UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30,~~March 31, ~~2021~~2022

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

For the transition period from __________ to __________

COMMISSION FILE NUMBER: ~~000-55753~~333-208293

Can B Corp.

(Exact name of registrant as specified in its charter)

~~(Exact name of registrant as specified in its charter)~~

Florida

20-3624118

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

~~incorporation or organization)~~

Identification No.)

960 South Broadway, Suite 120

Hicksville, NY 11801

(Address of principal executive offices)

516-595-9544

(Registrant’s telephone number, including area code)

Canbiola, Inc.

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

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

Tile of each class		Trading Symbol(s)		Name of each exchange on which registered
~~Common Stock~~None		CANB		N/A

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ 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.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging Growth Company	☐
(Do not check if smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

The number of shares of the registrant’s only class of common stock issued and outstanding as of ~~August 15, 2021 was~~May 11, 2022 is ~~16,943,010~~3,325,814 ~~shares.~~.

Can B Corp.

FORM 10-Q

~~June 30, 2021~~March 31, 2022

TABLE OF CONTENTS

		Page
		No.
	PART I. - FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets ~~- June 30, 2021~~– March 31, 2022 and December 31, ~~2020~~2021	3
	Consolidated Statements of Operations – Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~	4
	Consolidated Statement of Stockholders’ Equity - Three ~~and Six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~	5
	Consolidated Statements of Cash Flows – ~~Six~~Three Months Ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~	6
	Condensed Notes to Unaudited Consolidated Financial Statements.	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	1517
Item 3	Quantitative and Qualitative Disclosures About Market Risk.	1617
Item 4	Controls and Procedures.	1617
	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	1718
Item A.	Risk Factors	1718
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	1718
Item 3.	Defaults Upon Senior Securities	1719
Item 4.	Mine Safety Disclosures	1719
Item 5.	Other Information	1719
Item 6.	Exhibits	1819

PART 1 – FINANCIAL INFORMATION

Item 1. Financial Statements

Can B̅ Corp. and Subsidiaries

Consolidated Balance Sheets

	(Unaudited)						(Unaudited)
	June 30,			December 31,			March 31,			December 31,
	2021			2020			2022			2021
Assets
Current assets:
Cash and cash equivalents	$	1,093,156		$	457,798		$	114,992		$	449,001
Accounts receivable, less allowance for doubtful accounts of $533,300 and $485,848, respectively		2,159,886			2,003,064
Accounts receivable, less allowance for doubtful accounts of $547,241 and $547,241, respectively								4,438,286			3,646,677
Inventory		320,243			344,954			3,087,338			2,553,438
Note receivable		2,898			2,898			-			2,898
Operating lease right-of-use-asset - current		37,535			35,790
Prepaid expenses		632,750			1,209,126			-			1,625
Total current assets		4,246,468			4,053,630			7,640,616			6,653,639

Property and equipment, net		1,089,113			994,979			6,792,188			7,052,926

Other assets:
Deposits		23,287			21,287			165,787			165,787
Intangible assets, net		734,732			523,009			376,486			369,015
Goodwill		55,849			55,849
Operating lease right-of-use-asset - noncurrent		-			22,384
Operating lease right-of-use-asset, net								2,009,212			2,220,134
Other noncurrent assets		12,968			20,315			13,139			13,139
Total other assets		826,836			642,844			2,564,624			2,768,075

Total assets	$	6,162,417		$	5,691,453		$	16,997,428		$	16,474,640

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	384,195		$	153,640		$	2,153,587		$	1,163,284
Accrued expenses		157,610			200,495			157,343			2,407,528
Due to related party								210,434			218,273
Notes and loans payable, net		2,626,315			1,827,531			6,063,315			4,865,749
Warrant liabilities								195,678			-
Operating lease liability - current		37,786			43,506			809,010			808,223
Total current liabilities		3,205,906			2,225,172			9,589,367			9,463,057

Long-term liabilities:
Notes and loans payable, net		-			194,940
Operating lease liability - noncurrent		-			15,492			1,159,867			1,392,068
Total long-term liabilities		-			210,432			1,159,867			1,392,068

Total liabilities	$	3,205,906		$	2,435,604		$	10,749,234		$	10,855,125

Commitments and contingencies (Note 13)
Commitments and contingencies (Note 14)								-

Stockholders’ equity:
Preferred stock, authorized 5,000,000 shares:
Series A Preferred stock, 0 par value: 20 shares authorized, issued and outstanding		5,539,174			5,539,174
Series A Preferred stock, 0 par value: 20 shares authorized, 5 shares and 20 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively								5,320,000			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, 50 issued and outstanding		-			-
Series C Preferred stock, $0.001 par value: 2,000 shares authorized, 23 issued and outstanding								207,000			207,000
Series D Preferred stock, $0.001 par value: 4,000 shares authorized, 1,950 issued and outstanding		2			-			2			2
Preferred Stock Value		-			-
Common stock, 0 par value; 1,500,000,000 shares authorized, 16,943,010 and 5,544,590 issued and outstanding at June 30, 2021 and December 31, 2020, respectively		30,070,447			26,111,978
Preferred stock
Common stock, 0 par value; 1,500,000,000 shares authorized, 3,264,566 and 2,834,755 issued and outstanding at March 31, 2022 and December 31, 2021, respectively								76,219,018			49,676,847
Common stock issuable, 0 par value; 21,547 and 0 shares at March 31, 2022 and December 31, 2021, respectively								119,586			-
Treasury stock		(572,678	)		(572,678	)		(572,678	)		(572,678	)
Additional paid-in capital		3,225,461			2,563,399			6,206,822			5,635,003
Accumulated deficit		(35,305,895	)		(30,386,024	)		(81,251,556	)		(77,766,659	)
Total stockholders’ equity		2,956,511			3,255,849			6,248,194			5,619,515

Total liabilities and stockholders’ equity	$	6,162,417		$	5,691,453		$	16,997,428		$	16,474,640

See notes to consolidated financial statements

Can B̅ Corp. and Subsidiaries

Consolidated Statement of Operations

	2021			2020			2021			2020			2022			2021
	Three Months Ended						Six Months Ended						Three Months Ended
	June 30,						June 30,						March 31,
	2021			2020			2021			2020			2022			2021
Revenues
Product sales	$	362,101		$	204,684		$	605,796		$	774,091		$	1,310,396		$	243,695
Service revenue		39,665			400			102,910			700			549,924			63,245
Total revenues		401,766			205,084			708,706			774,791			1,860,320			306,940
Cost of revenues		258,612			48,045			335,407			169,594			1,190,330			76,795
Gross profit		143,154			157,039			373,299			605,197			669,990			230,145

Operating expenses		2,728,998			1,276,512			4,751,677			2,836,663			3,861,997			2,022,679

Loss from operations		(2,585,844	)		(1,119,473	)		(4,378,378	)		(2,231,466	)		(3,192,007	)		(1,792,534	)

Other income (expense):
Other income		-			221			3,582			441			-			5,564
Gain on debt extinguishment		196,889			-			196,889			-
Change in fair value of warrant liabilities														29,337			-
Interest expense		(348,008	)		(68,898	)		(740,795	)		(82,782	)		(322,227	)		(392,787	)
Other expense		(1,982	)		(42,500	)		-			(50,000	)
Other expense		(153,101	)		(111,177	)		(540,324	)		(132,341	)		(292,890	)		(387,223	)

Loss before provision for income taxes		(2,738,945	)		(1,230,650	)		(4,918,702	)		(2,363,807	)		(3,484,897	)		(2,179,757	)

Provision for income taxes		1,044			275			1,169			1,225
Provision for (benefit from) income taxes														-			125

Net loss	$	(2,739,989	)	$	(1,230,925	)	$	(4,919,871	)	$	(2,365,032	)	$	(3,484,897	)	$	(2,179,882	)

Loss per share - basic and diluted	$	(0.12	)	$	(0.33	)	$	(0.26	)	$	(0.65	)	$	(1.10	)	$	(3.58	)
Weighted average shares outstanding - basic and diluted		23,387,935			3,745,915			18,935,976			3,614,610			3,154,004			608,797

See notes to consolidated financial statements

Can B̅ Corp. and Subsidiaries

Consolidated Statement of Stockholders’ Equity

Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Total
Three Months Ended June 30, 2021 and 2020

