Can B Corp.

11/19/2024 | Press release | Distributed by Public on 11/19/2024 15:37

Quarterly Report for Quarter Ending September 30, 2024 (Form 10-Q)

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 September 30, 2024

☐ 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

Can B Corp.

(Exact name of registrant as specified in its charter)

Florida 20-3624118

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

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)

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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 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

As of November 19, 2024, there were 75,841,988shares of common stock of Nascent Pharma Holdings, Inc (the successor issuer pursuant to Rule 12g-3(a) under the Exchange Act as of October 25, 2024) outstanding.

Can B Corp.

FORM 10-Q

September 30, 2024

TABLE OF CONTENTS

Page
No.
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets (unaudited) - September 30, 2024 and December 31, 2023 3
Condensed Consolidated Statements of Operations (unaudited) - Three and Nine Months Ended September 30, 2024 and 2023 4
Condensed Consolidated Statement of Stockholders' Equity (Deficit) (unaudited) Three and Nine Months Ended September 30, 2024 and 2023 5
Condensed Consolidated Statements of Cash Flows (unaudited) - Nine Months Ended September 30, 2024 and 2023 7
Condensed Notes to Unaudited Consolidated Financial Statements. 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 22
Item 3 Quantitative and Qualitative Disclosures About Market Risk. 23
Item 4 Controls and Procedures. 23
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 23
Item A. Risk Factors 24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 24
Item 3. Defaults Upon Senior Securities 24
Item 4. Mine Safety Disclosures 24
Item 5. Other Information 25
Item 6. Exhibits 25
2

PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

Can B̅ Corp. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

September 30, December 31,
2024 2023
Assets
Current assets:
Cash and cash equivalents $ 7,879 $ 34,006
Accounts receivable, less allowance for doubtful accounts of $4,774,088and $2,818,395, respectively 1,419,978 3,723,344
Inventory 155,917 1,619,542
Prepaid expenses and other current assets 10,065 4,137
Total current assets 1,593,839 5,381,029
Other assets:
Deposits 245,755 235,418
Intangible assets, net - 95,144
Property and equipment, net - 4,106,283
Right of use assets, net - 295,151
Other noncurrent assets 16,555 13,139
Total other assets 262,310 4,745,135
Total assets $ 1,856,149 $ 10,126,164
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Accounts payable $ 2,630,697 $ 1,997,643
Due to related party 457,850 357,243
Notes and loans payable, net 8,555,243 9,372,714
Warrant liabilities - 1,766
Operating lease liability - current - 254,391
Total current liabilities 11,643,790 11,983,757
Total liabilities 11,643,790 11,983,757
Commitments and contingencies (Note 12)
Stockholders' equity (deficit):
Preferred stock, authorized 5,000,000shares:
Series A Preferred stock, nopar value: 20shares authorized, 5shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively 5,320,000 5,320,000
Series C Preferred stock, $0.001par value: 2,000shares authorized, 1,100shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively 2,900,039 2,900,039
Series D Preferred stock, $0.001par value: 4,000shares authorized, 4,000shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively 4 4
Common stock, nopar value; 1,500,000,000shares authorized, 70,122,981and 32,753,196issued and outstanding at September 30, 2024 and December 31, 2023, respectively 84,818,600 82,459,880
Common stock issuable, nopar value; 36,248shares at September 30, 2024 and December 31, 2023, respectively 119,586 119,586
Treasury stock (572,678 ) (572,678 )
Additional paid-in capital 11,559,910 10,396,274
Accumulated deficit (113,933,102 ) (102,480,698 )
Total stockholders' equity (deficit) (9,787,641 ) (1,857,593 )
Total liabilities and stockholders' equity (deficit) $ 1,856,149 $ 10,126,164

See notes to condensed consolidated financial statements

3

Can B̅ Corp. and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
2024 2023 2024 2023
Revenues
Product sales $ - $ 196,082 $ - $ 1,259,972
Service revenue 15,269 222,875 656,652 518,883
Total revenues 15,269 418,957 656,652 1,778,855
Cost of revenues 415,816 1,235,647 2,274,448 2,694,649
Gross profit (400,547 ) (816,690 ) (1,617,796 ) (915,794 )
Selling, general and administrative 2,432,413 2,761,523 5,294,307 5,918,933
Loss on sale of assets - - 3,142,769 -
Total operating expenses 2,432,413 2,761,523 8,437,076 5,918,933
Loss from operations (2,832,960 ) (3,578,213 ) (10,054,872 ) (6,834,727 )
Other income (expense):
Change in fair value of warrant liability - - 1,766 180,468
Interest expense (430,173 ) (585,417 ) (1,399,721 ) (1,335,799 )
Other income (expense) 521 (1,747 ) 423 68,227
Other income (expense) (429,652 ) (587,164 ) (1,397,532 ) (1,087,104 )
Loss before provision for income taxes (3,262,612 ) (4,165,377 ) (11,452,404 ) (7,921,831 )
Provision for income taxes - - - 9,596
Net loss $ (3,262,612 ) $ (4,165,377 ) $ (11,452,404 ) $ (7,931,427 )
Loss per share - basic and diluted $ (0.05 ) $ (0.36 ) $ (0.22 ) $ (1.08 )
Weighted average shares outstanding - basic and diluted 65,435,733 11,589,937 52,526,379 7,358,006

