Issuance of common stock and retirement of Series B preferred stock In 2018          (419,999)  (420)  76,704,954   420   -       - 
                                     
Net loss                              (4,112,277)  (4,112,277)
                                     
Balance, December 31, 2018  18  $4,557,424   499,958  $479   440,566,325  $16,624,557  $1,075,176  $(18,768,753)  3,488,883 

Canbiola, Inc. and Subsidiary

Consolidated Statements of Cash Flows

  Year Ended December 31, 
  2018  2017 
Operating Activities:        
Net loss $(4,112,277) $(2,139,719)
Adjustments to reconcile net loss to net cash used in operating activities:        
Stock-based compensation, net of prepaid stock- based consulting fees  2,779,300   231,590 
Loss on Forgiveness of receivable from Pure Health Products  85,827   - 
Loss on stock issuance  649,259   191,553 
Loss on debt conversion  1,299,369   32,383 
Debt issuance expense  14,000   - 
Impairment of intangible assets  -   21,507 
Expense from derivative liability  (1,591,137)  915,700 
Depreciation of property and equipment  5,473   3,227 
Amortization of intangible assets  -   3,972 
Amortization of debt discounts  176,497   250,188 
Bad debt expense  -   16,840 
Changes in operating assets and liabilities:        
Accounts receivable  (33,097)  (9,173)
Inventory  2,382   (9,834)
Security deposit  (34,939)  - 
Prepaid expenses  -   2,500 
Accounts payable  (115,235)  88,566 
Accrued officers compensation  85,900   91,803 
Other accrued expenses payable  35,109   22,606 
         
Net cash used in operating activities  (753,569)  (286,291)
         
Investing Activities:        
         
Cash received from acquisition of Pure Health Products, LLC  404   - 
Note receivable - current  -   (75,000)
Fixed assets additions  (46,384)  - 
         
Net cash used in investing activities  (45,980)  (75,000)
         
Financing Activities:        
Repayments of notes and loans payable  (123,231)  - 
Proceeds received from notes and loans payable  155,000   182,750 
Proceeds from sale of common stock  850,000   - 
Proceeds from sale of Series B preferred stock  723,875   150,000 
         
Net cash provided by financing activities  1,605,644   332,750 
         
Increase (decrease) in cash and cash equivalents  806,095   (28,541)
         
Cash and cash equivalents, beginning of period  1,652   30,193 
         
Cash and cash equivalents, end of period $807,747  $1,652 
         
SUPPLEMENTAL CASH FLOW INFORMATION:        
Income taxes paid $-  $- 
Interest paid $-  $- 
         
NON-CASH INVESTING AND FINANCING ACTIVITIES:        
Issuance of common stock in satisfaction of debt $262,000  $115,000 
         
Issuance of common stock in satisfaction Of officers compensation $282,200  $127,803 
         
Issuance of common stock in acquisition of PureHealth, LLC $178,997  $- 
         
Cancellation of note receivable and accrued interest in exchange for service $19,611  $- 
         
Cancellation of note receivable and accrued interest in acquisition of PureHealth, LLC $85,827,25  $- 
         
Issuance of common stock in satisfaction of accrued interest $43,043  $11,168 
  2021  2020 
  Year Ended 
  December 31, 
  2021  2020 
Operating activities:        
Net loss $(12,169,395) $(8,878,904)
Adjustments to reconcile net loss to net cash used in operating activities:        
Goodwill impairment  -   936,875 
Stock-based compensation  2,395,038   2,584,041 
Depreciation  493,656   124,388 
Amortization of intangible assets  48,689   658,910 
Amortization of original-issue-discounts  1,640,242   273,607 
Bad debt expense  61,393   270,919 
Gain from forgiveness of debt  (196,889)  - 
Stock-based interest expense  199,314   451,680 
Loss on disposal of asset  -   (147,863)
Changes in operating assets and liabilities:        
Accounts receivable  (1,705,006)  (1,022,374)
Inventory  (2,208,484)  931,523 
Prepaid expenses  8,476   2,444,272
Other noncurrent assets  7,176   57,974 
Operating lease right-of-use asset  (20,667)  525 
Accounts payable  1,663,102   (627,239)
Accrued expenses  457,033   (5,425)
Net cash used in operating activities  (7,322,732)  (1,947,091)
         
Investing activities:        
Note receivable  -   21,370 
Purchase of property and equipment  (538,763)  (50,219)
Purchase of intangible assets  (177,530)  - 
Deposits paid  

(144,500

)    
Proceeds from disposal of asset  -   3,600 
Net cash used in investing activities  (860,793)  (25,249)
         
Financing activities:        
Proceeds received from notes and loans payable  1,625,000   4,521,618 
Proceeds from issuance of Series D Preferred Stock  2   - 
Proceeds from sale of common stock  6,555,453   300,000 
Repayments of notes and loans payable  (224,000)  (1,359,900)
Deferred financing costs  -   (518,120)
Proceeds received from related parties, net  218,273   - 
Acquisition of treasury stock  -   (560,000)
Net cash provided by financing activities  8,174,728   2,383,598 
         
Decrease in cash and cash equivalents  (8,797)  411,258 
Cash and cash equivalents, beginning of period  457,798   46,540 
Cash and cash equivalents, end of period $449,001  $457,798 
         
Supplemental Cash Flow Information:        
Income taxes paid $1,075  $3,304 
Interest paid $4,000  $206,328 
Non-cash Investing and Financing Activities:        
Issuance of common stock in lieu of repayments of notes payable $537,748  $1,568,109 
issuance of common stock for services rendered $2,657,048  $1,458,485 
Issuance of common stock in asset acquisitions $3,453,014  $217,011 
Assets acquired through common stock payable $

1,750,000

  $- 

Assets acquired through issuance of promissory note

 $

1,250,000

  $- 
Issuance of common stock warrants and commitment shares in connection with convertible promissory note $515,276  $- 
Issuance of common stock for inventory $-  $491,979 

See notes to consolidated financial statements.statements

F-6
 

Canbiola, Inc.

Can B̅ Corp. and SubsidiarySubsidiaries

Notes to Consolidated Financial Statements

Years Ended December 31, 20182021 and 20172020

NOTENote 1 – Organization and Description of Business

Canbiola, Inc.Can B̅ Corp. was originally incorporated as WrapMail, Inc. (“WRAP”) in Florida on October 11, 2005. EffectiveOn May 15, 2017, WRAP changed its name to Canbiola, Inc. On January 5, 2015, WRAP acquired 100% ownership of Prosperity Systems,16, 2020 Canbiola, Inc. (“Prosperity”)changed its name to Can B̅ Corp. (the “Company”, a New York corporation incorporated on April 2, 2008. The Company is in the process of dissolving Prosperity. “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 formedruns 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 are in a Nevada corporation (“Duramed”)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, 2021.

The Company is in November 2018, to facilitate 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 equipment incorporating CBD

Effective December 27, 2010, WRAP effected a 10 for 1 forward stock split of its common stock. Effective June 4, 2013, WRAP effected a 1 for 10 reverse stock split of its common stock. The accompanying consolidated financial statements retroactively reflect these stock splits.

On May 15, 2017, WRAP changed its name to Canbiola, Inc. (the “Company” or “CANB” or “Canbiola”).

Canbiola specializes in the production and sale of a variety of hemp derived Cannabidiol (“CBD”)devises. Can B̅’s products such asinclude oils, creams, moisturizers, isolate, gel caps, concentratespa products, and water. Canbiola is developingconcentrates and lifestyle products. Can B̅ develops its own line of proprietary products as well as seekingseeks synergistic value through acquisitions in the Hemp Industry. Canbiolahemp industry. Can B̅ aims to be the premier provider of the highest quality hemp CBDderived products on the market through sourcing the very best raw material and developingoffering a variety of products we believe will improve people’s lives in a variety of areas.

The Company also operates document management and email marketing platforms. The Company used to operate its document and information platform from its wholly owned subsidiary, Prosperity Systems, Inc; however, after the acquisition of Prosperity, the Company transferred Prosperity’s operations to the Company directly.

For the periods presented, the assets, liabilities, revenues, and expenses are those of CANB. Prosperity and Duramed had no activity for the periods presented. Financial information for PHP from December 28, 2018 to December 31, 2018 has been consolidated with the Company’s financials.

NOTENote 2 – Going Concern UncertaintyLiquidity

The 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 December 31, 2018,2021, the Company had cash and cash equivalents of $807,747 $449,001 and anegative working capital of $939,582. $2,809,418. For the years ended December 31, 20182021 and 2017,2020, the Company had netincurred losses of $4,112,277 $12,169,395 and $2,139,719,$8,878,904, respectively. These factors raise substantial doubt as to the Company’s ability to continue as a going concern. The Company plans to improve its financial condition by raising capital through salesthe sale of shares of its common stock. Also, the Company plans to expand its operation of CBD products to increase its profitability. The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

NOTENote 3 –Basis of Presentation and Summary of Significant Accounting Policies

(a) PrinciplesBasis of Consolidationpresentation

The accompanying consolidated financial statements include the accounts of CANB and its wholly owned subsidiaries, Pure Health products (from its acquisition date of December 28, 2018), Duramed, and Prosperity from the date of its acquisition on January 5, 2015. All intercompany balances and transactions have been eliminated in consolidation.

(b) Use of Estimates

The preparation of financial statementsare presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

On February 8, 2022, the Company effected a 1-for-15 reverse stock split of the Company’s common stock, or the 2021 Reverse Stock Split. As a result of the 2021 Reverse Stock Split, every 15 shares of the Company’s pre-2021 Reverse Stock Split common stock were combined and reclassified into one share of the Company’s common stock.

Principles of Consolidation

The 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.

F-7

Can B̅ Corp. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2021 and 2020

Covid-19

Commencing in December 2019, the novel strain of coronavirus (“COVID-19”) began spreading throughout the world, including the first outbreak in the US in February 2020. On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. COVID-19 has disrupted and continues to significantly disrupt local, regional, and global economies and businesses. The

COVID-19 outbreak is disrupting supply chains and affecting production and sales across a range of industries. The extent of the impact of COVID-19 on the Company’s operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, impact on the Company’s customers, employees and vendors, all of which are uncertain and cannot be predicted. At this point, the extent to which COVID-19 may impact the Company’s financial condition and/or results of operations is uncertain.

In response to COVID-19, the Company put into place certain restrictions, requirements and guidelines to protect the health of its employees and clients, including requiring that certain conditions be met before employees return to the Company’s offices. Also, to protect the health and safety of its employees, the Company’s daily execution has evolved into a largely virtual model. The Company plans to continue to monitor the current environment and may take further actions that may be required by federal, state or local authorities or that it determines to be in the interests of its employees, customers, and partners.

Use of Estimates

The preparation of financial statements 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 at the datesdate of the financial statements and the reported amounts of revenuessales (or revenues) and expenses during the reporting periods. Actualperiod.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that estimates made as of the date of the financial statements could change in the near term due to one or more future events. Accordingly, the actual results could differ significantly from those estimates. Significant accounting estimates reflected in the Company’s consolidated financial statements include, but are not limited to, revenue recognition, allowance for doubtful accounts, recognition and measurement of income tax assets, valuation of share-based compensation, and the valuation of net assets acquired.

(c) Fair Value of Financial InstrumentsAsset Acquisitions

The Company’s financial instruments consist of cash and cash equivalents,When applicable, the Company accounts receivable, notes receivable, notes and loans payable, accounts payable, and accrued expenses payable. Except for the noncurrent note receivable,acquisition of a business in accordance with the accounting standards codification (“ASC”) guidance for business combinations, whereby the total purchase consideration transferred is allocated to the assets acquired and liabilities assumed, including amounts attributable to non-controlling interests, when applicable, based on their respective estimated fair values as of the date of acquisition. Goodwill represents the excess of purchase consideration transferred over the estimated fair value of these financial instruments approximate their carrying amounts reportedthe identifiable net assets acquired in the balance sheets duea business combination.

Assigning estimated fair values to the short term maturitynet assets acquired requires the use of these instruments. Based on comparable instruments with similar terms,significant estimates, judgments, inputs, and assumptions regarding the fair value of the noncurrent note receivable approximates its carrying value.

Pursuantassets acquired and liabilities assumed. Estimated fair values of assets acquired and liabilities assumed are generally based on available historical information, independent valuations or appraisals, future expectations, and assumptions determined to ASC 820, Fair Value Measurementsbe reasonable but are inherently uncertain with respect to future events, including economic conditions, competition, the useful life of the acquired assets, and Disclosures, an entity is requiredother factors. The company may refine the estimated fair values of assets acquired and liabilities assumed, if necessary, over a period not to maximizeexceed one year from the usedate of observable inputsacquisition by taking into consideration new information that, if known at the date of acquisition, would have affected the estimated fair values ascribed to the assets acquired and minimizeliabilities assumed. The judgments made in determining the use of unobservable inputs when measuring fair value. ASC 820 establishes aestimated fair value hierarchy basedassigned to assets acquired and liabilities assumed, as well as the estimated useful life and depreciation or amortization method of each asset, can materially impact the net earnings of the periods subsequent to the acquisition through depreciation and amortization, and in certain instances through impairment charges, if the asset becomes impaired in the future. During the measurement period, any purchase price allocation changes that impact the carrying value of goodwill affects any measurement of goodwill impairment taken during the measurement period, if applicable. If necessary, purchase price allocation revisions that occur outside of the measurement period are recorded within cost of sales or selling, general and administrative expense within the Consolidated Statements of Earnings depending on the levelnature of independent, objective evidence surrounding the inputs usedadjustment.