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
Three months ended June 30, 2021

Balance, April 1, 2021 20 $ 5,539,174 - $ - 50 $ - 1,950 $ 2 16,667,655 $ 29,719,534 543,715 $ (572,678 ) $ 2,563,399 $ (32,565,906 ) $ 4,683,525

Issuance of common stock for services rendered - - - - - - - - 275,356 350,913 - - - - 350,913

Issuance of common stock warrants and commitment shares in connection with convertible promissory note - - - - - - - - - - - - 662,062 - 662,062
Issuance of common stock pursuant to note agreements
Issuance of common stock pursuant to note agreements, shares
Issuance of common stock for acquisition of intangible assets
Issuance of common stock for acquisition of intangible assets, shares
Issuance of common stock for compensation
Issuance of common stock for compensation, shares
Issuance of preferred stock
Issuance of preferred stock, shares
Conversion of Series C Preferred stock to Common stock
Conversion of Series C Preferred stock to Common stock, shares
Sale of common stock
Sale of common stock, shares
Issuance of common stock in lieu of note repayments
Issuance of common stock in lieu of note repayments, shares
Issuance of common stock for asset acquisition
Issuance of common stock for asset acquisition, shares
Issuance of common stock - reverse stock split rounding
Issuance of common stock pursuant to FirstFire note agreement
Issuance of common stock pursuant to FirstFire note agreement, shares

Net loss - - - - - - - - - - - - - (2,739,989 ) (2,739,989 )

Balance, June 30, 2021 20 $ 5,539,174 0 $ - 50 $ - 1,950 $ 2 16,943,011 $ 30,070,447 543,715 $ (572,678 ) $ 3,225,461 $ (35,305,895 ) $ 2,956,511

Three months ended June 30, 2020
��
Balance, April 1, 2020 20 $ 5,539,174 - $ - - $ - - $ - 2,861,740 $ 23,541,249 - $ - $ 1,075,176 $ (24,495,330 ) $ 5,660,269

Issuance of common stock for services rendered - - - - - - - - 132,053 183,223 - - - - 183,223

Issuance of common stock pursuant to note agreements - - - - - - - - 162,545 88,927 - - - - 88,927

Issuance of common stock for acquisition of intangible assets - - - - - - - - 235,000 201,187 - - - - 201,187

Issuance of common stock for compensation - - - - - - - - 30,000 41,625 - - - - 41,625

Net loss - - - - - - - - - - - - - (1,230,925 ) (1,230,925 )

Balance, June 30, 2020 20 $ 5,539,174 - $ - - $ - - $ - 3,421,338 $ 24,056,211 - $ - $ 1,075,176 $ (25,726,255 ) $ 4,944,306

Three Months Ended March 31, 2022 and 2021

Six Months Ended June 30, 2021 and 2020

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
Six months ended June 30, 2021

Balance, January 1, 2021 20 $ 5,539,174 - $ - - $ - - $ - 5,544,590 $ 26,111,978 543,715 $ (572,678 ) $ 2,563,399 $ (30,386,024 ) $ 3,255,849

Issuance of preferred stock - - - - 50 - 1,950 2 - - - - - - 2

Conversion of Series C Preferred stock to Common stock - - - - - - - - 3,750,000 - - - - - -

Sale of common stock - - - - - - - - 5,732,000 2,866,000 - - - - 2,866,000

Issuance of common stock in lieu of note repayments - - - - - - - - 1,155,250 537,748 - - - - 537,748

Issuance of common stock for services rendered - - - - - - - - 406,114 417,048 - - - - 417,048

Issuance of common stock for asset acquisition - - - - - - - - 355,057 137,673 - - - - 137,673

Issuance of common stock warrants and commitment shares in connection with convertible promissory note - - - - - - - - - - - - 662,062 - 662,062

Net loss - - - - - - - - - - - - - (4,919,871 ) (4,919,871 )

Balance, June 30, 2021 20 $ 5,539,174 0 $ - 50 $ - 1,950 $ 2 16,943,011 $ 30,070,447 543,715 $ (572,678 ) $ 3,225,461 $ (35,305,895 ) $ 2,956,511

Six months ended June 30, 2020

Balance, January 1, 2020 20 $ 5,539,174 - $ - - $ - - $ - 2,680,937 $ 23,113,077 - $ - $ 1,075,176 $ (23,361,223 ) $ 6,366,204

Issuance of common stock for services rendered - - - - - - - - 190,888 315,615 - - - - 315,615

Issuance of common stock - reverse stock split rounding - - - - - - - - 2,460 - - - - - -

Issuance of common stock pursuant to FirstFire note agreement - - - - - - - - 119,508 295,780 - - - - 295,780
��
Issuance of common stock pursuant to note agreements - - - - - - - - 162,545 88,927 - - - - 88,927

Issuance of common stock for acquisition of intangible assets - - - - - - - - 235,000 201,187 - - - - 201,187

Issuance of common stock for compensation - - - - - - - - 30,000 41,625 - - - - 41,625

Net loss - - - - - - - - - - - - - (2,365,032 ) (2,365,032 )

Balance, June 30, 2020 20 $ 5,539,174 - $ - - $ - - $ - 3,421,338 $ 24,056,211 - $ - $ 1,075,176 $ (25,726,255 ) $ 4,944,306

	Shares			Amount			Shares		Amount		Shares			Amount			Shares		Amount		Shares			Amount				Shares		Amount			Capital		Deficit			Total
	Series A						Series B				Series C						Series D										Common						Additional
	Preferred Stock						Preferred Stock				Preferred Stock						Preferred Stock				Common Stock					Stock		Treasury Stock					Paid-in		Accumulated
	Shares			Amount			Shares		Amount		Shares			Amount			Shares		Amount		Shares			Amount		Issuable		Shares		Amount			Capital		Deficit			Total
Three months ended March 31, 2022

Balance, January 1, 2022		20		$	28,440,000			-	$	-		23		$	207,000			1,950	$	2		2,834,755		$	49,676,847		-		36,248	$	(572,678	)	$	5,635,003	$	(77,766,659	)	$	5,619,515

Issuance of common stock for services rendered		-			-			-		-		-			-			-		-		130,825			928,929		119,586		-		-			-		-			1,102,515

Issuance of common stock for asset acquisitions		-			-			-		-		-			-			-		-		190,505			1,767,498		-		-		-			-		-			1,767,498

Sale of common stock		-			-			-		-		-			-			-		-		51,282			500,000		-		-		-			-		-			500,000

Issuance of common stock in lieu of interest payments		-			-			-		-		-			-			-		-		10,150			73,078		-		-		-			-		-			73,078

Conversion of Series A preferred stock to common stock		(15	)		(23,120,000	)		-		-		-			-			-		-		33,345			23,120,000		-		-		-			-		-			-

Issuance of common stock for property and equipment		-			-			-		-		-			-			-		-		13,704			98,666		-		-		-			-		-			98,666

Stock-based compensation		-			-			-		-		-			-			-		-		-			-				-		-			571,819		-			571,819

Net loss		-			-			-		-		-			-			-		-		-			-		-		-		-			-		(3,484,897	)		(3,484,897	)

Balance, March 31, 2022		5		$	5,320,000			-	$	-		23		$	207,000			1,950	$	2		3,264,566		$	76,219,018		119,586		36,248	$	(572,678	)	$	6,206,822	$	(81,251,556	)	$	6,248,194

Three months ended March 31, 2021

Balance, January 1, 2021		20		$	28,440,000			-	$	-		623		$	5,607,000			-	$	-		369,639		$	30,874,270		0		36,248	$	(572,678	)	$	2,724,689	$	(65,597,264	)	$	1,476,017
Beginning balance		20		$	28,440,000			-	$	-		623		$	5,607,000			-	$	-		369,639		$	30,874,270		0		36,248	$	(572,678	)	$	2,724,689	$	(65,597,264	)	$	1,476,017

Issuance of common stock for services rendered		-			-			-		-		-			-			-		-		8,717			66,135		0		-		-			-		-			66,135
																							��
Issuance of common stock in lieu of note repayments		-			-			-		-		-			-			-		-		77,017			537,748		0		-		-			-		-			537,748

Issuance of common stock for asset acquisition		-			-			-		-		-			-			-		-		23,670			137,673		0		-		-			-		-			137,673