See notes to condensed consolidated financial statements

4

Can B̅ Corp. and Subsidiaries

Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited)

Three Months Ended September 30, 2024 and 2023

Series A Series B Series C Series D Common Treasury Additional
Preferred Stock Preferred Stock Preferred Stock Preferred Stock Common Stock Stock Stock Paid-in Accumulated
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Issuable Shares Amount Capital Deficit Total
Balance, June 30, 2024 5 $ 5,320,000 - $ - 1,100 $ 2,900,039 4,000 $ 4 61,872,981 $ 84,591,075 $ 119,586 36,248 $ (572,678 ) $ 11,559,910 $ (110,670,490 ) $ (6,752,554 )
Issuance of common stock for payables - - - - - - - - 6,500,000 97,500 - - - - - 97,500
Issuance of common stock in lieu of note repayments - - - - - - - - 1,750,000 130,025 - - - - - 130,025
Net loss - - - - - - - - - - - - - (3,262,612 ) (3,262,612 )
Balance, September 30, 2024 5 $ 5,320,000 - $ - 1,100 $ 2,900,039 4,000 $ 4 70,122,981 $ 84,818,600 $ 119,586 36,248 $ (572,678 ) $ 11,559,910 $ (113,933,102 ) $ (9,787,641 )
Balance, June 30, 2023 5 $ 5,320,000 - $ - 1,100 $ 2,900,039 4,000 $ 4 5,700,792 $ 80,300,211 $ 119,586 36,248 $ (572,678 ) $ 8,944,609 $ (96,456,884 ) $ 554,887
Issuance of common stock for payables - - - - - - - - 2,004,510 321,887 - - - - - 321,887
Issuance of common stock for inventory - - - - - - - - 675,000 175,500 - - - - - 175,500
Issuance of common stock for legal settlement - - - - - - - - 45,835 7,792 - - - - - 7,792
Issuance of common stock in lieu of note repayments - - - - - - - - 8,795,461 1,029,942 - - - - - 1,029,942
Issuance of common stock for wages and salaries - - - - - - - - 6,940,118 589,216 - - - - - 589,216
Issuance of common stock in lieu of interest payments - - - - - - - - 2,085,134 254,090 - - - - - 254,090
Stock-based compensation - - - - - - - - - - - - - 1,451,665 - 1,451,665
Net loss - - - - - - - - - - - - - (4,165,377 ) (4,165,377 )
Balance, September 30, 2023 5 $ 5,320,000 - $ - 1,100 $ 2,900,039 4,000 $ 4 26,246,850 $ 82,678,638 $ 119,586 36,248 $ (572,678 ) $ 10,396,274 $ (100,622,261 ) $ 219,602
5

Nine Months Ended September 30, 2024 and 2023

Series A Series B Series C Series D Common Treasury Additional
Preferred Stock Preferred Stock Preferred Stock Preferred Stock Common Stock Stock Stock Paid-in Accumulated
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Issuable Shares Amount Capital Deficit Total
Balance, December 31, 2023 5 $ 5,320,000 - $ - 1,100 $ 2,900,039 4,000 $ 4 32,753,196 $ 82,459,880 $ 119,586 36,248 $ (572,678 ) $ 10,396,274 $ (102,480,698 ) $ (1,857,593 )
Issuance of common stock for payables - - - - - - - - 12,249,398 584,928 - - - - - 584,928
Issuance of common stock for note repayments - - - - - - - - 13,616,995 1,094,789 - - - - - 1,094,789
Issuance of common stock for contract settlement - - - - - - - - 4,825,000 579,000 - - - - - 579,000
Issuance of common stock with note extension - - - - - - - - 3,000,000 3,000 - - - - - 3,000
Issuance of common stock in lieu of interest payments - - - - - - - - 3,678,392 97,003 - - - - - 97,003
Stock based compensation - - - - - - - - - - - - - 1,163,636 - 1,163,636
Net loss - - - - - - - - - - - - - - (11,452,404 ) (11,452,404 )
Balance, September 30, 2024 5 $ 5,320,000 - $ - 1,100 $ 2,900,039 4,000 $ 4 70,122,981 $ 84,818,600 $ 119,586 36,248 $ (572,678 ) $ 11,559,910 $ (113,933,102 ) $ (9,787,641 )
Balance, December 31, 2022 5 $ 5,320,000 - $ - 1,100 $ 2,900,039 4,000 $ 4 4,422,584 $ 79,614,986 $ 119,586 36,248 $ (572,678 ) $ 8,006,822 $ (92,690,834 ) $ 2,697,925
Issuance of common stock for services rendered - - - - - - - - 2,732,360 917,694 - - - - - 917,694
Issuance of common stock for purchase of equipment - - - - - - - - 125,000 46,875 - - - - - 46,875
Warrants issued in connection with the issuance of convertible note - - - - - - - - - - - - - 937,787 - 937,787
Issuance of common stock for wages and salaries - - - - - - - - 6,940,118 589,216 - - - - - 589,216
Issuance of common stock for inventory - - - - - - - - 675,000 175,500 - - - - - 175,500
Issuance of common stock for legal settlement - - - - - - - - 45,835 7,792 - - - - - 7,792
Issuance of common stock in lieu of interest payments - - - - - - - - 2,510,492 296,633 - - - - - 296,633
Issuance of common stock in lieu of note repayments - - - - - - - - 8,795,461 1,029,942 - - - - - 1,029,942
Stock-based compensation - - - - - - - - - - - - - 1,451,665 - 1,451,665
Net loss - - - - - - - - - - - - - - (7,931,427 ) (7,931,427 )
Balance, September 30, 2023 5 $ 5,320,000 - $ - 1,100 $ 2,900,039 4,000 $ 4 26,246,850 $ 82,678,638 $ 119,586 36,248 $ (572,678 ) $ 10,396,274 $ (100,622,261 ) $ 219,602