F-8

Can B̅ Corp. and Subsidiaries

Notes to measure fair value. A financial instrument’s categorization withinConsolidated Financial Statements

December 31, 2021 and 2020

When an acquisition does not meet the fair value hierarchy is based upon the lowest leveldefinition of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1 - applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 - applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 - applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurementa business combination because either: (i) substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset, or group of similar identified assets, or liabilities.

(d) Cash and Cash Equivalents

The Company considers all liquid investments purchased with a maturity of three months or less to be cash equivalents.

(e) Inventory

All inventories are finished goods and stated at(ii) the lower of cost or net realizable value. Cost is principally determined using the first-in, first-out (FIFO) method.

(f) Property and Equipment, Net

Property and equipment, net, is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the respective assets. Maintenance and repairs are charged to operations as incurred.

(g) Intangible Assets, Net

Intangible assets, net, are stated at cost less accumulated amortization. Amortization is calculated using the straight-line method over the estimated economic lives of the respective assets.

(h) Goodwill and Intangible Assets with Indefinite Lives

The Companyacquired entity does not amortizehave an input and a substantive process that together significantly contribute to the ability to create outputs, the company accounts for the acquisition as an asset acquisition. In an asset acquisition, goodwill and intangible assets with indefinite useful lives,is not recognized, but instead tests for impairment at least annually. When conductingrather, any excess purchase consideration over the annual impairment test for goodwill, the Company compares the estimated fair value of a reporting unit containing goodwill to its carrying value. If the estimated fair value of the reporting unitnet assets acquired is determined to be less than its carryingallocated on a relative fair value goodwill is reduced, and an impairment loss is recorded.

(i) Long-lived Assets

The Company reviews long-lived assets held and used, intangible assets with finite useful lives and assets held for sale for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If an evaluation of recoverability is required, the estimated undiscounted future cash flows associated with the asset is comparedbasis to the asset’s carrying amount to determine if a write-down is required. Ifidentifiable net assets as of the undiscounted cash flowsacquisition date and any direct acquisition-related transaction costs are less thancapitalized as part of the carrying amount, an impairment loss is recorded to the extent that the carrying amount exceeds the fair value.purchase consideration.

(j) Revenue Recognition

The Company recognizes revenue in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)ASC 606, Revenue from Contracts with Customers, which requires that five basic steps be followed to recognize revenue: (1) a legally enforceable contract that meets criterial standards as to composition and substance is identified; (2) performance obligations relating to provision of goods or services to the customer are identified; (3) the transaction price, with consideration given to any variable, noncash, or other relevant consideration, is determined; (4) the transaction price is allocated to the performance obligations; and (5) revenue is recognized when control of goods or services is transferred to the customer with consideration given, whether that control happens over time or not. Determination of criteria (3) and (4) are based on our management’s judgments regarding the fixed nature of the selling prices of the products and services delivered and the collectability of those amounts.

Private Label Customers Global CBD, LLC and TZ Wholesale, are wholesale distributors of the Company’s product, under their own wholesale private label brand. The products are made to Company specifications and shipped directly to the wholesaler. The pricing is predicated upon a volume discount negotiated at the time of the placement of the orders. Product is produced and labeled in the Washington manufacturing facility and shipped directly to the Private Label customer who re-distributes to their retail and other customers. The products are fully paid when shipped. For 2018, Global CBD, LLC revenue of $44,602 represents approximately 9% and TZ Wholesale revenue of $17,172 represents approximately 3.5% of total Company revenues for the year ended December 31, 2018.

Revenue from product sales is recognized when an order has been obtained, the price is fixed and determinable, the product is shipped, title has transferred, and collectability is reasonably assured.

Additionally,The Company’s Duramed Division provides a sam® Pro 2.0 medical device to patients through a doctor program whereby the physician evaluates the patients’ needs for medical necessity, and if determined that the device use would be beneficial, writes a prescription for the patient who signs a rental form, for a 35-day cycle for the unit, that is submitted to Duramed who bills the appropriate insurance company. The insurance company pays the invoice, or a negotiated amount via arbitration, and that revenue is reported as revenue when invoiced to the insurance carrier. The collected amount is reconciled with the invoice amount on a daily basis.

Freight billed to customers is included within sales on the consolidated statement of operations. The related freight charged to the Company also generates revenueis included within cost of revenues. Sales tax collected from email marketing and cloud service providedcustomers is remitted to several existing customers. The service revenue is recognized over agreed periods of services delivered to customers, provided there are no uncertainties regarding customer acceptance, persuasive evidence of an arrangement exists; the sales price is fixed or determinable; and collectability is deemed probable.governmental authorities on a net basis.

(k) Cost of Product SalesRevenues

The cost of product salerevenues is the total cost incurred to obtain a sale and the cost of the goods sold, and the Company’s policy is to recognize it in the same manner as, and in conjunction with, revenue recognition. Cost of product salerevenues primarily consistedconsist of the costs directly attributable to revenue recognized and includes expenses related to the production, packaging and labeling of our CBD products.

(l) Stock-Based Compensation

F-9

Can B̅ Corp. and Subsidiaries

Stock-based compensationNotes to Consolidated Financial Statements

December 31, 2021 and 2020

Cash, cash equivalents and restricted cash

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

Accounts receivables, net

Trade receivables arise from granting credit to customers in the normal course of business, are unsecured and are presented net of an allowance for doubtful accounts. The allowance is accounted for at fair value in accordance with Accounting Standards Codification (“ASC”) Topic 718, “Compensation – Stock Compensation” (“ASC718”)based on a number of factors, including the length of time the receivable is past due, the Company’s previous loss history, the customer’s current ability to pay, and ASC 505-50, “Equity – Based Payments to Non-Employees.”

In addition to requiring supplemental disclosures, ASC 718 addresses the accounting for share-based payment transactions in which a company receives goods or services in exchange for (a) equity instrumentsgeneral condition of the company or (b) liabilitieseconomy and industry as a whole. Depending on the customer, payment is due between 30 and 60 days after the customer receives an invoice. Accounts that are more than 45 days past due are individually analyzed for collectability. When all collection efforts have been exhausted, the accounts are written off. Historically, the Company has not suffered significant losses with respect to its trade receivables.

Inventories

Inventories, which consist of purchased components for resale, are valued at the lower of average cost (which approximates the first-in, first-out method) and net realizable value. The Company reduces the carrying value of inventory for those items that are potentially excess, obsolete or slow-moving based on changes in customer demand, technology developments or other economic factors.

Long-lived assets

Property and equipment are recorded at cost and presented net of accumulated depreciation. Major additions and betterments are capitalized while maintenance and repairs, which do not improve or extend the life of the respective assets, are expensed. Property and equipment are depreciated on the straight-line basis over their estimated useful lives.

Definite-lived intangible assets arising from asset acquisitions include intellectual property, patents, trademarks, and certain hemp processing registrations. Definite-lived intangible assets are amortized over the estimated period during which the asset is expected to contribute directly or indirectly to future cash flows.

The Company reviews its long-lived assets for impairment whenever events or circumstances exist that indicate the carrying amount of an asset or asset group may not be recoverable. The recoverability of long-lived assets is measured by a comparison of the carrying amount of the asset or asset group to the future undiscounted cash flows expected to

be generated by that asset group. If the asset or asset group is considered to be impaired, an impairment loss would be recorded to adjust the carrying amounts to the estimated fair value. No such impairment was recorded during the periods covered by this report.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the company’s equity instrumentsnet identifiable assets acquired in a business combination. Goodwill is reviewed for impairment at least annually, in December, or that may be settled by the issuancemore frequently if a triggering event occurs between impairment testing dates. As of such equity instruments. ASC 718 focuses primarily on accounting for transactions in which a company obtains employee services in share-based payment transactions.

In accordance with ASC 505-50,December 31, 2021, the Company determinesoperated as a single operating segment and as a single reporting unit for the purpose of evaluating goodwill impairment.

The Company’s impairment assessment begins with a qualitative assessment to determine whether it is more likely than not that the fair value of the stockreporting unit is less than its carrying value. Qualitative factors may include, macroeconomic conditions, industry and market considerations, cost factors, and other relevant entity and Company specific events. If, based payment as eitheron the qualitative test, the Company determines that it is “more likely than not” that the fair value of a reporting unit is less than its carrying value, then a goodwill impairment test using quantitative assessments must be performed. If it is determined that it is “not likely” that the fair value of the consideration received orreporting unit is less than its carrying value, then no further testing is required.

F-10

Can B̅ Corp. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2021 and 2020

The selection and assessment of qualitative factors used to determine whether it is more likely than not that the fair value of a reporting unit exceeds the equity instruments issued, whichevercarrying value involves significant judgment and estimates. If it is determined under the qualitative assessment that it is more reliably measurable.likely than not that the fair value of a reporting unit is less than its carrying value, then the estimated fair value of the Company would be compared with its carrying value (including goodwill). If the fair value of the equity instruments issued is used, it is measured usingCompany exceeds its carrying value, step two does not need to be performed. If the stock price and other measurement assumptions as of the earlier of either (1) the date at which a commitment for performance by the counterparty to earn the equity instrument is reached, or (2) the date at which the counterparty’s performance is complete.

Options and warrants

Theestimated fair value of stock optionsthe Company is less than its carrying value, an indication of goodwill impairment exists for the Company and warrantsit would need to perform step two of the impairment test. Under step two, an impairment loss would be recognized for any excess of the carrying amount of the Company’s goodwill over its fair value. Fair value of the Company under the two-step assessment is estimateddetermined using a combination of both income and market-based approaches. No goodwill impairments were identified for the periods covered by this report.

Leases

The Company determines if an arrangement is or contains a lease at contract inception. In arrangements that involve an identified asset, there is also judgment in evaluating if we have the right to direct the use of that asset.

The Company does not have any finance leases. Operating leases are recorded in our consolidated balance sheets. Right-of-use (“ROU”) assets and lease liabilities are measured at the lease commencement date based on the measurement datepresent value of the remaining lease payments over the lease term, determined using the Black-Scholes model withdiscount rate for the following assumptions, which are determinedlease at the beginningcommencement date. Because the rate implicit in our leases is not readily determinable, we use our incremental borrowing rate as the discount rate, which approximates the interest rate at which we could borrow on a collateralized basis with similar terms and payments and in similar economic environments. As of each year and utilized in all calculations for that year:

Risk-Free Interest Rate.
We utilized the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected term of our awards.
Expected Volatility.
We calculate the expected volatility based on a volatility index of peer companies as we did not have sufficient historical market information to estimate the volatility of our own stock.
Dividend Yield.
We have not declared a dividend on its common stock since its inception and have no intentions of declaring a dividend in the foreseeable future and therefore used a dividend yield of zero.
Expected Term.
The expected term of options granted represents the period of time that options are expected to be outstanding. We estimated the expected term of stock options by using the simplified method. For warrants, the expected term represents the actual term of the warrant.
Forfeitures.
Estimates of option forfeitures are based on our experience. We will adjust our estimate of forfeitures over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of compensation expense to be recognized in future periods.

(m) Advertising

Advertising costs are expensed as incurred and amounted to $84,316 and $28,322 for the year ended December 31, 20182021, our leases had remaining lease terms of up to 4 years, some of which included options to extend the lease for up to 14 years and 2017, respectively.options to terminate the lease within 1 year. Optional periods to extend the lease, including by not exercising a termination option, are included in the lease term when it is reasonably certain that the option will be exercised. Operating lease expense is recognized on a straight-line basis over the lease term. We account for lease and non-lease components, principally common area maintenance for our facilities leases, as a single lease component.

(n) Research and DevelopmentIn accordance with accounting requirements, leases with an initial term of 12 months or less are recorded on the balance sheet, with lease expense for these leases recognized on a straight-line basis over the lease term.

Research and development costs are expensed as incurred. In fiscal year 2017 and 2018, the Company spent $37,000 and $75,000 in research and development which was expenses as spent, respectively.Income taxes

(o) Income Taxes

Income taxes are accounted for under the asset and liability method pursuant to ASC Topic 740, Income Taxes (ASC 740), whereby deferred tax assets and liability method. Current income taxesliabilities are provided in accordance with the laws of the respective taxing authorities. Deferred income taxes are providedrecognized for the estimatedexpected future tax consequences attributable to the differences between the financial statement carrying amounts and the tax basis of existingassets and liabilities. The effect of a change in tax rates on deferred tax assets and liabilities and their respectiveis recognized in the period of the change. Further, deferred tax bases andassets are recognized for the expected realization of available net operating loss and tax credit carryforwards. DeferredA valuation allowance is recorded on gross deferred tax assets when it is “more likely than not” that such asset will not be realized. When evaluating the realizability of deferred tax assets, all evidence, both positive and liabilities are measured using enacted tax ratesnegative, is evaluated. Items considered in effect forthis analysis include the year in which thoseability to carry back losses, the reversal of temporary differences, are expected to be recovered or settled. Deferredtax planning strategies, and expectations of future earnings. The Company reviews its deferred tax assets are reduced byon a quarterly basis to determine if a valuation allowance when,is required based upon these factors. Changes in the opinionCompany’s assessment of management, itthe need for a valuation allowance could give rise to a change in such allowance, potentially resulting in additional expense or benefit in the period of change.