Sale of common stock		-			-			-		-		-			-			-		-		382,133			2,866,000		0		-		-								2,866,000

Issuance of Series D preferred stock		-			-			-		-		-			-			1,950		2		-			-		0		-		-			-		-			2

Conversion of Series C preferred stock to common stock		-			-			-		-		(150	)		(1,350,000	)		-		-		250,000			1,350,000		0		-		-			-		-			-

Net loss		-			-			-		-		-			-			-		-		-			-		0		-		-			-		(2,179,882	)		(2,179,882	)

Balance, March 31, 2021		20		$	28,440,000			-	$	-		473		$	4,257,000			1,950	$	2		1,111,177		$	35,831,826		0		36,248	$	(572,678	)	$	2,724,689	$	(67,777,146	)	$	2,903,693
Ending balance		20		$	28,440,000			-	$	-		473		$	4,257,000			1,950	$	2		1,111,177		$	35,831,826		0		36,248	$	(572,678	)	$	2,724,689	$	(67,777,146	)	$	2,903,693

See notes to consolidated financial statements

Can B̅ Corp. and Subsidiaries

Consolidated Statement of Cash Flows

	2021			2020				2022			2021
	Six Months Ended						Three Months Ended
	June 30,						March 31,
	2021			2020			2022			2021
Operating activities:
Net loss	$	(4,919,871	)	$	(2,365,032	)	$	(3,484,897	)	$	(2,179,882	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		-			975,787			1,012,379			-
Depreciation		72,342			61,510			359,404			31,551
Amortization of intangible assets		103,480			277,158			10,026			43,860
Amortization of original-issue-discounts		697,594			69,645			158,815			351,535
Unrealized loss on investment		-			50,000
Bad debt expense		47,452			131,985			2,898			47,452
Forgiveness of PPP loan		(194,940	)		-
Change in fair value of warrant liabilities								(29,337	)		-
Stock-based interest expense								73,078			-
Stock-based consulting expense								1,102,515			66,135
Changes in operating assets and liabilities:
Accounts receivable		(204,274	)		(377,212	)		(791,609	)		(73,401	)
Inventory		24,711			410,664			(553,064	)		13,003
Prepaid expenses		576,376			(10,140	)		1,625			275,420
Deposits		(2,000	)		-			-			(2,000	)
Other noncurrent assets		7,347			34,625			-			7,347
Operating lease right-of-use asset		(573	)		376			(20,492	)		(155	)
Accounts payable		647,603			150,840			985,710			(24,464	)
Accrued expenses		(42,885	)		63,376			(500,185	)		(42,730	)
Net cash used in operating activities		(3,187,638	)		(526,418	)		(2,094,530	)		(1,486,329	)

Investing activities:
Note receivable		-			481
Purchase of property and equipment		(166,476	)		(16,787	)
Purchase of intangible assets		(177,530	)		-			-			(177,530	)
Investment in marketable security		-			(600,000	)
Net cash used in investing activities		(344,006	)		(616,306	)		-			(177,530	)

Financing activities:
Proceeds received from notes and loans payable		1,525,000			1,657,840			1,382,300			175,000
Proceeds from issuance of Series D Preferred Stock		2			-			-			2
Proceeds from sale of common stock		2,866,000			-			500,000			2,932,135
Repayments of notes and loans payable		(224,000	)		(70,000	)		(75,250	)		(224,000	)
Amounts repaid to related parties, net								(7,839	)		-
Deferred financing costs		-			(101,455	)		(38,690	)		-
Net cash provided by financing activities		4,167,002			1,486,385			1,760,521			2,883,137

Increase in cash and cash equivalents		635,358			343,661
(Decrease) Increase in cash and cash equivalents								(334,009	)		1,219,278	)
Cash and cash equivalents, beginning of period		457,798			46,540			449,001			457,798
Cash and cash equivalents, end of period	$	1,093,156		$	390,201		$	114,992		$	1,677,076

Supplemental Cash Flow Information:
Income taxes paid	$	1,169		$	950		$	-		$	125
Interest paid	$	4,000		$	3,206		$	47,206		$	-
Non-cash Investing and Financing Activities:
Issuance of common stock in lieu of repayments of notes payable	$	537,748		$	384,707		$	-		$	537,748
Amortization of prepaid issuance of common stock for services rendered	$	-		$	618,547
Issuance of common stock for property and equipment							$	98,666		$	-
Issuance of common stock in asset acquisitions	$	137,673		$	201,187		$	1,767,498		$	137,673
Issuance of common stock for services rendered	$	417,048		$	-
Issuance of common stock warrants and commitment shares in connection with convertible promissory note	$	662,062		$	-
Conversion of Series A Preferred stock to common stock							$	23,120,000		$	-
Debt discount associated with warrant liabilities							$	225,015		$	-

See notes to consolidated financial statements

Can B̅ Corp. and Subsidiaries

Notes to Consolidated Financial Statements

~~June 30, 2021~~March 31, 2022

Note 1 – Organization and Description of Business

Can B̅ Corp. was originally incorporated as WrapMail, Inc. (“WRAP”) in Florida on October 11, 2005. On May 15, 2017, WRAP changed its name to Canbiola, Inc. On January 16, 2020 Canbiola, Inc. changed its name to Can B̅ Corp. (the “Company”, “we”, “us”, “our”, “CANB”, “Can B̅” or “Registrant”).

The Company acquired 100% of the membership interests in Pure Health Products, LLC, a New York limited liability company (“PHP” or “Pure Health Products”) effective December 28, 2018. The Company runs it manufacturing operations through PHP and holds and sells several of its brands through PHP as well. The Company’s durable equipment products, such as sam® units with and without CBD infused pads, are marketed and sold through its wholly-owned subsidiaries, Duramed Inc. (incorporated on November 29, 2018) and Duramed MI LLC (fka DuramedNJ, LLC) (incorporated on May 29, 2019) (collectively, “Duramed”). Duramed began operating on or about February 1, 2019. Most of the Company’s consumer products include hemp derived cannabidiol (“CBD”); however, the Company has just recently begun extracting cannabinol (“CBN”) and cannabigerol (“CBG”) for wholesale to third-parties looking to incorporate such compounds into their products through its wholly owned ~~subsidiary, Botantical~~subsidiaries, Botanical Biotech, LLC (incorporated March 10, 2021), TN Botanicals, LLC and CO Botanicals LLC (both incorporated in August 2021). ~~Botanical Biotech has~~These three subsidiaries have also begun synthesizing ~~delta-8~~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 is~~Delta-8 and Delta-10 are in a gray area and considered a potential loophole at this point due to the 2018 hemp bill. The Company’s other subsidiaries did not have operations during the ~~six months~~year ended ~~June 30,~~December 31, 2021.

The Company is in the business of promoting health and wellness through its development, manufacture and sale of products containing cannabinoids derived from hemp biomass and the licensing of durable medical devises. Can B̅’s products include oils, creams, moisturizers, isolate, gel caps, spa products, and concentrates and lifestyle products. Can B̅ develops its own line of proprietary products as well seeks synergistic value through acquisitions in the hemp industry. Can B̅ aims to be the premier provider of the highest quality hemp derived products on the market through sourcing the best raw material and offering a variety of products we believe will improve people’s lives in a variety of areas.

Note 2 – Liquidity

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 ~~June 30, 2021,~~March 31, 2022, the Company had cash and cash equivalents of $~~1,093,156~~ 114,992and anegative working capital of $~~1,040,562.~~1,948,751 . For the periods ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company had ~~net loss~~incurred losses of $~~4,919,871~~3,484,897 and $2,179,882 $~~2,365,032~~, 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 ~~sales~~the 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.

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

Basis of Financial Statement Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information, and with the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, these interim consolidated financial statements do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of the management of the Company, as defined below, these unaudited consolidated financial statements include all adjustments necessary to present fairly the information set forth therein. Results for interim periods are not necessarily indicative of results to be expected for a full year.

The consolidated balance sheet information as of December 31, ~~2020~~2021 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 (“~~2020~~2021 Form 10-K”). The interim consolidated financial statements contained herein should be read in conjunction with the ~~2020~~2021 Form 10-K.

Can B̅ Corp. and Subsidiaries

Notes to Consolidated Financial Statements

March 31, 2022

Principles of Consolidation

The unaudited consolidated financial statements contained herein include the accounts of Can B Corp. and its ~~wholly-owned~~wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated.

~~Can B̅ Corp. and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~June 30, 2021~~

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.

Management Estimates

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses in those financial statements. Certain significant accounting policies that contain subjective management estimates and assumptions include those related to revenue recognition, inventory, goodwill, intangible assets and other long-lived assets, income taxes and deferred taxes. Descriptions of these policies are discussed in the Company’s ~~2020~~2021 Form 10-K. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and adjusts when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods.

Significant Accounting Policies

The Company’s significant accounting policies are described in “Note 3: Summary of Significant Accounting Policies” of our ~~2020~~2021 Form 10-K.

~~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:

~~In 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~~Can B̅ Corp. and Subsidiaries

Notes 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 equity 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.Consolidated Financial Statements

March 31, 2022

Segment reporting

As of ~~June 30, 2021,~~March 31, 2022, the Company reports operating results and financial data in one operating and reportable segment. The Chief Executive Officer, who is the chief operating decision maker, manages the Company as a single profit center in order to promote collaboration, provide comprehensive service offerings across the entire customer base, and provide incentives to employees based on the success of the organization as a whole. Although certain information regarding selected products or services is discussed for purposes of promoting an understanding of the Company’s business, the chief operating decision maker manages the Company and allocates resources at the consolidated level.

~~Can B̅ Corp. and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~June 30, 2021~~

Reclassifications

Certain amounts in the prior year consolidated financial statements have been reclassified to conform to the current year presentation. These reclassification adjustments had no effect on the Company’s previously reported net loss.

Note 4 – Fair Value Measurements

The carrying value and fair value of the Company’s financial instruments are as follows:

Schedule of Carrying Value and Fair value

March 31, 2022
	Level 1		Level 2		Level 3		Total
Liabilities
Warrant liabilities	$	—	$	—	$	195,678	$	195,678

As of December 31, 2021

Level 1

Level 2

Level 3

Total

Liabilities

Warrant liabilities

—

The fair value of the warrants outstanding was estimated using the Black-Scholes model. The application of the Black-Scholes model requires the use of a number of inputs and significant assumptions including volatility. The following reflects the inputs and assumptions used:

Schedule of Fair Value of the Warrants Outstanding

As of
		March 31, 2022		December 31, 2021
Stock price	$	5.55		N/A
Exercise price	$	6.40		N/A
Remaining term (in years)		0.98		N/A
Volatility		110	%	N/A
Risk-free rate		1.63	%	N/A
Expected dividend yield		—	%	—

The warrant liabilities will be remeasured at each reporting period with changes in fair value recorded in other income (expense), net on the consolidated statements of operations. The change in fair value of the warrant liabilities was as follows:

Schedule of Change in Fair Value of the Warrant Liabilities

Warrant Liabilities
Estimated fair value at March 22, 2022	$	225,015
Change in fair value		(29,337	)
Estimated fair value at March 31, 2022	$	195,678

Can B̅ Corp. and Subsidiaries

Notes to Consolidated Financial Statements

March 31, 2022

Note 45 – Asset Acquisitions

Botanical Biotech Asset Acquisition

On March 11, 2021, Company entered into an Asset Acquisition Agreement, 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 (“Transferee” or “BB”). The assets purchased (“BB Assets”) include certain materials and manufacturing equipment, 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. In exchange for the BB Assets the Company will pay the Seller a maximum of $355,057, payable half in the form of cash or cash equivalent and half in the form of restricted shares of common stock of the Company (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%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 Option 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 the 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 compensation equal to $10,000 per month. Schlosser will also be entitled to reimbursement for certain work-related expenses. Pursuant to the Schlosser 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 confidentiality provisions. Per the Acquisition Agreement, Schlosser was to receive an employment agreement similar to the Lebsock Agreement; however, BB and Schlosser elected to enter into the Schlosser Agreement instead.

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. During the period ending March 31, 2022, the $1,750,000 of shares held in escrow were released and issued.

910

Can B̅ Corp. and Subsidiaries

Notes to Consolidated Financial Statements

~~June 30, 2021~~March 31, 2022

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 $120,000 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 $102,502 worth of shares were issued on November 7, 2021 and the remaining balance of $17,498 of shares were issued during the period ending March 31, 2022.

Note 56 – Inventories

Inventories consist of:

Schedule of Inventories

Inventory
	June 30,		December 31,		March 31,		December 31,
	2021		2020		2022		2021
Raw materials	$	273,333	$	294,522	$	1,033,171	$	818,042
Finished goods		46,910		50,432		2,054,167		1,735,396
Total	$	320,243	$	344,954	$	3,087,338	$	2,553,438

Note 67 – Property and Equipment

Property and equipment consist of:

Summary of Property, Plant and Equipment

	June 30,			December 31,			March 31,			December 31,
	2021			2020			2022			2021
Furniture and fixtures	$	21,724		$	21,727		$	21,724		$	21,724
Office equipment		12,378			12,378			12,378			12,378
Manufacturing equipment		561,328			397,230			7,117,188			7,018,522
Medical equipment		776,396			776,392			776,396			776,396
Leasehold improvements		26,902			26,902			26,902			26,902
Total		1,398,728			1,234,629			7,954,588			7,855,922
Accumulated depreciation		(309,615	)		(239,650	)		(1,162,400	)		(802,996	)
Net	$	1,089,113		$	994,979		$	6,792,188		$	7,052,926

Depreciation expense related to property and equipment was $~~72,342~~359,404 and $~~61,510~~31,551 for the ~~six month~~three-month periods ending ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively.

Note 78 – ~~Goodwill and~~ Intangible Assets

Intangible assets consist of:

Schedule of Intangible Assets

	June 30,			December 31,			March 31,			December 31,
	2021			2020			2022			2021
Technology, IP and patents	$	989,443		$	674,240		$	435,500		$	418,003
Hemp processing registration		85,200			85,200
Total		1,074,643			759,440			435,500			418,003
Accumulated amortization		(339,911	)		(236,431	)		(59,014	)		(48,988	)
Intangible assets, net	$	734,732		$	523,009		$	376,486		$	369,015

Amortization expense was $~~103,480~~10,026 and $~~277,158~~43,860 for the ~~six~~three months ended ~~2021~~March 31, 2022 and ~~2020,~~2021, respectively.

Can B̅ Corp. and Subsidiaries

Notes to Consolidated Financial Statements

March 31, 2022

Amortization expense for the balance of ~~2021,~~2022, and for each of the next five years and thereafter is estimated to be as follows:

Schedule of Estimated ~~Future~~ Amortization ~~Expense~~Expenses

2021
Six months ended December 31, 2021 $ 48,556
Fiscal year 2022 97,112
Fiscal year 2023 97,112
Fiscal year 2024 97,112
Fiscal year 2025 86,970
Thereafter 307,870
Intangible assets, net $ 734,732

~~There was no goodwill activity during the six months ended June 30, 2021 and 2020.~~

~~Can B̅ Corp. and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~June 30, 2021~~


Nine months ended December 31, 2022	$	32,640
Fiscal year 2023		43,520
Fiscal year 2024		43,520
Fiscal year 2025		43,520
Fiscal year 2026		43,520
Thereafter		169,766
Intangible assets, net	$	376,486

Note 89 – Notes and Loans Payable

Convertible Promissory Notes

In December 2020, the Company entered into a convertible promissory note (“ASOP Note I”) with Arena Special Opportunities Partners I, LP (“ASOP”). The 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 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 3,426,280 common stock warrants. The common 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 promissory 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 six months ended June 30, 2021 and 2020 was approximately $533,000~~ ~~and $~~0~~, respectively.~~ The principal balance outstanding at ~~June 30, 2021~~March 31, 2022 was $~~2,286,792~~2,400,997.

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 derivative 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~~$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 six months ended June 30, 2021 and 2020 was approximately $22,000~~ ~~and $~~0~~, respectively.~~ The principal balance outstanding at ~~June 30, 2021~~March 31, 2022 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, 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 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 six months ended June 30, 2021 and 2020 was approximately $90,000~~ ~~and $~~0~~, respectively.~~ The principal balance outstanding at ~~June 30, 2021~~March 31, 2022 was $1,073,250.