The Company’s income tax provision or benefit includes U.S. federal, state and local income taxes and is not morebased on pre-tax income or loss. In determining the annual effective income tax rate, the Company analyzed various factors, including its annual earnings and taxing jurisdictions in which the earnings were generated, the impact of state and local income taxes, and its ability to use tax credits and net operating loss carryforwards.

F-11

Can B̅ Corp. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2021 and 2020

Under ASC 740, the amount of tax benefit to be recognized is the amount of benefit that is “more likely than not that some portion ornot” to be sustained upon examination. The Company analyzes its tax filing positions in all of the deferredU.S. federal, state, local,

and foreign tax assets will be realized.

jurisdictions where it is required to file income tax returns, as well as for all open tax years in these jurisdictions. If, based on this analysis, the Company determines that uncertainties in tax positions exist, a liability is established in the consolidated financial statements. The Company has adoptedrecognizes accrued interest and penalties related to unrecognized tax positions in the provisions requiredprovision for income taxes.

The Company’s income tax returns are subject to examination by federal and state authorities in accordance with prescribed statutes.

Stock-based compensation

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation (“ASC 718”), by recognizing compensation expense based upon the Income Taxes topicestimated fair value of the FASB Accounting Standards Codification.awards on the date of grant. The Codification Topic requiresCompany determines the recognitionestimated grant-date fair value of potential liabilities as a resultrestricted shares using the closing price on the date of management’s acceptancethe grant and the grant-date fair value of potentially uncertain positions for income tax treatmentstock options using the Black-Scholes-Merton model. In order to calculate the fair value of the options, certain assumptions are made regarding the components of the model, including risk-free interest rate, volatility, expected dividend yield and expected option life. Changes to the assumptions could cause significant adjustments to the valuation. The Company recognizes compensation costs ratably over the period of service using the straight-line method.

Due to the limited trading history of the Company’s common stock, estimated volatility was based on a “more-likely-than-not” probabilitypeer group of an assessment upon examination by a respective taxing authority. The Company believes that it has not taken any uncertain tax positionspublic companies and thus has not recorded any liability.took into consideration the increased short-term volatility in historical data due to COVID-19.

(p) Net Income (Loss)loss per Commoncommon share

Pursuant to ASC Topic 260, Earnings Per Share

Basic, basic net income (loss)loss per common share is computed on the basis ofby dividing net loss by the weighted average number of common shares outstanding during the period.reporting periods, including vested but undelivered stock options.

Diluted net income (loss)loss per common share is computedbased on the basis of the weighted average number of common shares and dilutive securities (such as stock options and convertible securities) outstanding. Dilutive securities having an anti-dilutive effect on diluted net income (loss) per share are excluded from the calculation. Foroutstanding during the periods presented,plus the effect, if any, of the potential exercise or conversion of securities, such as warrants and restricted stock units that would cause the issuance of additional shares of common stock. In computing the basic and diluted net loss per share calculation excludedapplicable to common stockholders during the effect of Series B preferred stocks and stock options outstanding (see Notes 7, 8 and 10).

(q) Recent Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers” (Topic 606) which establishes revenue recognition standards. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017. The impact of ASU 2014-09 on the Company’s financial statements has not been significant.

In 2016, the FASB issued ASU 2016-2 (Topic 842) which establishes a new lease accounting model for lessees. Under the new guidance, lessees will be required to recognize right of use assets and liabilities for most leases having terms of 12 months or more. ASU 2016-2 is effective for fiscal years beginning after December 15, 2018.

The impact on the Company’s financial statements has not yet been determined.

(r) Reclassifications

Certain amountslisted in the prior year consolidated financial statements have been reclassified to conformof operations, the weighted average number of shares are the same for both basic and diluted net loss per share due to the current year presentation. These reclassification adjustments had no effect onfact that when a net loss exists, dilutive shares are not included in the Company’s previously reportedcalculation as the impact is anti-dilutive. An anti-dilutive impact is an increase in earnings per share or a decrease in net income.

NOTE 4 – Acquisition of Pure Health Products, LLC

Effective December 28, 2018, CANB acquired 100% ownership of Pure Health Products, LLC (“Pure Health”) in exchange forloss per share that would result from the cancellation of CANB’s $75,000 note receivable from Pure Health and $10,827 accrued interest thereon andconversion, exercise, or issuance of 3,096,827 newly issued sharescertain contingent securities.

Concentration of CANB common stock (valued atbusiness and credit risk

Financial instruments, which potentially subject the $0.0578 closing trading price onCompany to concentrations of credit risk, consist primarily of cash and cash equivalents and accounts receivable. Cash held by the Company, in financial institutions, regularly exceeds the federally insured limit of $250,000. At December 28, 201831, 2021 and 2020, cash balances held with a financial institution exceeded the federally insured limit. However, management does not believe this poses a significant credit risk.

No customer accounted for more than 10% of sales or $178,997, see Note 11). The acquisition has been accounted foraccounts receivable in each of the periods presented in the accompanying consolidated financial statements asstatements.

Fair value of financial instruments

Fair value is the price that would be received from selling an asset or paid to transfer a purchase transaction. Accordingly,liability in an orderly transaction between market participants at the financial position and results of operations of Pure Health prior tomeasurement date. When determining the date of the acquisition have been excluded from the accompanying consolidated financial statements.

The estimated fair values of the identifiable net assets of Pure Health at December 28, 2018 (effective date of acquisition), after cancellation of the $75,000 note payable to CANB and $10,827 accrued interest thereon, consisted of:

Cash and cash equivalents $404 
Accounts receivable from CANB  16,676 
Inventory  79,652 
Property and equipment, net  7,559 
Security deposit  2,100 
     

Total assets

  106,391 
     
Accounts payable, including $34,419 due to CANB  49,825 
     
Total liabilities  49,825 
     
Identifiable net assets $56,566 

Goodwill of $55,849 (excess of the $112,415 fair value ofmeasurements for assets and liabilities required or permitted to be recorded at fair value, the 3,096,827 shares of CANB common stock issued to Pure Health’s stockholders overCompany considers the $56,566 identifiable net assets of Pure Health at December 28, 2018 after reflectingprincipal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the $85,827 cancellation of the $75,000 note payable and $10,827 accrued interest) was recorded from the acquisition.asset or liability.

The following pro forma information summarizes the results of operations for the periods indicated as if the acquisition occurred at December 31, 2016. The pro forma information is not necessarily indicative of the results that would have been reported had the transaction actually occurred on December 31, 2016, nor is it intended to project results of operations for any future period.

  Year Ended 
  December 31, 
  2018  2017 
       
Product sales $651,978  $90,634 
Cost of product sales  224,894   62,958 
Gross profit on product sales  427,084   27,676 
Service revenue  16,625   43,716 
         
Total gross profit  443,709   71,392 
         
Operating expenses  4,674,321   812,365 
         
Loss from operations  (4,203,613)  (740,973)
         
Other income (loss) - net  (2,671,581)  (1,428,783)
         
Net loss $(6,875,194) $(2,169,756)
         
Net loss per common share- basic and diluted $(0.02) $(0.01)
         
Weighted average common shares outstanding –        
Basic  276,026,704   165,230,550 
Diluted  423,881,781   256,295,851 

F-12
 

NOTE 5 – Inventories

Can B̅ Corp. and Subsidiaries

Inventories consist of:Notes to Consolidated Financial Statements

  December 31,
2018
  December 31,
2017
 
Raw materials $79,652  $- 
         
Finished goods  7,452   9,834 
Total $87,104  $9,834 

December 31, 2021 and 2020

NOTE 6 –

ASC Topic 820, Fair Value Measurements and Disclosures provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows:

Level 1 — inputs are based upon unadjusted quoted prices for identical assets or liabilities traded in active markets.
Level 2 — inputs are based upon quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 — inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

Assets measured at fair value on a non-recurring basis include goodwill, and tangible and intangible assets. Such assets are reviewed annually for impairment indicators. If a triggering event has occurred, the assets are re-measured when the estimated fair value of the corresponding asset group is less than the carrying value. The fair value measurements, in such instances, are based on significant unobservable inputs (Level 3).

The carrying amounts of the Company’s financial instruments, which include accounts receivables, accounts payable and accrued expenses and debt at floating interest rates, approximate their fair values, principally due to their short-term nature, maturities or nature of interest rates.

Advertising and vendor considerations

Advertising costs are expensed as incurred.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

Segment reporting

The Company operates as a single operating 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.

Recently Adopted Accounting Pronouncements

The Financial Accounting Standards Board (“FASB”) issued the following accounting pronouncement which became effective for the Company in 2021, and which did not have a material impact on its condensed consolidated financial statements:

F-13

Can B̅ Corp. and Subsidiaries

Notes Receivableto Consolidated Financial Statements

December 31, 2021 and 2020

Notes receivable consist of:

  December 31,
2018
  December 31,
2017
 
Secured Promissory note dated October 17, 2017 due from Pure Health Products, LLC (“PHP”), interest at 12% per annum, due October 17, 2018, secured by assets of PHP. Cancelled in acquisition of Pure Health Products, LLC $-  $75,000 
         
Note receivable dated November 30, 2015 from Stock Market Manager, Inc, interest at 3% per annum due November 30, 2020  19,389   39,000 
         
Total  19,389   114,000 
         
Current portion of notes receivable  -   (75,000)
Noncurrent portion of notes receivable $19,389  $39,000 

PursuantIn December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which modifies ASC 740 to simplify the accounting for income taxes. ASU 2019-12 addresses the accounting for hybrid tax regimes, tax basis step-up in goodwill obtained in a transaction that is not a business combination, separate financial statements of legal entities not subject to tax, intraperiod tax allocation exception to incremental approach, ownership changes in investments - changes from a subsidiary to an optionequity method investment, ownership changes in investments - changes from an equity method investment to a subsidiary, interim period accounting for enacted changes in tax law and year-to-date loss limitation in interim period tax accounting.

Recently issued accounting standards

To date, there have been no recent accounting pronouncements not yet effective that have significance, or potential significance, to our consolidated financial statements.

Note 4 – Asset Acquisitions

Botanical Biotech Asset Acquisition

On March 11, 2021, Company entered into an Asset Acquisition Agreement, dated November 10, 2017,which was fully executed on March 17, 2021, with multiple sellers (each, a “Seller” and, collectively, the “Sellers”), pursuant to which the Sellers agreed to sell certain assets to Company, and to transfer such assets to Botanical Biotech, LLC, a newly-formed, wholly-owned subsidiary of the Company has an option expiring November 10, 2027 to purchase(“Transferee” or “BB”). The assets purchased (“BB Assets”) include certain specified assetsmaterials and manufacturing equipment, marketing or promotional designs, brochures, advertisements, concepts, literature, books, media rights, rights against any other person or entity in respect of Pure Healthany of the foregoing and all other promotional properties, in each case primarily used, developed or acquired by the Sellers for $75,000,use in connection with the ownership and operation of the BB Assets. In exchange for the BB Assets the Company will pay the Seller a maximum of $355,057, payable via cancellationhalf in the form of Pure Health’s obligations under the Secured Promissory Note or in cash or cash equivalent.

Stock Market Manager, Inc is affiliated with Carl Dilley, a Company director. In 2018,equivalent and half in the form of restricted shares of common stock of the Company received services from(the “Shares”) at a price per Share equal to the average closing price of the common stock of the Company during the ten (10) consecutive trading days immediately preceding the closing. The Company has agreed to indemnify the Sellers for certain breaches of covenants, representations and warranties and for claims relating to the BB Assets following closing.

In conjunction with the BB asset acquisition, the Company entered into employment agreements with two sellers.

The Company and BB entered into an employment agreement with Lebsock dated March 11, 2021 (the “Lebsock Agreement”) pursuant to which Lebsock will serve as the President of BB for a term of three (3) years. The term of the Lebsock Agreement will automatically renew for an additional 3-year term unless other terminated by either party.

Lebsock will receive a base salary equal to $120,000 per year, subject to an annual increase of not less than 3% on each anniversary of the Lebsock Agreement during the term. The Company also agreed to issue a stock bonus to Lebsock in accordance with the Company’s Incentive Stock Market ManagerOption Plan (“ISOP”) in an amount of $100,000, and to pay Lebsock a defined percentage of the EBITDA for BB each calendar quarter (“Profit Split”) according to a mutually agreed performance target (“Target”). EBITDA is defined as the earnings before interest, depreciation, taxes, depreciation, and amortization and will be paid as reported by the Company’s accountant and as reviewed by the Company’s auditor. It will be accumulative on a quarter-to-quarter basis, meaning if one quarter has a negative EBITDA, it would be offset against the following quarter’s positive EBITDA distribution. Lebsock has the option to accept the Profit Split in either direct cash payment or Shares, or any combination, at Lebsock’s option. Shares would be valued at $19,611the prior 10-day closing price and issued under SEC Rule 144 restriction.