Can B̅ Corp. and Subsidiaries

Notes to Consolidated Financial Statements

March 31, 2022

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~~$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. The principal balance outstanding at March 31, 2022 was $276,750.

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 $100,000 per extension. The holders also waived certain defaults under the notes. The Company has since elected to extend the maturity date to May 31, 2022 for the promise to pay an additional $100,000.

In March 2022, the Company entered into a convertible promissory note (“BL Note”) with Blue Lake Partners, LLC (“BL”). The principal balance of the note is $250,000 and it is to be utilized for working capital purposes. The note matures on March 22, 2023 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 BL Note was issued with 39,062 common stock warrants. The common stock purchase warrants entitle the holder to purchase an aggregate of up to 39,062 shares of the Company’s common stock at an exercise price of $6.40 per share. The common stock purchase warrants issued to BL are considered derivatives and did not satisfy the criteria for classification as equity instruments and were bifurcated from the host contract - convertible promissory note and recorded as a liability at fair value with a corresponding debt discount recorded to the BL Note with subsequent changes in fair values recognized in the consolidated statement of operations at each reporting date. Aggregate amortization of the original issue discount for the ~~six months~~period ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ was approximately $~~23,000~~0 and $0, respectively. The principal balance outstanding at ~~June 30, 2021~~March 31, 2022 was $~~276,750~~250,000.

~~Can B̅ Corp.~~In March 2022, the Company entered into a convertible promissory note (“MH Note”) with Mast Hill Fund, LP (“MH”). The principal balance of the note is $350,000 and ~~Subsidiaries~~it is to be utilized for working capital purposes. The note matures on March 22, 2023 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 BL Note was issued with 39,062 common stock warrants. The common stock purchase warrants entitle the holder to purchase an aggregate of up to 39,062 shares of the Company’s common stock at an exercise price of $6.40 per share. The common stock purchase warrants issued to BL are considered derivatives and did not satisfy the criteria for classification as equity instruments and were bifurcated from the host contract - convertible promissory note and recorded as a liability at fair value with a corresponding debt discount recorded to the BL Note with subsequent changes in fair values recognized in the consolidated statement of operations at each reporting date. Aggregate amortization of the original issue discount for the period ended March 31, 2022 and 2021 was approximately $0 and $0, respectively. The principal balance outstanding at March 31, 2022 was $350,000.

~~Notes to Consolidated Financial Statements~~

~~June 30, 2021~~In February 2022, the Company entered into a convertible promissory note (“Tysadco Note”) with Tysadco Partners, LLC (“Tysadco”). The principal balance of the note is $450,000 and it is to be utilized for working capital purposes. The note matures on July 25, 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. The principal balance outstanding at March 31, 2022 was $350,000 and the remaining $100,000 of proceeds was received subsequently in April 2022.

~~PPP Loan~~TWS Note

~~In 2020,~~On August 12, 2021, pursuant to an Equipment Acquisition Agreement, the Company ~~received~~entered into 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”)twelve-month promissory note of $~~194,940~~1,250,000 with payments of $100,000 per month and interest at 6% (See Note 5). As of March 31, 2022, the total amount outstanding was $1,050,000.

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 on extinguishment of debt on the Consolidated Statements of Operations.~~

~~Related Party Loan~~Other Loans

~~In 2020,~~On November 18, 2021, the Company entered into a ~~loan payable to a director of the Company~~$100,000 unsecured promissory note agreement with a ~~principal balance of $224,000~~.lender. The ~~loan bore~~promissory note accrues interest at a rate of ~~12%~~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. As of March 31, 2022 the total amount outstanding was $100,000.

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. As of March 31, 2022 the total amount outstanding was $116,167.

On February 11, 2022, the Company entered into a $150,000 unsecured promissory note agreement with a lender. The promissory note accrues interest at a rate of 16% per annum and is due within six months or due on demand subsequently to any major funding received by the Company in ~~December 2020.~~excess of $2,000,000. As of March 31, 2022 the total amount outstanding was $150,000.

On March 3, 2022, the Company entered into a Receivable Purchase and Sale Agreement with a Buyer. Pursuant to the terms of the agreement, the Company sold an aggregate of $350,00 of future receivables for a purchase amount of $250,000. The ~~Company subsequently paid~~aggregate principal amount is payable in daily installments totaling 2,917 until such time the ~~loan in full in February 2021.~~obligation is fully satisfied. As of March 31, 2022 the total amount outstanding was $182,083.

Note 910 – Stockholders’ Equity

Preferred Stock

Each share of Series A Preferred Stock is convertible into ~~33,334~~218 shares of CANB common stock and is entitled to ~~66,666 votes.~~4,444 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. During the three months ended March 31, 2022, the Company converted 15 shares of Series A preferred stock to 33,345 shares of common stock.

Can B̅ Corp. and Subsidiaries

Notes to Consolidated Financial Statements

March 31, 2022

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.

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 can redeem Series D Preferred Stock at any time for par value.

~~Can B̅ Corp. and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~June 30, 2021~~

On February 8, 2021, the Company’s Board of Directors approved the designation of the Series D Preferred Shares and the number of shares constituting such series, and the rights, powers, preferences, privileges and restrictions relating to such series. On March 27, 2021, the Company filed an amendment to its articles of incorporation to authorize 4,000 shares of a new Series D Preferred Stock with a par value of ~~$0.001~~$0.001 each. All Series D 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. Each Series D Preferred Share shall have voting rights equal to ~~10,000~~667 shares of Common Stock, adjustable at any recapitalization of the Company’s stock. In the event of a liquidation event, whether voluntary or involuntary, each holder shall have a liquidation preference on a per-share amount equal to the par value of such 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 Series D Preferred Shares being purchased multiplied by the Price per Share. The shares of Series D Preferred Shares so purchased shall be deemed automatically cancelled and the Holder shall return the certificates for such share to the Corporation. On or around March 27, 2021, the Company issued Mr. Alfonsi, Mr. Ferro, and Mr. Teeple Series D Preferred Stock in the amount of 600 shares each and to COO Philip Scala in the amount of 150 shares, collectively representing ~~19,500,000~~1,300,000 voting ~~shares.~~shares.

Common Stock

For the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, the Company issued an aggregate of ~~5,732,000~~51,282 shares of Common Stock under its Offering Statement on Form 1-A (File No. 024-11233) (the “Regulation A Offering”).

In addition, for the three months ended March 31, 2022, the Company issued an aggregate of 190,505, 13,704, 130,825, and 10,150 of Common Stock for asset acquisitions, property and equipment, services rendered, and in lieu of interest repayments, respectively.

Can B̅ Corp. and Subsidiaries

Notes to Consolidated Financial Statements

March 31, 2022

Note 1011 – Stock Options

A summary of stock options activity for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 is as follows:

Summary of Stock Options Activity

	Option Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Option Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
Outstanding, January 1, 2021		1,197,199	$	0.36		4.42
Outstanding, January 1, 2022								377,654	$	6.11		4.46
Granted		561,920	$	0.46		4.82		79,013		5.10		4.77
Exercised		-		-		-		-		-		-
Forfeited		-		-		-		-		-		-
Expired		-		-		-		-		-		-
Outstanding, June 30, 2021		1,759,119	$	0.39		4.53
Outstanding, March 31, 2022								456,666	$	5.93		4.31

Schedule of Non-Vested Option Shares

	Option Shares		Weighted Average Grant-Date Fair Value		Option Shares			Weighted Average Grant-Date Fair Value
Non-vested options, January 1, 2021		1,197,199	$	0.35
Non-vested options, January 1, 2022						-		$	-
Granted		561,920	$	0.46		79,013			7.24
Vested		-		-		(79,013	)		7.24
Forfeited		-		-		-			-
Non-vested options, June 30, 2021	$	1,759,119	$	0.36
Non-vested options, March 31, 2022						-		$	-

Note 1112 – Income Taxes

The Company’s income tax provisions for the ~~six and~~ three months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ reflect the Company’s estimates of the effective rates expected to be applicable for the respective full years, adjusted for any discrete events, which are recorded in the period that they occur. These estimates are reevaluated each quarter based on the Company’s estimated tax expense for the full year. The estimated effective tax rate includes the impact of valuation allowances in various jurisdictions.

Note 1213 – Related Party Transactions

For the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company paid fees to a service provider that is a relative of a director for professional services in the amount of $~~$9,900~~0 and $9,900, respectively. At March 31, 2022 and December 31, 2021, the Company had outstanding payables to the aforementioned service provider of $~~42,600~~0 and $5,000, respectively.

At March 31, 2022, the Company has amounts due to a director of the Company of approximately $210,434 which are expected to be repaid in the next twelve months.

1315

Can B̅ Corp. and Subsidiaries

Notes to Consolidated Financial Statements

~~June 30, 2021~~March 31, 2022

Note 1314 – Commitments and Contingencies

~~Employment Agreements~~

On December 28, 2020, the Company entered into new three-year Employment Agreements with CEO Marco Alfonsi, CFO Stanley Teeple, and Pure Health Products LLC Pasquale Ferro. Under these agreements, they are 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, 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 Advisory Agreement, 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 after. At CANB’s option, the monthly 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 a quarterly basis prior to each 90-day period and based on the value at the closing price on the last day of the preceding period. All common shares earned by the Consultant pursuant to this Agreement shall be issued by CANB on a quarterly basis.

Lease Agreements

~~We determine if a contract contains a lease at inception. Our material operating lease is office space. Our leases generally have remaining terms of~~ 1-3 ~~years. Generally, the lease term is the minimum of the noncancelable period of the lease or the lease term inclusive of reasonably certain renewal periods.~~

Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent our right to use an

underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases. Our leases typically contain rent escalations over the lease term. We recognize expense for these leases on a straight-line basis over the lease term.

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

Rent expense for the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ was $~~$84,724~~203,017 and $~~$121,652~~71,448, respectively.

At ~~June 30, 2021,~~March 31, 2022, the future minimum lease payments under non-cancellable operating leases were:

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

2021
Six months ended December 31, 2021 $ 23,527
Fiscal year 2022
14,259

Total $ 37,786


Nine months ended December 31, 2022	$	809,010
Fiscal year 2023		832,893
Fiscal year 2024		326,974
Total	$	1,968,877

Note 1415 – Subsequent Events

On April 13, 2022, the Company entered into an Amendment to Transactional Documents 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 $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 notes and granted consents required under the notes. The Company has elected to extend the maturity of the notes to May 31, 2022, for an additional $100,000 to be paid from future offering proceeds.

On April 24, 2022, the Company entered into securities purchase agreements and related agreements with an investor for the sale of $150,000 in a convertible promissory note and warrants.

The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the condensed consolidated financial statements are issued and as of that date, except as reported below, there were no subsequent events that required adjustment or disclosure in the consolidated financial statements.

On August 12, 2021 the Company entered into an Equipment Acquisition Agreement with TWS Pharma, LLC, a Wisconsin limited liability company and L7 TWS Pharma, LLC, a Wisconsin limited liability company (collectively, “TWS”) pursuant to which the Company agreed to purchase certain equipment and inventory from TWS for a total purchase price equal to $~~5,316,774, with $1,250,000~~ ~~payable in a 12-month promissory note with~~ 6~~% simple interest and monthly payments of $100,000~~ ~~due per month, and $4,066,774~~ ~~payable in shares of the Company’s common stock valued at $0.62~~ ~~per share; provided, however, that~~ the Company will withhold $1,750,000 of the shares for a period of ninety (90) days from the closing date. The first $500,000 of payments of the promissory note will be secured by 1,000,000 shares of CANB’s common stock.

On August 13, 2021 the Company entered into an Asset Purchase Agreement with Music City Botanicals, LLC, a Wisconsin limited liability company (“MCB”) pursuant to which the Company agreed to purchase certain equipment, inventory, and intellectual property from MCB 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.~~

1416

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company acquired 100% of the membership interests in Pure Health Products, LLC, a New York limited liability company (“PHP” or “Pure Health Products”) effective December 28, 2018. The Company runs it manufacturing operations through PHP and holds and sells several of its brands through PHP as well. The Company’s durable equipment products, such as sam® units with and without CBD infused pads, are marketed and sold through its wholly-owned subsidiaries, Duramed Inc. (incorporated on November 29, 2018) and Duramed MI LLC (fka DuramedNJ, LLC) (incorporated on May 29, 2019) (collectively, “Duramed”). Duramed began operating on or about February 1, 2019. Most of the Company’s consumer products include hemp derived cannabidiol (“CBD”); however, the Company has just recently begun extracting cannabinol (“CBN”) and cannabigerol (“CBG”) for wholesale to third-parties looking to incorporate such compounds into their products through its wholly owned ~~subsidiary, Botantical~~subsidiaries, Botanical Biotech, LLC (incorporated March 10, 2021) and TN Botanicals LLC and CO Botanicals LLC (both incorporated in August 2021). ~~Botanical Biotech has~~The three subsidiaries have also begun synthesizing ~~delta-8~~Delta-8 and Delta-10 from hemp. Delta-8 can produce similar, though less potent, effects as delta-9 (commonly referred to as THC); however, the legality of hemp derived delta-8 is in a gray ~~area and considered a potential loophole at this point due to the 2018 hemp bill.~~area. The Company’s other subsidiaries did not have operations during the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022.

The consolidated financial statements include the accounts of CANB and its operational wholly owned subsidiaries.

Results of Operations

Three months ended ~~June 30, 2021~~March 31, 2022 compared to three months ended ~~June 30, 2020.~~March 31, 2021.

Revenues increased ~~$196,682~~$1,553,380 from ~~$205,084~~$306,940 in ~~2020~~2021 to ~~$401,766~~$1,860,320 in ~~2021.~~2022. The increase ~~was~~is due to the ~~resumption~~wind down of restrictions related to the Covid-19 Pandemic surrounding elective surgeries, enabling an increase in ~~2021 which were temporarily paused through Q2 of 2020 due to~~ the ~~impact of the COVID-19 outbreak. Medical durable equipment utilized in elective surgeries is the Company’s primary medical device revenue. In addition, the increase was related to operations~~usage of the Company’s ~~delta-8 synthesizing business which began~~Duramed product lines and ultrasound device associated with patient recovery. Additionally, due to asset acquisitions in ~~March 2021.~~2021, the Company’s Music City Botanical and Botanical Biotech brands related to an increase of sales compared to 2021 of $564,643.

Cost of ~~product sales~~revenues increased ~~$210,567~~$1,113,535 from ~~$48,045~~$76,795 in ~~2020~~2021 to ~~$258,612~~$1,190,330 in ~~2021~~2022 due to the increase in sales ~~caused by increase~~and overall operations in ~~elective surgeries.~~the three months ended March 31, 2022.

Operating expenses increased ~~$1,452,486~~$1,839,318 from ~~$1,276,512~~$2,022,679 in ~~2020~~2021 to ~~$2,728,998~~$3,861,997 in ~~2021~~2022 as a direct result of professional fees ~~incurred~~ and ~~attributable~~other accounting and legal fees related to the Company’s ~~asset acquisitions and Regulation A offering.~~registration statement S-1 filing efforts.

Net loss increased ~~$1,509,064~~$1,305,015 from ~~$1,230,925~~$2,179,757 in ~~2020~~2021 to ~~$2,739,989~~$3,484,897 in ~~2021.~~2022. The increase was due to the ~~$1,452,486~~$1,839,318 increase in total operating expenses ~~coupled by~~net of the ~~$13,885 decrease~~$439,845 increase in gross profit.

~~Six months ended June 30, 2021 compared to six months ended June 30, 2020.~~

Revenues decreased $66,085 from $774,791 in 2020 to $708,706 in 2021. The decrease was due to the impact of the COVID-19 outbreak through the end of Q1 2021. The Company began to rebound and increase revenues compared to prior periods in Q2 of 2021 due to the resumption and surge of elective surgeries in Q2 2021. In addition, certain distributors lost clients due to business closings which had an additional impact on the Company’s overall revenue activity.

Cost of product sales increased $165,813 from $169,594 in 2020 to $335,407 in 2021 due to increase of inventory pricing in 2021 as well as operations of the Company’s delta-8 synthesizing business which began in March 2021.

Operating expenses increased $1,915,014 from $2,836,663 in 2020 to $4,751,677 in 2021 as a direct result of professional fees incurred and attributable to the Company’s asset acquisitions and Regulation A offering.