Effective March 16, 2021, BB entered into a Consulting Agreement (the “Schlosser Agreement”) with Schlosser pursuant to which Schlosser has agreed to provide consulting services to BB for a period of 3 months in exchange for the cancellation of $19,611 in note receivables.

NOTE 7 – Property and Equipment, Net

Property and Equipment, net, consist of:

  December 31,  December 31, 
  2018  2017 
       
Furniture & Fixtures $19,018  $19,018 
         
Office Equipment  20,992   12,378 
         
Manufacturing Equipment  46,384   - 
         
Total  86,394   31,396 
         
Accumulated amortization  (26,775)  (20,248)
         
Net $59,619  $11,148 

NOTE 8 – Intangible Assets, Net

Intangible assets, net, consist of:

  December 31,  December 31, 
  2018  2017 
       
Video conferencing software acquired by Prosperity in December 2009 $30,000  $30,000 
         
Enterprise and audit software acquired by Prosperity in April 2008  20,000   20,000 
         
Patent costs incurred by WRAP  6,880   6,880 
         
Other  3,548   3,548 
         
Total  60,428   60,428 
         
Accumulated amortization and Impairment  (60,428)  (60,428)
         
Net $0  $0 

The above intangible assets relatecompensation equal to $10,000 per month. Schlosser will also be entitled to reimbursement for certain work-related expenses. Pursuant to the document managementSchlosser Agreement, Schlosser also agreed to assign to BB all inventions developed by Schlosser in connection with his services to BB. The Schlosser Agreement also contains certain non-compete and email marketing divisions. At December 31, 2017, we do not expect any future positive cash flow from these divisions. Accordingly, we have recordedconfidentiality provisions. Per the Acquisition Agreement, Schlosser was to receive an impairment expense of $21,509 at December 31, 2017employment agreement similar to the Lebsock Agreement; however, BB and reducedSchlosser elected to enter into the net carrying value of these intangible assets to $0.Schlosser Agreement instead.

F-14
 

Can B̅ Corp. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2021 and 2020

CO Botanicals Asset Acquisition

On August 12, 2021, The Company and CO Botanicals LLC (“COB”), a newly-formed, wholly-owned subsidiary of the Company entered into an Equipment Acquisition Agreement (the “TWS Agreement”) with TWS Pharma, LLC,

(“TWS Pharma”) and L7 TWS Pharma, LLC (“L7 TWS” and, collectively with TWS Pharma, “TWS”). Pursuant to the TWS Agreement, COB agreed to purchase certain equipment and other assets from TWS (the “TWS Assets”) for a total purchase price equal to $5,316,774, with $1,250,000 payable via a 12-month promissory note issued by the Company to TWS Pharma with 6% simple interest and monthly payments of $100,000 due per month (the “TWS Note”), and $4,066,774 payable in shares of the Company’s common stock valued at $0.62 per share (the “TWS Shares”); provided, however, that $1,750,000 of the TWS Shares will be withheld in escrow for a period of ninety (90) days from the closing date, which will be deducted from the purchase price should the Company discover any defects or misrepresentations. The first $500,000 of payments of the TWS Note will be secured by 1,000,000 shares of the Company’s common stock to be held in escrow.

TN Botanicals Asset Acquisition

On August 13, 2021 the Company and TN Botanicals LLC (“TNB”), a newly-formed, wholly-owned subsidiary of the Company, entered into an Asset Purchase Agreement (the “MCB Agreement”) with Music City Botanicals, LLC, pursuant to which TNB agreed to purchase certain equipment, other assets, and intellectual property from MCB (the “MCB Assets”) for a total purchase price equal to $1,394,324, with $498,259 payable in cash and $896,065 payable in shares of the Company’s common stock valued at $0.62 per share (the “MCB Shares”).

Imbibe Health Solutions Asset Acquisition

On February 22, 2021, Can B̅ Corp. (the “Company”) entered into a material definitive agreement (“Acquisition Agreement”) with Imbibe Health Solutions, LLC, a Delaware limited liability company (“Imbibe”), pursuant to which Imbibe agreed to sell certain of its assets to the Company. The assets to be purchased (“Assets”) include the intellectual property rights and other intangible assets relating to its branded products containing CBD. In exchange for the Assets, the Company has agreed to pay Imbibe $102,501 in the form of shares of common stock of the Company (with standard restricted legend, the “Shares”) at a price per share equal to the average price of the common stock of the Company during the ten (10) consecutive trading days immediately preceding the closing. The transaction finalized and the shares were issued in exchange for the assets on November 7, 2021.

Note 5 – Inventories

Inventories consist of:

Schedule of Inventories

  December 31,  December 31, 
  2021  2020 
Raw materials $818,042  $294,522 
Finished goods  1,735,396   50,432 
Total $2,553,438  $344,954 

F-15

Can B̅ Corp. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2021 and 2020

Note 6 – Property and Equipment

Property and equipment consist of:

Schedule of Property and Equipment

  December 31,  December 31, 
  2021  2020 
Furniture and fixtures $21,724  $21,727 
Office equipment  12,378   12,378 
Manufacturing equipment  7,018,522   397,230 
Medical equipment  776,396   776,392 
Leasehold improvements  26,902   26,902 
Total  7,855,922   1,234,629 
Accumulated depreciation  (802,996)  (239,650)
Net $7,052,926  $994,979 

Depreciation expense related to property and equipment was $493,656 and $124,388 for the years ending December 31, 2021 and 2020, respectively.

Note 7 – Goodwill and Intangible Assets

Intangible assets consist of:

Schedule of Intangible Assets

  December 31,  December 31, 
  2021  2020 
Technology, IP and patents $418,003  $- 
Total  418,003   - 
Accumulated amortization  (48,988)  -
Total $369,015  $    - 

Amortization expense, related to technology, IP, and patents was $48,689 and $658,910 for the years ended December 31, 2021 and 2020, respectively.

Amortization expense for each of the next five years ending and thereafter is estimated to be as follows:

Schedule of Estimated Amortization Expenses

Years ending December 31,    
2022 $51,352 
2023  51,352 
2024  51,352 
2025  46,499 
2026  43,033 
Thereafter  125,428 
Total $369,015 

During the year ended December 31, 2020, the Company recorded a noncash goodwill impairment charge of $55,849.

F-16

Can B̅ Corp. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2021 and 2020

NOTE 9Note 8Notes and Loans Payable

Notes and loans payable consist of:      
  December 31,
2018
  December 31,
2017
 
       
Convertible notes payable to lender dated from March 15, 2016 (as amended June 2, 2016) to November 15, 2017, interest at rates ranging from 12% to 14.99% per annum, due from April 6, 2017 to May 15, 2018, partially converted at March 22, 2017 and the remaining notes convertible into Common Stock at a Conversion Price equal to the lesser of (i) $0.01 per share or (ii) 50% of the lowest Closing Bid Price of the Common Stock for the 30 Trading Days preceding the Conversion Date – net of unamortized debt discount of $0 and $1,815, respectively-fully converted on August 31, 2018  -   36,685 
         
Convertible notes payable to lender dated February 1, 2016 (as amended
December 21, 2016) and December 21, 2016, interest at 12% per
annum, due February 1, 2017 and May 20, 2017, convertible into
Common Stock at a Conversion Price equal to the lesser of (i) $0.01 per
share or (ii) 50% of the lowest Closing Bid Price of the Common Stock
for the 30 Trading Days preceding the Conversion Date – net of
unamortized debt discount of $0 and $0, respectively. The note date dated
February 1, 2016 was fully converted at June 11, 2018 while note dated December 21, 2016 was fully converted at September 7, 2018
  -   65,000 
         
Convertible notes payable to Pasquale and Rosemary Ferro dated from
May 2, 2017 to August 10, 2018, interest at 12% per annum, due at June
30, 2020 (as amended August 13, 2018), convertible into Common Stock
at a Conversion Price equal to the lesser of (i) $0.01 per share or (ii) 50%
of the lowest Closing Bid Price of the Common Stock for the 30 Trading
Days preceding the Conversion Date – net of unamortized debt discount
of $25,009 and $19,613, respectively. The notes were fully converted at
August 9, 2018 and December 21, 2018.
  -   73,887 
         
Convertible note payable to lender dated August 8, 2017 interest at 12% per annum, due August 8, 2018, convertible into Common Stock at a
Conversion Price equal to the lesser of (i) $0.01 per share or (ii) 50% of
the lowest Closing Bid Price of the Common Stock for the 30 Trading
Days preceding the Conversion Date – net of unamortized debt discount
of $0 and $15,068, respectively. The notes were fully converted at
August 31, 2018.
  -   9,932 
         
Convertible note payable to lender dated June 6, 2018, interest at 12% per
annum, due March 6, 2019, convertible into Common Stock at a
Conversion Price equal to the lesser of 55% of the lowest Closing Bid
. Price of the Common Stock for the 25 Trading Days preceding the
(i) Inception date or (ii) the Conversion Date – net of unamortized debt
discount of $57,509 and $0, respectively. The note was fully paid off at
October 19, 2018.
  -   - 
         
Note payable to brother of Marco Alfonsi, Chief Executive Officer of the Company, interest at 10% per annum, due August 22, 2016 (now past due)  5,000   5,000 
         
Note payable to Carl Dilley, a director of the Company, interest at 12.99% per annum, due February 1, 2021  10,899   - 
         
Loan payable to Mckenzie Webster Limited (“MWL”), an entity controlled by the former Chairman of the Board of Directors of the Company, non-interest bearing, due on demand  3,000   3,000 
Total $18,899  $193,504 

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 principal balance of the note is $2,675,239 and it is to be utilized for working capital purposes. The note matures on January 31, 2022 and all principal, accrued and unpaid interest is due at maturity at a rate of 12% per annum. The conversion options contained in the convertible promissory note were evaluated for derivative liabilityaccounting under ASC 815, Derivatives and Hedging, and determined not to be considered a derivative and therefore has been recorded in liabilities as part of the convertible notes payable consists of:

  December 31, 2018  December 31, 2017 
  Face Value  Derivative Liability  Face Value  Derivative Liability 
             
Convertible notes payable to lender dated from March 15, 2016 (as amended June 2, 2016) to November 15, 2017, due from April 6, 2017 to May 15, 2018. Fully converted on August 31, 2018 $-  $-   38,500   248,597 
                 
Convertible notes payable to lender dated February 1, 2016 (as amended December 21, 2016) and December 21, 2016, due February 1, 2017 and May 20, 2017. The notes were fully converted at June 11, 2018 and September 7, 2018  -   -   65,000   418,889 
                 
Convertible notes payable to Pasquale and Rosemary Ferro dated from May 25, 2017 to January 8, 2018, due at June 30, 2020 (as amended August 13, 2018),  -   -   93,500   611,886 
                 
Convertible notes payable to lender dated June 6, 2018, due March 6, 2019. Fully paid off at October 19, 2018.  -   -   -   - 
Convertible notes payable to lender dated August 8, 2017, due August 8, 2018. Fully converted at August 31, 2018  -   -   25,000   171,765 
Totals $-  $-  $222,000  $1,451,137 

promissory note and not bifurcated. In addition, the ASOP convertible promissory note was issued with 3,426,280 common stock warrants. The abovecommon stock purchase warrants entitle the holder to purchase an aggregate of up to 3,426,280 shares of the Company’s common stock at an exercise price of $0.45 per share. The common stock purchase warrants issued to ASOP are considered derivatives, but satisfied the criteria for classification as equity instruments, and were bifurcated from the host contract - convertible notespromissory note and recorded in equity at their relative fair values with a corresponding debt discount recorded to ASOP Note I. Aggregate amortization of the original issue discount for the years ended December 31, 2021 and 2020 was approximately $679,000 and $0, respectively. The principal balance outstanding at December 31, 20172021 was $2,286,792.

In December 2020, the Company entered into a convertible promissory note (“ASOF Note I”) with Arena Special Opportunities Fund, LP (“ASOF”). The principal balance of the note is $102,539 and it is to be utilized for working capital purposes. The note matures on January 31, 2022 and all principal, accrued and unpaid interest is due at maturity at a rate of 12% per annum. The conversion options contained in the convertible promissory note were evaluated for derivative accounting under ASC 815, Derivatives and Hedging, and determined not to be considered a variablederivative and therefore has been recorded in liabilities as part of the convertible promissory note and not bifurcated. In addition, the ASOF convertible promissory note was issued with 131,325 common stock warrants. The common stock purchase warrants entitle the holder to purchase an aggregate of up to 131,325 shares of the Company’s common stock at an exercise price of $0.45 per share. The common stock purchase warrants issued to ASOF are considered derivatives, but satisfied the criteria for classification as equity instruments, and were bifurcated from the host contract - convertible promissory note and recorded in equity at their relative fair values with a corresponding debt discount recorded to ASOF Note I. Aggregate amortization of the original issue discount for the years ended December 31, 2021 and 2020 was approximately $26,000 and $0, respectively. The principal balance outstanding at December 31, 2021 was $87,773.

In May 2021, the Company entered into a convertible promissory note (“ASOP Note II”) with Arena Special Opportunities Partners I, LP. The principal balance of the note is $1,193,135 and it is to be utilized for working capital purposes. The note matures on January 31, 2022and all principal, accrued and unpaid interest is due at maturity at a rate of 12% per annum. The conversion feature basedoptions contained in the convertible promissory note were evaluated for derivative accounting under ASC 815, Derivatives and Hedging, and determined not to be considered a derivative and therefore has been recorded in liabilities as part of the convertible promissory note and not bifurcated. In addition, the ASOP convertible promissory note was issued with 1,529,670 common stock warrants. The common stock purchase warrants entitle the holder to purchase an aggregate of up to 1,529,670 shares of the Company’s common stock at an exercise price of $0.45 per share. The common stock purchase warrants issued to ASOP are considered derivatives, but satisfied the criteria for classification as equity instruments, and were bifurcated from the host contract - convertible promissory note and recorded in equity at their relative fair values with a corresponding debt discount recorded to ASOP Note II. Aggregate amortization of the original issue discount for the years ended December 31, 2021 and 2020 was approximately $464,000 and $0, respectively. The principal balance outstanding at December 31, 2021 was $1,193,135.

In May 2021, the Company entered into a convertible promissory note (“ASOF Note II”) with Arena Special Opportunities Fund, LP. The principal balance of the note is $306,865 and it is to be utilized for working capital purposes. The note matures on January 31, 2022 and all principal, accrued and unpaid interest is due at maturity at a rate of 12% per annum. The conversion options contained in the convertible promissory note were evaluated for derivative accounting under ASC 815, Derivatives and Hedging, and determined not to be considered a derivative and therefore has been recorded in liabilities as part of the convertible promissory note and not bifurcated. In addition, the ASOP convertible promissory note was issued with 393,417 common stock warrants. The common stock purchase warrants entitle the holder to purchase an aggregate of up to 393,417 shares of the Company’s common stock at an exercise price of $0.45 per share. The common stock purchase warrants issued to ASOF are considered derivatives, but satisfied the criteria for classification as equity instruments, and were bifurcated from the host contract - convertible promissory note and recorded in equity at their relative fair values with a corresponding debt discount recorded to ASOF Note II. Aggregate amortization of the original issue discount for the years ended December 31, 2021 and 2020 was approximately $119,000 and $0, respectively. The principal balance outstanding at December 31, 2021 was $306,895.

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 $300,000. The holders agreed to allow the Company to extend the notes for two additional 30 day periods for $1000,000 per extension. The holders also waived certain defaults under the notes.

F-17

Can B̅ Corp. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2021 and 2020

PPP Loan

In 2020, the Company received a loan under the U.S. Small Business Administration’s Paycheck Protection Program established under the Coronavirus Aid Relief and Economic Security Act (“CARES act”) and related rules and regulations (the “PPP loan”) of $194,940.

Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of such loans after eight weeks, if the loan is used for eligible purposes, including to fund payroll costs, mortgage interest, rent and/or utility costs, and meet certain other requirements, including, the maintenance of employment and compensation levels. The Company plans to use the entire PPP Loan for qualifying expenses and expects to qualify for full or partial forgiveness under the program.

In May 2021, the Company received notice of forgiveness of the PPP loan in whole, including all accrued unpaid interest. In fiscal year 2021, the Company recorded the forgiveness of $194,940 of principal and $1,949 of accrued interest for a total of $196,889, which was included in gain from forgiveness of debt on the future trading priceConsolidated Statements of Operations.

TWS Note

On August 12, 2021, pursuant to an Equipment Acquisition Agreement, the Company entered into a twelve-month promissory note of $1,250,000 with payments of $100,000 per month and interest at 6% (See Note 4). As of December 31, 2021, the total amount outstanding was $1,050,000.

Other Loans

On November 18, 2021, the Company entered into a $100,000 unsecured promissory note agreement with a lender. The promissory note accrues interest at a rate of 10% per annum and is due within twelve months or due on demand subsequently to any major funding received by the Company in excess of $3,000,000.

Related Party Loan

In 2020, the Company entered into a loan payable to a director of the Company common stock. Therefore, the numberwith a principal balance of shares of common stock issuable upon conversion of the notes was indeterminate. Accordingly, we recorded the fair value of the embedded conversion features as a derivative liability at the respective issuance dates (or amendment dates) of the notes ($445,112 total for the year ended December 31, 2017) and charged the applicable amounts to debt discounts of ($182,750 total for the year ended December 31, 2017) and the remainder to other expense ($262,362 total for the year ended December 31, 2017)$224,000. The increase (decrease)loan bore interest at 12% per annum and was due in December 2020. The Company subsequently paid the fair value of the derivative liability from the respective issuance dates (or amendment dates) of the notes to the measurement date ($926,819 total increase for the year ended December 31, 2017) are charged (credited) to other expense (income). The fair value of the derivative liability of the notes is measured at the respective issuance dates and quarterly thereafter using the Black Scholes option pricing model. Assumptions used for the calculations of the derivative liability of the notes at December 31, 2017 include (1) stock price of $0.0335 per share, (2) exercise price of $0.0045 per share, (3) terms ranging from 0 days to 220 days, (4) expected volatility of 287% and (5) risk free interest rates ranging from 0.00% to 1.58%.loan in full in February 2021.

In 2018, all convertible notes containing embedded conversion features were satisfied and the Company recognized income from derivative liability of $1,591,137Note 9 – Stockholders’ Equity

NOTE 10 – Preferred Stock

Each share of Series A Preferred Stock is convertible into 10,000,00033,334 shares of CANB common stock and is entitled to 20,000,000 votes.66,666 votes. All Preferred Shares shall rank senior to all shares of Common Stock of the Company with respect to liquidation preferences and shall rank pari passu to all current and future series of preferred stock, unless otherwise stated in the certificate of designation for such preferred stock. In the event of a Liquidation Event, whether voluntary or involuntary, each holder may elect (i) to receive, in preference to the holders of Common Stock, a one-time liquidation preference on a per-share amount equal to the per-share value of preferred shares on the issuance date, as recorded in the Company’s financial records, or (ii) to participate pari passu with the Common Stock on an as-converted basis. Subject to any adjustments, the Series A holders shall be entitled to receive such dividends paid and distributions made to the holders of shares of Common Stock on an as converted basis.

Each share of Series B Preferred Stock has the first preference to dividends, distributions and payments upon liquidation, dissolution and winding-up of the Company, and is entitled to an accrued cumulative but not compounding dividend at the rate of 5% per annum whether or not declared. After six months of the issuance date, such share and any accrued but unpaid dividends can be converted into common stock at the conversion price which is the lower of (i) $0.0101; or (ii) the lower of the dollar volume weighted average price of CANB common stock on the trading day prior to the conversion day or the dollar volume weighted average price of CANB common stock on the conversion day. day. The shares of Series B Preferred Stock have no voting rights.rights.

F-18

Can B̅ Corp. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2021 and 2020

Each share of Series C Preferred Stock has preference to payment of dividends, if and when declared by the Company, compared to shares of our common stock. Each Preferred Series C share is convertible into 25,000 shares of common stock. The shares of Series C Preferred Stock have voting rights as if fully converted.

Each share of Series D Preferred Stock has 10,000 shares of voting rights only pari passu to common shares voting with no conversion rights and no equity participation. The Company issued a totalcan redeem Series D Preferred Stock at any time for par value.

On February 8, 2021, the Company’s Board of 10Directors 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 4,000 shares of CANBa new Series AD Preferred Stock (5with a par value of $0.001 each. All Series D Preferred Shares shall rank senior to all shares of Common Stock of the Company with respect to Mckenzie Webster Limitedliquidation preferences and 5shall rank pari passu to all current and future series of preferred stock, unless otherwise stated in the certificate of designation for such preferred stock. Each Series D Preferred Share shall have voting rights equal to 10,000 shares to Marco Alfonsi) in exchange forof Common Stock, adjustable at any recapitalization of the retirementCompany’s stock. In the event of a totalliquidation event, whether voluntary or involuntary, each holder shall have a liquidation preference on a per-share amount equal to the par value of 100,000,000such holder’s Series D Preferred Shares. The holders shall not be entitled to receive distributions made or dividends paid to the Company’s other stockholders. Except as otherwise required by law, for as long as any Series D Preferred Shares remain outstanding, the Company shall have the option to redeem any outstanding share of Series D Preferred Shares at any time for a purchase price of par value per share of Series D Preferred Shares (“Price per Share”). Should the Company desire to purchase Series D Preferred Shares, the Company shall provide the Holder with written notice and a check or cash in an amount equal to the number of shares of CANB common stock (50,000,000Series D Preferred Shares being purchased multiplied by the Price per Share. The shares from Mckenzie Webster Limitedof Series D Preferred Shares so purchased shall be deemed automatically cancelled and 50,000,000 shares from Marco Alfonsi).

the Holder shall return the certificates for such share to the Corporation. On October 4, 2017,or around March 27, 2021, the Company issued 3 shares of CANB Series A Preferred Stock to Alfonsi: 2 shares were the consideration for Alfonsi’s cancellation of accrued salaries payable of $127,803 owed toMr. Alfonsi, and 1 share (valued at $63,902) was issued pursuant to the new employment agreement with Alfonsi.

On November 30, 2017, MWL converted its 5 shares of CANB Series A Preferred Stock to 50,000,000 shares of CANB common stock.

On December 5, 2017, the Company issued 157,985 shares of CANB Series B Preferred Stock to RedDiamond Partners LLC (“RedDiamond”) pursuant to a Securities Purchase Agreement (the “SPA”) dated October 13, 2017, in exchange for proceeds of $150,000, or $0.95 per CANB Series B Preferred share.

On January 22, 2018, the Company issued 87,368 shares of CANB Series B Preferred Stock to RedDiamond Partners LLC (“RedDiamond”) pursuant to an amended Securities Purchase Agreement dated January 9, 2018, in exchange for proceeds of $83,000, or $0.95 per CANB Series B Preferred share.

On February 12, 2018, the Company issued 1 share of CANB Series A Preferred Stock to David Posel pursuant to a service agreement. The fair value of the issuance is $257,370 and will be amortized over the vesting period of four years.

On February 16, 2018, the Company issued 3 shares of CANB Series A Preferred Stock to Andrew Holtmeyer pursuant to a service agreement. The fair value of the issuance is $703,800 and will be amortized over the vesting period of one year.

On February 16, 2018, the Company issued 87,368 shares of CANB Series B Preferred Stock to RedDiamond Partners LLC (“RedDiamond”) pursuant to an amended Securities Purchase Agreement dated January 9, 2018, in exchange for proceeds of $83,000, or $0.95 per CANB Series B Preferred share.

On March 20, 2018, the Company issued 87,368 shares of CANB Series B Preferred Stock to RedDiamond Partners LLC (“RedDiamond”) pursuant to an amended Securities Purchase Agreement dated January 9, 2018, in exchange for proceeds of $83,000, or $0.95 per CANB Series B Preferred share.

On April 13, 2018, April 25, 2018, May 3, 2018, June 19, 2018 and June 25, 2018, RedDiamond Partners converted its 10,000 shares, 10,000 shares, 10,000 shares, 15,000 shares and 10,000 shares of CANB Series B Preferred Stock to 1,287,129 shares, 1,287,129 shares, 1,287,129 shares, 3,545,455 shares, and 2,363,636 shares of CANB common stock, respectively.

On May 14, 2018, the Company issued 1 share of CANB Series A Preferred Stock to a consultant pursuant to a Consulting Agreement dated May 11, 2018. The $105,000 fair value of the issuance was partially charged to consulting fees in the three months ended September 30, 2018.

From July 24, 2018 to September 26, 2018, RedDiamond Partners converted aggregately 263,263 shares of CANB Series B Preferred Stock to 53,839,743 shares of CANB common stock.

On August 28, 2018, September 14, 2018 and September 19, 2018, the Company issued 36,842 shares, 105,263 shares, and 105,263 shares of CANB Series B Preferred Stock, respectively, to RedDiamond Partners LLC (“RedDiamond”) pursuant to an amended Securities Purchase Agreement dated January 9, 2018, in exchange for proceeds of $35,000, $100,000 and $100,000, respectively, or $0.95 per CANB Series B Preferred share.

From October 2, 2018 to November 7, 2018, RedDiamond Partners converted aggregately 101,736 shares of CANB Series B Preferred Stock to 13,094,733 shares of CANB common stock.

On October 23, 2018 and November 14, 2018, the Company issued 200,000 shares and 52,500 shares of CANB Series B Preferred Stock, respectively, to RedDiamond Partners LLC (“RedDiamond”) in exchange for proceeds of $190,000 and $49,875, respectively, or $0.95 per CANB Series B Preferred share.

On December 28,2018, Marco Alfonsi converted 3 shares of CANB Series A Preferred Stock to 30,000,000 shares of CANB common stock.