Net loss increased $2,554,839 from $2,365,032 in 2020 to $4,919,871 in 2021. The increase was due to the $1,915,014 increase in total operating expenses coupled by the $658,013 increase in interest expense, contrasted by gain on debt extinguishment of $196,899 due to forgiveness of the Company’s PPP loan.

Liquidity and Capital Resources

At ~~June 30, 2021,~~March 31, 2022, the Company had cash and cash equivalents of ~~$1,093,156~~$114,992 and anegative working capital of ~~$1,040,562.~~$1,948,751. Cash and cash equivalents ~~increased $635,358~~decreased $334,009 from ~~$457,798~~$449,001 at December 31, ~~2020~~2021 to ~~$1,093,156~~$114,992 at ~~June 30, 2021.~~March 31, 2022 . For the ~~six~~three months ended ~~June 30, 2021, $4,167,002~~March 31, 2022, $1,760,521 was provided by financing activities ~~$3,187,638~~and $2,094,530 was used in operating ~~activities, and $344,006 was used in investing~~ activities.

The Company currently has no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.

We have no off-balance sheet arrangements.

Trend Information

The novel coronavirus disease of 2019 (“COVID-19”) outbreak has affected the Company’s operations as set forth above. The full impact of the COVID-19 outbreak continues to evolve. As such, it is uncertain as to the full magnitude that the pandemic will have on our financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on our financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, we are not able to estimate the effects of the COVID-19 outbreak on our results of operations, financial condition, or liquidity for the foreseeable future, however, as a direct result of medical offices closure in our primary area of operations, our sales for third quarter are down approximately 60% year over year and quarter over quarter. During the course of the pandemic situation, the Company laid off 80% of its workforce in the CBD business and are just now recovering those operations. Our inventory increased to over $500,000 due to lack of sales, but fortunately, the product shelf life exceeds two years so as sales increase, we expect inventory levels to level off at close to $200,000. Our Duramed division was tasked with 90% of the affiliate doctors ceasing operations for period from 4-8 months and are just now recovering full operations.future. Presently, our Duramed operations are at ~~60%~~80% of pre-COVID operational level. Our expectation that as business open, and in particular medical offices, that our recovery will progress in sync with the speed of the business openings and expect to be back to pre-COVID operational level by end of the 2^nd quarter 2022. Sales of CBD and related products continue to moderately recover and we expect to be back at pre-COVID levels by the end of the 3^rd quarter ~~2021.~~2022.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

None.

ITEM 4. CONTROLS AND PROCEDURES

(A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

As of March 31, ~~2021,~~2022, our principal executive officer and principal financial officer conducted an evaluation regarding the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act). Based upon the evaluation of these controls and procedures, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report.

1617

(B) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in our internal control over financial reporting in our fiscal quarter for the period March 31, ~~2021~~2022 covered by this Quarterly Report on Form 10-Q, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

PART ~~II-OTHER~~II- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On April 28, 2021, the Company was served with a commercial legal action against the Company and certain officers by ~~two~~David Weissberg and Donna Marino, who are investors ofin 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 ~~including breach~~.

The first cause of ~~contract~~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 ~~misrepresentations.~~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.

~~We have consulted with attorneys and believe~~The second cause of action is similar to the ~~Investors’ complaints are without merit, factually inaccurate, and frivolous. We intend~~first but related to ~~vigorously defend ourselves~~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.

Around November 24, 2021, a vendor of the Company filed amended suit against the ~~aforementioned legal action~~Company in Florida, Case No. 2021 CA 001797, for monies allegedly owed and ~~will likely bring counterclaims~~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 ~~Investors.~~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.

ITEM 1A. RISK FACTORS

As a smaller reporting company, we are not required to provide risk factors in this Form 10-Q, however The Company has been directly impacted and has experienced moderate interruption during this challenging COVID-19 pandemic. In accordance with applicable federal and state guidelines, the Company has implemented and prioritized strict social distancing measures, good manufacturing practices, proper sanitization measures, and new manufacturing guidelines. Although several Company customers have experienced business shutdowns during the last few weeks, this has dramatically impacted our online ordering and/or initiating new direct shipment orders. Additional COVID operating requirements to insure safety, handling requirements, sanitation requirements have placed a significant burden on order processing and fulfilment.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Sales of unregistered securities during the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 are as follows:

From January 1, ~~2021~~2022 through ~~June 30, 2021~~March 31, 2022 the Company issued an aggregate of ~~5,732,000~~51,282 shares of Common Stock under its Reg A-1 registration currently in effect and an additional ~~406,114~~130,825 shares of common stock to various consultants for services.

From January 1, ~~2021~~2022 through ~~June 30, 2021~~March 31, 2022 the Company issued an aggregate of ~~355,057~~190,505 and 13,704 shares of Common Stock under anvarious asset acquisition ~~agreement with Botanical Biotech.~~agreements and acquisition of property and equipment, respectively.

From January 1, ~~2021~~2022 through ~~June 30, 2021~~March 31, 2022 the Company issued an aggregate of ~~1,155,250~~10,150 shares of Common Stock under various ~~note~~interest conversion agreements.

From January 1, ~~2021~~2022 through ~~June 30, 2021~~March 31, 2022 the Company ~~issued an aggregate of 150~~converted 15 shares of Series A Preferred ~~C shares under multiple employment agreements. The Preferred C shares converted~~Stock to ~~3,750,000~~33,345 shares of Common ~~Stock upon issuance.~~Stock.

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 “sophisticated person”, inasmuch as each of them 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 pursuant to Section 4(a)(2) and/or Regulation D of the Securities Act of 1933.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following exhibits are filed with this offering circular:

Exhibit		Description

~~2.1~~		~~Share Purchase Agreement with Prosperity Systems, Inc., dated January 5, 2015(2)~~
~~2.2~~		~~Membership Purchase Agreement with Pure Health Products(6)~~
~~2.3~~		~~Green Grow Stock Purchase Agreement(4)~~
~~2.4~~		~~Green Grow Modification Agreement(1)~~
3.1		Articles of Incorporation, as amended(1)
3.2		Bylaws(2)
4.1		Articles of Amendment designating Series A Preferred Stock rights, as amended(9)
4~~4.2~~.2		Articles of Amendment designating Series B Preferred Stock rights(1)
4.3		Articles of Amendment designating Series C Preferred Stock rights(7)
4.4		Articles of Amendment designating Series D Preferred Stock rights(10)
10.1		Employment Agreement with Marco Alfonsi dated December 29, 2020(10)
10.2		Employment Agreement with Stanley L. Teeple dated December 29, 2020(10)
10.3		Employment Agreement with Pasquale Ferro dated December 29, 2020(10)
10.4		Employment Agreement with Phil Scala dated December 29, 2020(10)
10.5		Commission Agreement with Andrew Holtmeyer(10)
10.6		Employment Agreement with Bradley Lebsock(10)
10.7		~~Consulting Agreement with Jordan Schlosser(10)~~
~~10.8~~		Memorandum of Understanding with Sam International and ZetrOZ Systems LLC(3)
~~10.9~~		~~Settlement Agreement with Lifeguard Licensing Corp.(11)~~
~~10.10~~10.8		Can B̅ Corp. 2020 Incentive Stock Option Plan(8)
~~10.11~~10.9		~~2020~~ Arena Securities Purchase Agreement(10)
~~10.12~~10.10		~~2020~~ ASOF Original Issue Discount Senior Secured Convertible Promissory Note(10)
~~10.13~~10.11		~~2020~~ ASOF Warrant to Purchase Common Stock(10)
~~10.14~~10.12		~~2020~~ ASOP Original Issue Discount Senior Secured Convertible Promissory Note(10)
~~10.15~~10.14		~~2020~~ ASOP Warrant to Purchase Common Stock(10)
10.15		Arena Security Agreement(10)
10.16		~~2020~~ Arena Intellectual Property Security Agreement(10)
10.17		~~2020~~ Arena ~~Intellectual Property Security~~Registration Rights Agreement(10)
10.18		~~2020~~ Arena ~~Registration Rights~~Holding Escrow Agreement(10)
10.19		~~2020 Arena Holding Escrow Agreement(10)~~
~~10.20~~		~~2020~~ Arena Guaranty Agreement from Company Subsidiaries(10)
~~10.21~~10.20		Amendment to 2020 ASOF Promissory Note(11)
~~10.22~~10.21		Amendment to 2020 ASOP Promissory Note(11)
~~10.23~~10.22		2021 Arena Securities Purchase Agreement(11)
~~10.24~~10.23		2021 ASOF Original Issue Discount Senior Secured Convertible Promissory Note(11)
~~10.25~~10.24		2021 ASOF Warrant to Purchase Common Stock(11)
~~10.26~~10.25		2021 ASOP Original Issue Discount Senior Secured Convertible Promissory Note(11)
~~10.27~~10.26		2021 ASOP Warrant to Purchase Common Stock(11)
~~10.28~~10.27		2021 Arena Registration Rights Agreement(11)
~~10.29~~10.28		2021 Addendum to Arena Security Agreement(11)
~~10.30~~10.29		2021 Addendum to Arena Intellectual Property Security Agreement(11)
~~10.31~~10.30		2021 Addendum to Arena Guaranty Agreement from Company Subsidiaries(11)
~~10.32~~10.31		Asset Acquisition Agreement with Imbibe(10)
10.32		Equipment Acquisition Agreement with TWS(12)
10.33		Promissory Note to TWS(12)
10.34		Asset Purchase Agreement with MCB(12)