On December 29, the Company issued 8 shares of CANB Series A Preferred Stock to three officers of the company (1 share to Stanley L. Teeple, 5 shares to PasqualeMr. Ferro, and 2 shares to Andrew Holtmeyer), pursuant to the employment agreements with them. The fair value of the issuance totaled at $3,375,520 and will be amortized over the vesting period of four years.

NOTE 11 – Common Stock

On February 2, 2017, the Company issued 200,000 shares of CANB common stock to a financial consultant for services rendered. The $11,000 fair value of the 200,000 shares of CANB common stock was charged to consulting fees in the three months ended March 31, 2017.

On February 13, 2017, the Company issued 1,685,900 shares of CANB common stock to the brother of the Chief Executive Officer of the Company in satisfaction of notes payable of $15,000 and accrued interest payable of $1,859.

On March 22, 2017, the Company issued 6,785,316 shares of CANB common stock to a lender in satisfaction of notes payable of $50,000 and accrued interest payable of $5,979.

On April 17, 2017, the Company issued 5,000,000 shares of CANB common stock to a consultant for services rendered. The $125,000 fair value of the 5,000,000 shares of CANB common stock was charged to consulting fees in the three months ended June 30, 2017.

On June 21, 2017, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $5,975 fair value of the 250,000 shares of CANB common stock was charged to consulting fees in the three months ended June 30, 2017.

On June 28, 2017, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $5,000 fair value of the 250,000 shares of CANB common stock was charged to consulting fees in the three months ended June 30, 2017.

On August 25, 2017, the Company issued 7,142,857 shares of CANB common stock to a lender in satisfaction of notes payable of $50,000 and accrued interest payable of $3,331.

On August 25, 2017, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $3,750 fair value of the 250,000 shares of CANB common stock was partially charged to consulting fees in the three months ended September 30, 2017.

On September 5, 2017, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $4,375 fair value of the 250,000 shares of CANB common stock was partially charged to consulting fees in the three months ended September 30, 2017.

On September 7, 2017, the Company issued 2,500,000 shares of CANB common stock to a consultant for services rendered. The $32,750 fair value of the 2,500,000 shares of CANB common stock was charged to consulting fees in the three months ended September 30, 2017. On July 12, 2018, the consultant agreed to return the 2,500,000 shares

to the Company due to the lack of service after an arbitration was filed on May 11,2018.

On September 11, 2017, the Company issued 250,000 and 250,000 shares of CANB common stock to two consultants for services rendered, respectively. The $3,350 fair value of each 250,000 shares of CANB common stock was partially charged to consulting fees in the three months ended September 30, 2017.

On September 25, 2017, the Company issued 2,500,000 shares of CANB common stock to a consultant for services rendered. The $2,525 fair value of the 2,500,000 shares of CANB common stock was partially charged to consulting fees in the three months ended September 30, 2017.

On November 2, 2017, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $1,725 fair value of the 250,000 shares of CANB common stock was charged to consulting fees in the three months ended December 31, 2017.

On November 9, 2017, the Company issued 2,500,000 shares of CANB common stock to a consultant for services rendered. The $21,250 fair value of the 2,500,000 shares of CANB common stock was partially charged to consulting fees in the three months ended December 31, 2017.

On November 30, 2017, the Company issued 50,000,000 shares of CANB common stock to Mckenzie Webster Limited in exchange for the retirement of 5 shares of CANBMr. Teeple Series A Preferred Stock.

On December 5, 2017, the Company issued 250,000 and 250,000 shares of CANB common stock to two consultants for services rendered, respectively. The $3,000 fair value of each 250,000 shares of CANB common stock was partially charged to consulting fees in the three months ended December 31, 2017.

On December 7, 2017, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $4,500 fair value of the 250,000 shares of CANB common stock was partially charged to consulting fees in the three months ended December 31, 2017.

On December 18, 2017, the Company issued 500,000 shares of CANB common stock to a consultant for services rendered. The $9,050 fair value of the 500,000 shares of CANB common stock was partially charged to consulting fees in the three months ended December 31, 2017.

On December 25, 2017, the Company issued 250,000 and 250,000 shares of CANB common stock to two consultants for services rendered, respectively. The $7,250 fair value of each 250,000 shares of CANB common stock was partially charged to consulting fees in the three months ended December 31, 2017.

On February 7, 2018, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $9,825 fair value of the 250,000 shares of CANB common stock was partially charged to consulting fees in the three months ended March 31, 2018.

On February 9, 2018, the Company issued 3,000,000 and 3,000,000 shares of CANB common stock to its two directors for services rendered, respectively. The $101,400 fair value of each 3,000,000 shares of CANB common stock was charged to directors fees in the three months ended March 31, 2018. The shares issued to one of the directors were converted to options at June 11, 2018 (see Note 10).

On February 13, 2018, the Company issued 150,000 shares of CANB common stock to a consultant for services rendered. The $5,085 fair value of the 150,000 shares of CANB common stock was partially charged to consulting fees in the three months ended March 31, 2018.

On February 14, 2018, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $8,500 fair value of the 250,000 shares of CANB common stock was partially charged to consulting fees in the three months ended March 31, 2018.

On February 19, 2018, the Company issued 150,000 shares of CANB common stock to a consultant for services rendered. The $5,280 fair value of the 150,000 shares of CANB common stock was partially charged to consulting fees in the three months ended March 31, 2018.

On February 26, 2018, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $11,375 fair value of the 250,000 shares of CANB common stock was partially charged to consulting fees in the three months ended March 31, 2018.

On March 1, 2018, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $10,900 fair value of the 250,000 shares of CANB common stock was charged to consulting fees in the three months ended March 31, 2018.

On March 20, 2018, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $6,500 fair value of the 250,000 shares of CANB common stock was charged to consulting fees in the three months ended March 31, 2018.

On April 13, 2018, April 25, 2018, May 3, 2018, June 19, 2018 and June 25, 2018, the Company issued 1,287,129 shares, 1,287,129 shares, 1,287,129 shares, 3,545,455 shares, and 2,363,636 shares of CANB common stock to RedDiamond in exchange for the retirement of 10,000 shares, 10,000 shares, 10,000 shares, 15,000 shares and 10,000 shares of CANB Series BD Preferred Stock respectively.

On May 9, 2018, the Company issued 125,000 shares of CANB common stock to a consultant for services rendered. The $1,812 fair value of the 125,000 shares of CANB common stock was partially charged to consulting fees in the three months ended June 30, 2018.

On May 29, 2018, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $5,000 fair value of the 250,000 shares of CANB common stock was partially charged to consulting fees in the three months ended June 30, 2018.

On May 31, 2018, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $4,600 fair value of the 250,000 shares of CANB common stock was charged to consulting fees in the three months ended June 30, 2018.

On June 4, 2018, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $5,750 fair value of the 250,000 shares of CANB common stock was partially charged to consulting fees in the three months ended June 30, 2018.

On June 11, 2018, the Company agreed to issue 2,749,429 shares of CANB common stock to a lender in satisfaction of notes payable of $15,000 and accrued interest payable of $4,246. The shares was issued at August 24, 2018.

On June 18, 2018, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $6,250 fair value of the 250,000 shares of CANB common stock was partially charged to consulting fees in the three months ended June 30, 2018.

On June 22, 2018, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $8,250 fair value of the 250,000 shares of CANB common stock was charged to consulting fees in the three months ended June 30, 2018.

From July 24, 2018 to September 26, 2018, the Company issued aggregately 53,839,743 shares of CANB common stock to RedDiamond in exchange for the retirement of 263,263 shares of CANB Series B Preferred Stock.

On July 31, 2018, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $3,225 fair value of the 250,000 shares of CANB common stock was charged to consulting fees in the three months ended September 30, 2018.

On August 9, 2018, Company received a conversion notice from a lender. As a result, 9,544,292 shares of CANB common stock was issued to the lender in satisfaction of notes payable of $50,000 and accrued interest payable of $7,266 at August 21, 2018.

On August 28, 2018, the Company issued 2,000,000 shares of CANB common stock to a consultant for services rendered. The $159,600 fair value of the 2,000,000 shares of CANB common stock was partially charged to consulting fees in the three months ended September 30, 2018.

On September 6, 2018, the Company issued 300,000 shares of CANB common stock to a consultant for services rendered. The $16,500 fair value of the 300,000 shares of CANB common stock was partially charged to consulting fees in the three months ended September 30, 2018.

On September 6, 2018, the Company issued 500,000 shares of CANB common stock to a consultant for services rendered. The $27,500 fair value of the 500,000 shares of CANB common stock was charged to consulting fees in the three months ended September 30, 2018.

On September 6, 2018, the Company issued 8,430,331 shares of CANB common stock to a lender in satisfaction ofnotes payable of $38,500 and accrued interest payable of $7,867.

On September 7, 2018, the Company issued 5,121,694 shares of CANB common stock to a lender in satisfaction of notes payable of $25,000 and accrued interest payable of $3,169.

On September 7, 2018, the Company issued 10,045,667 shares of CANB common stock to a lender in satisfaction of notes payable of $50,000 and accrued interest payable of $10,274.

On September 8, 2018, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $11,500 fair value of the 250,000 shares of CANB common stock was partially charged to consulting fees in the three months ended September 30, 2018.

On September 10, 2018, the Company issued 500,000 shares of CANB common stock to a consultant for services rendered. The $19,950 fair value of the 500,000 shares of CANB common stock was partially charged to consulting fees in the three months ended September 30, 2018.

On September 17, 2018, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $10,750 fair value of the 250,000 shares of CANB common stock was partially charged to consulting fees in the three months ended September 30, 2018.

On September 18, 2018, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $13,725 fair value of the 250,000 shares of CANB common stock was partially charged to consulting fees in the three months ended September 30, 2018.

On September 20, 2018, the Company issued 7,407,407 shares of CANB common stock to an investor pursuant to a Stock Purchase Agreement dated September 17, 2018, in exchange for proceeds of $200,000, or $0.027 per CANB common share.

On September 21, 2018, the Company issued 250,000 shares of CANB common stock to a consultant for services rendered. The $14,500 fair value of the 250,000 shares of CANB common stock was partially charged to consulting fees in the three months ended September 30, 2018.

On September 25, 2018, the Company issued 2,000,000 shares of CANB common stock to a consultant for services rendered. The $97,400 fair value of the 2,000,000 shares of CANB common stock was partially charged to consulting fees in the three months ended September 30, 2018.

From October 2, 2018 to November 7, 2018, the Company issued aggregately 13,094,733 shares of CANB common stock to RedDiamond in exchange for the retirement of 101,736 shares of CANB Series B Preferred Stock.

From November 5, 2018 to December 28, 2018, the Company issued aggregately 2,125,000 shares of CANB common stock to multiple consultants for services rendered. The $80,665 fair value of the 2,125,000 shares of CANB common stock was partially charged to consulting fees in the three months ended December 30, 2018.

From December 3, 2018 to December 28, 2018, the Company issued aggregately 1,500,000 shares of CANB common stock to three board members for services rendered. The $62,342 fair value of the 1,500,000 shares of CANB common stock was charged to director fees in the three months ended December 30, 2018.

From December 3, 2018 to December 28, 2018, the Company issued aggregately 22,413,794 shares of CANB common stock to multiple investors pursuant to relative Stock Purchase Agreements dated on various dates, in exchange for total proceeds of $650,000.

On December 11, 2018, the Company issued 891,089 shares of CANB common stock to RedDiamond in satisfaction of dividend payable of $9.000.

On December 19, 2018, the Company issued 891,089 shares of CANB common stock to Auctus, LLC pursuant to a cashless exercise of stock options.

On December 21, 2018, Company received a conversion notice from a lender. As a result, 9,372,100 shares of CANB common stock was issued to the lender in satisfaction of notes payable of $83,500 and accrued interest payable of $10,221.

On December 21, 2018, Company issued aggregately 4,370,629 shares of CANB common stock to four officers of the Company in satisfaction of accrued compensation of $192,300.

On December 28, 2018, the Company issued 3,096,827 shares of CANB common stock for the acquisition of Pure Health Products, LLC.

On December 28, 2018, the Company issued 245,789 shares of CANB common stock to an officer of the Company pursuant to the Employment Agreement dated December 29, 2018 with Andrew Holtmeyer. The $10,371 fair value of the issuance was charged to stock-based compensation in the three months ended December 31, 2018.

On December 29, the Company issued 30,000,000 shares of CANB common stock to Marco Alfonsi in exchange for the return of 3 shares of CANB Series A Preferred Stock owned by Marco Alfonsi.

NOTE 12 – Stock Options and Warrants

A summary of stock options and warrants activity follows:

  Shares of Common Stock Exercisable Into 
  Stock       
  Options  Warrants  Total 
Balance, December 31, 2016  50,000   247,500   297,500 
Granted in 2017  -   -   - 
Expired in 2017  -   -   - 
             
Balance, December 31, 2017  50,000   247,500   297,500 
Granted in 2018  6,000,000   2,850,000   8,850,000 
Cancelled in 2018  -   -   - 
Exercised in 2018  -   (850,000)  (850,000)
             
Balance, December 31, 2018  6,050,000   2,247,500   8,297,500 

Issued and outstanding stock options as of December 31, 2018 consist of:

Year Number Outstanding
And
  Exercise  Year of 
Granted Exercisable  Price  Expiration 
          
2009  50,000  $1.000   2019 
2018  6,000,000  $0.001   2023 
             
Total  6,050,000         

On June 11, 2018, the Company granted 3,000,000 options of CANB common stock to Carl Dilley, a director of the Company, in exchange for the retirement of a total of 3,000,000 shares of CANB common stock from Carl Dilley. The options are exercisable for the purchase of one share of the Registrant’s Common Stock at an exercise price of $0.001 per share. The Options are fully vested and are exercisable as of the Grant Date and all shall expire June 11, 2023. The value of the Stock Options ($84,000) were calculated using the Black Scholes option pricing model and the following assumptions: (i) $0.028 share price, (ii) 5 years term, (iii) 262.00% expected volatility, (iv) 2.80% risk free interest rate and the difference between this value and the fair value of retired shares was expensed in the quarterly period ended June 30, 2018.

On October 21, 2018, the Company granted 3,000,000 options of CANB common stock to Stanley L. Teeple, an officer and Director of the Company. The options are exercisable for the purchase of one share of the Registrant’s Common Stock at an exercise price of $0.001 per share. The Options are fully vested and are exercisable as of the Grant Date and all shall expire October 1, 2023. The values of the Stock Options ($118,200) were calculated using the Black Scholes option pricing model and the following assumptions: (i) $0.0395 share price, (ii) 5 years term, (iii) 221.96% expected volatility, (iv) 3.05% risk free interest rate and the fair value of options was expensed in the quarterly period ended December 31, 2018

Issued and outstanding warrants as of December 31, 2018 consist of:

Year Number Outstanding
And
  Exercise  Year of 
Granted Exercisable  Price  Expiration 
          
2010  247,500  $1.00   2020 
2018  2,000,000  $0.04345(a)  2023 
             
Total  2,247,500         

(a) 110% of the closing price of the Company’s common stock on the date that the Holder funds the full purchase price of the Note.

NOTE 13 – Income Taxes

No provisions for income taxes were recorded for the periods presented since the Company incurred net losses in those periods.

The provisions for (benefits from) income taxes differ from the amounts determined by applying the U.S. Federal income tax rate of 21% and 35% to pretax income (loss) as follows:

  Year Ended December 31, 
  2018  2017 
       
Expected income tax (benefit) at 21% and 35% $(663,578) $(748,902)
         
Loss on forgiveness of receivable from Pure Health products  18,024     
         
Loss on stock issuance  36,344   67,043 
         
Loss on debt conversion  272,867   11,334 
         
Non-deductible stock-based compensation  583,653   81,057 
         
Non-deductible amortization of debt discounts  37,064   87,566 
         
Non-deductible impairment of intangible assets  -   7,527 
         
Non-deductible expense from derivative liability  (334,139)  320,495 
         
Increase in deferred income tax assets valuation allowance  250,235   173,879 
         
Provision for (benefit from) income taxes $-  $- 

Deferred income tax assets consist of:

  December 31,  December 31, 
  2018  2017 
       
Net operating loss carryforward  1,644,593   1,394,358 
         
Valuation allowance  (1,644,593)  (1,394,358)
         
Net $-  $- 

Based on management’s present assessment, the Company has not yet determined it to be more likely than not that a deferred income tax asset of $1,644,593 attributable to the future utilization of the $4,786,934 net operating loss carryforward as of December 31, 2018 will be realized. Accordingly, the Company has maintained a 100% allowance against the deferred income tax asset in the financial statements at December 31, 2018. The Company will continue to review this valuation allowance and make adjustments as appropriate. The net operating loss carryforward expires in years 2025, 2026, 2027, 2028, 2029, 2030, 2031, 2032, 2033, 2034, 2035, 2036, 2037 and 2038 in the amount of $1,369, $518,390, $594,905, $686,775, $159,141, $151,874, $135,096, $166,911, $311,890, $25,511, $338,345, $386,297, $496,798600 shares each and $713,162, respectively.

Current tax laws limitto COO Philip Scala in the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore,150 shares, collectively representing 19,500,000 voting shares.

Common Stock

For the amount available to offset future taxable income may be limited.

The Company’s U.S. Federal and state income tax returns prior to 2014 are closed and management continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. The statute of limitations on the 2014 tax year returns expired in September 2018.

The Company recognizes interest and penalties associated with uncertain tax positions as part of the income tax provision and would include accrued interest and penalties with the related tax liability in the consolidated balance sheets. There were no interest or penalties paid during 2018 and 2017.

NOTE 14 – Commitments and Contingencies

Employment Agreements

On October 3, 2017, the Company executed an Executive Employment Agreement with Marco Alfonsi (“Alfonsi”) for Alfonsi to serve as the Company’s chief executive officer and interim chief financial officer and secretary for cash compensation of $10,000 per month. Pursuant to the agreement,ended December 31, 2021, the Company issued a sharean aggregate of CANB Series A Preferred Stock to Alfonsi on October 4, 2017 (see Note 8). Alfonsi may terminate his employment upon 30 days written notice to the Company. The Company may terminate Alfonsi’s employment upon written notice to Alfonsi by a vote of the Board of Directors. At November 12, 2018, this Agreement was terminated due to the execution of a new Employment Agreement with Marco Alfonsi for Alfonsi to serve as the Company’s chief executive officer for cash compensation of $15,000 per month. Pursuant to the agreement, three of the eight previously issued 814,336 shares of CANB SeriesCommon Stock under its Offering Statement on Form 1-A (File No. 024-11233) (the “Regulation A Preferred Stock will be returned to the Company and converted into 30,000,000 common shares. On December Alfonsi may terminate his employment upon 30 days written notice to the Company. The Agreement has an initial term of four years and can be terminated upon the resignation or death of Mr. Alfonsi, and also can be terminated by the Company due to the failure or neglect of Mr. Alfonsi to perform his duties, or due to the misconduct of Mr. Alfonsi in connection with the performance.Offering”).

On February 12, 2018, the Company executed an Executive Service Agreement (“Agreement”) with David Posel. The Agreement provides that Mr. Posel services as the Company’s Chief Operating Officer for a term of 4 years. The Agreement also provides for compensation to Mr. Posel of $5,000 cash per month and the issuance of 1 share of Series A Preferred Stock at the inception of the Agreement. The Agreement can be terminated upon the resignation or death of Mr. Posel, and also can be terminated by the Company due to the failure or neglect of Mr. Posel to perform his duties, or due to the misconduct of Mr. Posel in connection with the performance. On February 12, 2018, 1 share of CANB Series A Preferred Stock were issued to Mr. Posel (see Note 8).

On February 16, 2018, the Company executed an Executive Service Agreement (“Agreement”) with Andrew W Holtmeyer. The Agreement provides that Mr. Holtmeyer services as the Company’s Executive Vice President Business for a term of 3 years. The Agreement also provides for compensation to Mr. Holtmeyer of $10,000 cash per month and the issuance of 3, 2 and 1 share of Series A Preferred Stock at the beginning of each year. The Agreement can be terminated upon the resignation or death of Mr. Holtmeyer, and also can be terminated by the Company due to the failure or neglect of Mr. Holtmeyer to perform his duties, or due to the misconduct of Mr. Holtmeyer in connection with the performance. At December 29, 2018, this Agreement was terminated due to the execution of a new Employment Agreement with Andrew W Holtmeyer. The Agreement provides that Mr. Holtmeyer services as the Company’s Executive Vice President Business for a term of 4 years. The Agreement also provides for compensation to Mr. Holtmeyer of $15,000 cash per month and the issuance of 245,789 shares of common stock upon signing of the agreement.

On October 15, 2018, the Company executed an Employment Agreement (“Agreement”) with Stanley L. Teeple. The Agreement provides that Mr. Teeple services as the Company’s Chief Financial Officer and Secretary for a term of 4 years. The Agreement also provides for compensation to Mr. Teeple of $15,000 cash per month and the issuance of 1 share of Series A Preferred Stock upon execution of the Agreement. The Agreement can be terminated upon the resignation or death of Mr. Teeple, and also can be terminated by the Company due to the failure or neglect of Mr. Teeple to perform his duties, or due to the misconduct of Mr. Teeple in connection with the performance.

On December 28, 2018, the Company executed an Employment Agreement (“Agreement”) with Pasquale Ferro for Mr. Ferro to serve as Pure Health Products’ president for cash compensation of $15,000 per month and the total issuance of 5 share of Series A Preferred Stock proportionately vesting at the beginning of each year for a term of 4 years. Mr. Ferro may terminate his employment upon 30 days written notice to the Company. The Agreement has an initial term of four years and can be terminated upon the resignation or death of Mr. Ferro, and also can be terminated by the Company due to the failure or neglect of Mr. Ferro to perform his duties, or due to the misconduct of Mr. Ferro in connection with the performance.

Consulting Agreements

On July 29, 2017, the Company executed a Consulting Agreement with Andrew W Holtmeyer for Mr. Holtmeyer to serve as the Company’s consultant for monthly cash payment of $5,000 through July 29, 2018. Effective February 16, 2018, the Company terminated the agreement due to the replacement of an Executive Service Agreement.

On September 6, 2017, the Company executed a Consulting Agreement with T8 Partners LLC (“T8”) for T8 to serve as the Company’s consultant for stock compensation of a total of 10,000,000 restricted shares. Pursuant to the agreement, the Company issued 2,500,000 restricted shares of CANB common stock to T8 on September 7, 2017. Effective October 27, 2017, the Company terminated the agreement due to non-performance by T8. On July 12, 2018, the Company received a response from T8 Partners LLC (“T8”) confirming that the 2,500,000 shares requested to be returned by the Company in an arbitration filed on May 11, 2018 will be returned to the Company. The Company is awaiting the result of that arbitration.

On November 9, 2017, the Company executed a Consulting Agreement with Healthcare Advisory Group Company (“Healthcare”) for Healthcare to serve as the Company’s consultant for stock compensation of a total of 5,000,000 restricted shares. Pursuant to the agreement, the Company issued 2,500,000 restricted shares of CANB common stock to Healthcare on November 9, 2017. Effective March 6, 2018, the Company terminated the agreement due to non-performance by Healthcare.

Lease Agreements

On December 1, 2014, Prosperity entered into a lease agreement with KLAM, Inc. for office space in Hicksville, New York for an initial term of one year commencing December 1, 2014. The lease provides for monthly rentals of $2,500 and provides Prosperity an option to renew the lease after the initial term. The Company has continued to occupy this space after November 30, 2015 under a month to month arrangement at $2,500 per month. KLAM, Inc. is controlled by the wife of the Company’s chief executive officer Marco Alfonsi.

On September 11, 2015, the Company executed a lease agreement with an unrelated third party for office space in Hicksville, New York for a term of 37 months. The lease provides for monthly rentals of $2,922 for lease year 1, $3,009 for lease year 2, and $3,100 for lease year 3. The lease also provides for additional rent based on increases in base year operating expenses and real estate taxes. On August 6, 2018, the Company renewed the lease agreement for a term of 36 months starting November 1, 2018. The lease provides for monthly rentals of $3,193 for lease year 1, $3,289 for lease year 2, and $3,388 for lease year 3.

Rent expenseIn addition, for the year ended December 31, 2018 2021, the Company issued an aggregate of 381,791, 157,115, and 2017 was $67,165111,874 of Common Stock for asset acquisitions, services rendered, and $65,060,in lieu of note and interest repayments, respectively.

F-19

At

Can B̅ Corp. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2018,2021 and 2020

Note 10 – Stock Options

The Company has an employee share option plan, which is shareholder-approved, permits the future minimum lease payments under non-cancellable operating leases were:grant of share options and shares to its employees. The Company believes that such awards better align the interests of its employees with those of its shareholders. Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant. Share awards generally vest over five years.

Year ended December 31, 2019  38,508 
Year ended December 31, 2020  39,666 
Year ended December 31, 2021  33,880 
     
Total $112,054 

Major CustomersThe fair value of each option award is estimated on the date of grant using a lattice-based option valuation model that uses the assumptions noted in the following table. Because lattice-based option valuation models incorporate ranges of assumptions for inputs, those ranges are disclosed. Expected volatilities are based on implied volatilities from traded options on the Company’s stock, historical volatility of the Company’s stock, and other factors. The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding; the range given below results from certain groups of employees exhibiting different behavior. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

  December 31, 2021  December 31, 2020 
Per share fair value at grant date $8.02  $7.65 
Risk free interest rate  1.02   0.41 
Expected volatility  201%  168%
Dividend yield  0%  0%
Expected life in years  5   5 

For

A summary of stock options activity for the year ended December 31, 2018, one customer accounted for approximately 16%2021 is as follows:

Summary of total revenues.Stock Options Activity

  Option Shares  Weighted Average Exercise Price  Weighted Average Remaining Contractual Life (Years) 
Outstanding, January 1, 2021  79,147  $5.37   3.92 
Granted  298,507  $6.30   4.61 
Exercised  -   -   - 
Forfeited  -   -   - 
Expired  -   -   - 
Outstanding, December 31, 2021  377,654  $6.11   4.46 

ForA summary of the status of the Company’s nonvested shares as of December 31, 2021, and changes during the year ended December 31, 2017, three customers accounted2021, is presented below:

Schedule of Non-Vested Option Shares

  Option Shares  Weighted Average Grant-Date Fair Value 
Non-vested options, January 1, 2021  0  $0 
Granted  298,507  $8.02 
Vested  (298,507)  8.02 
Forfeited  -   - 
Non-vested options, December 31, 2021 $0  $0 

As of December 31, 2021, there was no unrecognized compensation cost related to nonvested stock-based compensation arrangements granted under the share option plan. The Company recognized $2,395,038 of stock-based compensation expense during the year ended December 31, 2021.