10.35		Commercial Lease with Makers Developments LLC(13)
~~10.33~~10.36		Single-Tenant NNN Lease Agreement with CS2 Real Estate Holdings, LLC(13)
10.37		Commercial Lease with Red Road Business Park(13)
10.38		Asset Acquisition Agreement with various Sellers (Botanical Biotech)(10)
~~10.34~~10.39		~~Equipment Acquisition Agreement with TWS~~PrimeX Distribution Agreement(15)
~~10.35~~10.40		~~Promissory Note~~American Development Partners development agreement(15)
10.41		Mast Hill Securities Purchase and Related Agreements(14)
10.42		Blue Lake Partners Securities Purchase and Related Agreements(14)
10.43		Blue Lake Partners Securities Purchase and Related Agreements(16)
10.44		Extension and Amendment to ~~TWS~~Arena Transactional Documents(16)
14.1		Code of Ethics(1)
21.1		List of ~~Subsidiaries~~Subsidiaries(10)
31.1		Chief Executive Officer certification under Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Chief Financial Officer certification under Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Chief Executive Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Chief Financial Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema
101.CAL		Inline XBRL Taxonomy Extension Calculation
101.DEF		Inline XBRL Taxonomy Extension Definition
101.LAB		Inline XBRL Taxonomy Extension Labels
101.PRE		Inline XBRL Taxonomy Extension Presentation
104		Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit)

(1)	Filed with the Annual Report on Form 10-K filed with the SEC on April 2, 2020 and incorporated herein by reference.
(2)	Filed with the Form S-1 Registration Statement filed with the SEC on December 2, 2015 and incorporated herein by reference.
(3)	Filed with the Current Report on Form 8-K filed with the SEC on January 30, 2019 and incorporated herein by reference.
(4)	Filed with the Current Report on Form 8-K filed with the SEC on December 6, 2019 and incorporated herein by reference.
(5)	Filed with the Current Report on Form 8-K filed with the SEC on February 18, 2020 and incorporated herein by reference.
(6)	Filed with the Current Report on Form 8-K filed with the SEC on January 15, 2019 and incorporated herein by reference.
(7)	Filed with the Form 1-A/A, Part II, filed with the SEC on July 17, 2020 and incorporated herein by reference.
(8)	Filed with the Form 1-A POS, Part II, filed with the SEC on September 11, 2020 and incorporated herein by reference.
(9)	Filed with the Current Report on Form 8-K filed with the SEC on November 23, 2020 and incorporated herein by reference.
(10)	Filed with the Annual Report on Form 10-K filed with the SEC on April ~~14, 2021~~15, 2022 and incorporated herein by reference.
(11)	Filed with the Quarterly Report on Form 10-Q filed with the SEC on May 21, 2021 and incorporated herein by reference.
(12)	Filed with the Current Report on Form 8-K filed with the SEC on August 17, 2021 and incorporated herein by reference.
(13)	Filed with the Current Report on Form 8-K filed with the SEC on September 1, 2021 and incorporated herein by reference.
(14)	Filed with the Current Report on Form 8-K filed with the SEC on March 31, 2022 and incorporated herein by reference.
(15)	Filed with the Form 10-K filed with the SEC on April 15, 2022 and incorporated herein by reference.
(16)	Filed with the Current Report on Form 8-K filed with the SEC on April 29, 2022 and incorporated herein by reference.

SIGNATURES

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

	Can B Corp.

Date: ~~August 16, 2021~~May 17, 2022	By:	/s/ Marco Alfonsi
		Marco Alfonsi,
		Chief Executive Officer

Date: ~~August 16, 2021~~May 17, 2022	By:	/s/ Stanley L. Teeple
		Stanley L. Teeple,
		Chief Financial Officer

1921

Six Months Ended June 30, 2021 and 2020

	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
Six months ended June 30, 2021

Balance, January 1, 2021		20	$	5,539,174		-	$	-		-	$	-		-	$	-		5,544,590	$	26,111,978		543,715	$	(572,678	)	$	2,563,399	$	(30,386,024	)	$	3,255,849

Issuance of preferred stock		-		-		-		-		50		-		1,950		2		-		-		-		-			-		-			2

Conversion of Series C Preferred stock to Common stock		-		-		-		-		-		-		-		-		3,750,000		-		-		-			-		-			-

Sale of common stock		-		-		-		-		-		-		-		-		5,732,000		2,866,000		-		-			-		-			2,866,000

Issuance of common stock in lieu of note repayments		-		-		-		-		-		-		-		-		1,155,250		537,748		-		-			-		-			537,748

Issuance of common stock for services rendered		-		-		-		-		-		-		-		-		406,114		417,048		-		-			-		-			417,048

Issuance of common stock for asset acquisition		-		-		-		-		-		-		-		-		355,057		137,673		-		-			-		-			137,673

Issuance of common stock warrants and commitment shares in connection with convertible promissory note		-		-		-		-		-		-		-		-		-		-		-		-			662,062		-			662,062

Net loss		-		-		-		-		-		-		-		-		-		-		-		-			-		(4,919,871	)		(4,919,871	)

Balance, June 30, 2021		20	$	5,539,174		0	$	-		50	$	-		1,950	$	2		16,943,011	$	30,070,447		543,715	$	(572,678	)	$	3,225,461	$	(35,305,895	)	$	2,956,511

Six months ended June 30, 2020

Balance, January 1, 2020		20	$	5,539,174		-	$	-		-	$	-		-	$	-		2,680,937	$	23,113,077		-	$	-		$	1,075,176	$	(23,361,223	)	$	6,366,204

Issuance of common stock for services rendered		-		-		-		-		-		-		-		-		190,888		315,615		-		-			-		-			315,615

Issuance of common stock - reverse stock split rounding		-		-		-		-		-		-		-		-		2,460		-		-		-			-		-			-

Issuance of common stock pursuant to FirstFire note agreement		-		-		-		-		-		-		-		-		119,508		295,780		-		-			-		-			295,780
														��
Issuance of common stock pursuant to note agreements		-		-		-		-		-		-		-		-		162,545		88,927		-		-			-		-			88,927

Issuance of common stock for acquisition of intangible assets		-		-		-		-		-		-		-		-		235,000		201,187		-		-			-		-			201,187

Issuance of common stock for compensation		-		-		-		-		-		-		-		-		30,000		41,625		-		-			-		-			41,625

Net loss		-		-		-		-		-		-		-		-		-		-		-		-			-		(2,365,032	)		(2,365,032	)

Balance, June 30, 2020		20	$	5,539,174		-	$	-		-	$	-		-	$	-		3,421,338	$	24,056,211		-	$	-		$	1,075,176	$	(25,726,255	)	$	4,944,306

		2021
Six months ended December 31, 2021	$	48,556
Fiscal year 2022		97,112
Fiscal year 2023		97,112
Fiscal year 2024		97,112
Fiscal year 2025		86,970
Thereafter		307,870
Intangible assets, net	$	734,732

		2021
Six months ended December 31, 2021	$	23,527
Fiscal year 2022		14,259
Total	$	37,786