F-20

Note 11 – Income Taxes

The provision for approximately 45%, 29%income taxes consisted of the following:

Schedule of Provision For Income Taxes

  December 31,  December 31, 
  2021  2020 
State franchise tax $1,075  $3,304 

The Company’s effective income tax rate differs from the federal statutory rate primarily as a result of certain expenses being deductible for financial reporting purposes that are not deductible for tax purposes, the existence of research and 14%, respectively,development tax credits, operating loss carryforwards, and adjustments to previously recorded deferred tax assets and liabilities due to the enactment of total service revenues.the Tax Cuts and Jobs Act in 2017.

Public OfferingThe difference in the provision for income taxes and the amount computed by applying the statutory federal income tax rates consists of Unitsthe following:

Schedule of Provisions for (Benefits from) Income Taxes

  December 31,  December 31, 
  2021  2020 
Expected income tax benefit $(2,034,215) $(1,200,467)
State franchise tax  1,075   3,304 
Non-deductible stock-based compensation  252,205   474,428 
Non-deductible stock-based interest  41,856   94,853 
Increase in deferred income tax assets valuation allowance  1,740,154   631,186 
Provision for income taxes $1,075  $3,304 

On August 2, 2016,Principal components of the Company’s Registration Statement on Form S-1 was declared effectivedeferred tax assets as of December 31, 2021 and December 31, 2020 were as follows:

Schedule of Deferred Income Tax Assets

  December 31,  December 31, 
  2021  2020 
Net operating loss carryfoward $(3,671,509)  $(1,931,355) 
Valuation allowance  3,671,509   1,931,335 
Net $0  $0 

At December 31, 2021, the Company had net operating loss carryforwards of approximately $17,483,000 that begin to expire in 2025.

The Company files a federal income tax return and separate income tax returns in various states. For federal and certain states, the 2018 through 2021 tax years remain open for examination by the Securitiestax authorities under the normal three-year statute of limitations.

The Company assesses available positive and Exchange Commission.negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant component of objective negative evidence identified during management’s evaluation was the cumulative loss incurred over the three-year period ended December 31, 2021. Such objective evidence limits the ability to consider other subjective evidence, such as our forecasts of future taxable income and tax planning strategies. On a self-underwrittenthe basis of this evaluation as of December 31, 2021, the Company recognized a full valuation allowance against its net deferred tax assets, pursuant to ASC 740, as of December 31, 2021. Based on the Company’s evaluation, it was offering updetermined that 0 uncertain tax positions existed as of December 31, 2021 or December 31, 2020.

Note 12 – Related Party Transactions

For the years ended December 31, 2021 and 2020, the Company paid fees to 40,000,000 Units at a priceservice provider that is a relative of $0.05 per Unit or $2,000,000 maximum. Each Unit consisteda director for professional services in the amount of one share$28,100 and $54,500, respectively. At December 31, 2021, the Company had outstanding payables to the aforementioned service provider of $5,000.

At December 31, 2021, the Company common stockhas amounts due to a director of the Company of approximately $218,000 which are expected to be repaid in the next twelve months.

F-21

Can B̅ Corp. and one warrantSubsidiaries

Notes to purchase ½ share of Company common stock at a price of $0.10 per share for a period of three years. There was no minimum offering amount or escrow required as a condition to closing. The offering terminated May 17, 2017.Consolidated Financial Statements

December 31, 2021 and 2020

Note 13 – Commitments and Contingencies

NOTE 15 – Related Party Transactions

Employment Agreements

ProAdvanced Group, Inc. (“PAG”), an entity controlled by the Company’s chief executive officer, is a customer of CANB. At

On December 31, 2018, CANB had an account receivable from PAG of $7,240. For the year ended December 31, 2018, CANB had revenues from PAG of $5,000.

Island Stock Transfer (“IST”), an entity controlled by Carl Dilley, a former Company director, is both a customer and vendor of CANB. At December 31, 2018, CANB had an account receivable from IST of $7,035 and an account payable to IST of $1,454. For the year ended December 31, 2018, CANB had revenues from IST of $4,000.

Stock Market Manager, Inc. is also an entity controlled by Mr. Dilley. For the year ended December 31, 2018, CANB had an account payable to Stock Market Manager Inc. of $1,676.

In order to facilitate its operations,28, 2020, the Company has entered into a Production Agreementnew three-year Employment Agreements with CEO Marco Alfonsi, CFO Stanley Teeple, and Pure Health Products LLC (“PHP”),Pasquale Ferro. Under these agreements, they are to receive a New York limited liability company.i) base salary of fifteen thousand dollars ($15,000.00) per month, ii) is eligible to receive cash and or stock bonuses, iii) shall receive a stock bonus in accordance with the Company’s Incentive Stock Option Plan (“ISOP”) in an amount of one-hundred thousand dollars ($100,000) per year of the Agreement, iv) 200 shares of the Company’s Series C Preferred stock, v) usual and customary benefits including expense reimbursement, health and life insurance plan reimbursements and allowances. Phil Scala. Interim COO also received a similar agreement with a base compensation of fifty-two thousand annually, $100,000 in ISO, and 20 Preferred C shares.

Consulting Agreements

On July 15, 2020, we engaged an advisor to provide consulting services under an Investor Relations and Advisory Agreement (the “Advisory Agreement”). Pursuant to the ProductionAdvisory Agreement, PHP will manufacture, package,we agreed to pay the Consulting Firm a restricted common stock monthly fee of $5,000 per month for the initial 3 months., $6,250 per month for months 4-6., $7,500 per month for month 7 and sellafter. At CANB’s option, the Company’s CBD infused productsmonthly fee may be payable in part or in whole in cash. Monthly Fee, such amount shall be paid via issuance of restricted common shares of CANB. The shares are to be issued in the name of Tysadco Partners. The number of common shares earned each month shall be calculated and issued on an exclusive basis. PHP will not produce or manufacture any product containing any cannabis or hemp derivative for any person or entity other thana quarterly basis prior to each 90-day period and based on the Company, and the Company controls the ingredients, recipe, manufacturing processes and procedures and quality and taste parameters for all Products producedvalue at the PHP facility. PHP may also white label / rebrand or relabel the productsclosing price on the Company’s behalflast day of the preceding period. All common shares earned by the Consultant pursuant to “white label agreements” entered into betweenthis Agreement shall be issued by CANB on a quarterly basis.

Lease Agreements

The Company leases office space in numerous medical facilities offices under month-to-month agreements.

Rent expense for the Company and third-party customers. Credit card sales are processed through PHP as well. Through its contractual relationship with PHP, the Company is able to control the manufacturing process of its products while reducing its production costs. In addition, the Company has the option to acquire certain assets of PHP should it elect to take over direct manufacture of its Products. For the yearyears ended December 31, 2018, purchase of CBD infused products from PHP totaled $274,556.50. Effective December 28, 2018, the Company acquired Pure Health Products, LLC.2021 and 2020 was $641,779 and $193,069, respectively.

During the year endedAt December 31, 2018, we had products and service sales to related parties totaling $5,000.2021, the future maturities of lease liabilities were as follows:

Schedule of Future Minimum Lease Payments Under Non-cancellable Operating Leases

   2021 
2022 $808,223 
2023  930,196 
2024  461,872 
Total $2,200,291 

NOTE 16Note 14Subsequent Events

On January 28, 2019,22, 2022, the Company issued 10,000,000 shares of CANB common stock to a consultant of the Company in exchange for the retirement of 1 share of CANB Series A Preferred Stock.

From February 21, 2019 to March 12, 2019, the Company issued aggregately 20,221,436 shares of CANB common stock to RedDiamond in exchange for the retirement of 157,105 shares of CANB Series B Preferred Stock.

From January 4, 2019 to March 27, 2019, the Company issued aggregately 41,431,994 shares of CANB common stock to multiple investors pursuant to relative Stock Purchase Agreements dated on various dates, in exchange for total proceeds of $1,196,100.

On January 14, 2019, the Company and PHP (collectively, the “buyer”) entered into a LicenseMulti-Unit Development Agreement. Pursuant to the agreement, the Company may enter into fifty retail space lease agreements with an option for one hundred additional units as an operator of Health and AcquisitionWellness Products and CBD Lounges.

On January 27, 2022, the Company entered into an Isolate Master Purchase Agreement (the “LAA”) with Hudilab, Inc. (“HUDI”)a seller. Pursuant to the agreement, the Company commits to purchase 1,000 Kilos per week at price of $275.00 per Kilo plus cost of delivery. The agreement can be terminated upon 30 day written notice from either party.

On February 2, 2022, the Company entered into a Future Receivable Sale and Purchase Agreement with a Purchaser. Pursuant to the terms of the agreement, the Company sold an aggregate of $136,000 of future receivables for a purchase amount of $100,000. The aggregate principal amount is payable in weekly installments totaling 2,833 until such time the obligation is fully satisfied.

On February 9, 2022, the Company entered into an Industrial Hemp Sale, Processing and Storage Agreement in which the Company agreed to purchase an aggregate quantity of 9,969 kilos of crude hemp extract from a Seller at a purchase price of $50.00 per Kilo. Pursuant to the LAA, HUDI will sellterms of the technology owned by itagreement, the Seller agrees to provide certain services related to processing and storage. The Company is required to provide cash collateral of $150,000 to the buyerseller to be utilized as security for the Company’s obligations and applied against amounts owed upon the terms and conditions set forth in the agreement.

On April 15, 2022, the Company entered into a $150,000 unsecured promissory note with a lender. The promissory note accrues interest at a rate of 16% per annum and is due no later than August 10, 2022or on demand subsequently to any major funding received by the Company in excess of $2,000,000. The promissory note may be repaid in full at any time by the Company by paying the principal amount plus any accrued interest without penalty excepting that the minimum interest payment shall be not less than $10,000 regardless of the prepayment date.

On February 15, 2022, the Company entered into a Hemp Purchase Agreement in which the Company agrees to purchase up to 450,000 pounds of biomass, industrial hemp biomass, and extracted derivatives from a Seller.

On March 24, 2022, the Company entered into securities purchase agreements and related agreements with two investors, respectively, for the sale of $600,000 in convertible promissory notes and warrants.

On April 14, 2022, the Company entered into an Agreement with Arena Special Opportunities Partners I, LP, a Delaware limited partnership (the “ASOP”) and Arena Special Opportunities Fund, LP, a Delaware limited partnership (“ASOF” and, collectively with ASOP, the “Holders”) whereby the holders extended the maturity date of certain previously issued promissory notes to April 30, 2022 in exchange for 7,500,000 shares of CANB common stock. On January 14, 2019,$300,000 and agreed to grant two additional extensions for 30 days each, each for an additional $100,000 per extension. Holders also waived certain defaults under the shares were issuednotes and granted consents required under the notes.

The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the owner of HUDI.

From January 18, 2019 to March 17, 2019,date that the Company issued aggregately 24,600,000 shares of CANB common stock to multiple consultants for services rendered.

From January 19, 2019 to March 27, 2019, the Company issued aggregately 1,167,959 shares of CANB common stock to employee and officers of the Company pursuant to employee agreement and in satisfaction of accrued compensation for the quarter ended March 31, 2019.

On January 31, 2019, PHP entered into an Asset Purchase Agreement (the “Agreement”) with Seven Chakras, LLC (“Seven Chakras”). Pursuant to the Agreement, PHP purchased the rights and title to (i) Seven Chakras’ proprietary formulas, methods, trade secrets, and know-how related to the production of Seven Chakras’ products containing cannabidiol (“CBD”), (ii) Seven Chakras’ tradename, domain name, and social media sites, and (iii) other assets of Seven Chakras including but not limited to raw materials, equipment, packaging and labeling materials, mailing lists, and marketing materials (collectively, the “Assets”). On February 20, 2019, the Company issued 1,000,000 shares of CANB common stock to owners of Seven Chakras pursuant to the agreement.

On February 5, 2019, the Company issued 2,000,000 shares to the owner of TZ Wholesale LLC, pursuant to a Memorandum of Understanding (the “MOU”) dated November 9, 2018.

As a result of Canbiola’s acquisition of Pure Health products, it conducted a corporate re-alignment including naming Pasquale Ferro President and moving David Possel from Chief Operating Officer of Canbiola to Chief Operations Officer Pure Health Products.

In accordance with FASB ASC 855, Subsequent Events, the Company has evaluated subsequent events through October 30, 2018, the date on which these consolidated financial statements were available to be issued. Exceptare issued and as disclosed above,of that date, except as reported below, there were no material subsequent events that required recognitionadjustment or additional disclosure in thesethe consolidated financial statements.

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