See notes to condensed consolidated financial statements

6

Can B̅ Corp. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

Nine Months Ended
September 30,
2024 2023
Operating activities:
Net loss $ (11,452,404 ) $ (7,931,427 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Stock-based compensation 1,163,636 1,451,665
Stock-based wages and salaries - 589,216
Depreciation 343,607 1,040,915
Amortization of intangible assets - 9,000
Amortization of original-issue-discounts 488,740 522,274
Contract settlement 579,000 -
Impairment of assets 715,051 -
Loss on sale of property and equipment 3,142,769 -
Bad debt expense 1,997,560 38,631
Cancellation of debt - (110,000 )
Change in fair value of warrant liability (1,766 ) (180,468 )
Stock-based interest expense 97,003 296,633
Stock-based consulting expense - 917,694
Changes in operating assets and liabilities:
Accounts receivable 305,806 (64,960 )
Inventory 1,463,625 1,239,847
Prepaid expenses (5,928 ) (8,115 )
Operating lease right-of-use asset 40,760 140
Other non-current assets (3,416 ) -
Accounts payable 1,220,983 733,022
Accrued expenses - -
Net cash provided by (used in) operating activities 95,026 (1,455,933 )
Investing activities:
Purchase of property and equipment - (15,000 )
Deposits paid (10,337 ) (70,000 )
Net cash used in investing activities (10,337 ) (85,000 )
Financing activities:
Net proceeds received from notes and loans payable 150,000 2,255,000
Repayments of notes and loans payable (361,423 ) (630,943 )
Deferred financing costs - (178,000 )
Amounts received from/repaid to related parties, net 100,607 53,000
Net cash (used in) provided by financing activities (110,816 ) 1,499,057
Decrease in cash and cash equivalents (26,127 ) (41,876 )
Cash and cash equivalents, beginning of period 34,006 73,194
Cash and cash equivalents, end of period $ 7,879 $ 31,318
Supplemental Cash Flow Information:
Income taxes paid $ - $ -
Interest paid $ - $ -
Non-cash Investing and Financing Activities:
Issuance of common stock in lieu of repayment of notes payable $ 1,094,764 $ 1,029,942
Issuance of common stock for contract settlement $ 579,000 $ -
Issuance of note payable in connection with note extension $ 250,000 $ -
Issuance of common stock for property and equipment $ - $ 46,875
Issuance of common stock for payables $ 584,928
Debt discount associated with convertible note $ - $ 273,529
Issuance of common stock warrants in connection with convertible promissory note $ - $ 937,787

See notes to consolidated financial statements

7

Can B̅ Corp. and Subsidiaries

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2024

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 its 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 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") are available online. Additional hemp derived isolate is available for wholesale to third-parties looking to incorporate such compounds into their products through the Company's wholly owned subsidiary CO Botanicals LLC (incorporated in August 2021). In February of 2024, Can B̅ Corp's 67% owned subsidiary, Nascent Pharma, LLC, acquired certain Patents using liquid formulations containing cannabinoids which are used in such products as vape cartridges, edibles, pills, gummies, tinctures, oils, concentrates and more.

Prior to September 2024 , the Company was 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 included oils, creams, moisturizers, isolate, gel caps, spa products, and concentrates. Can B̅ developed its own line of proprietary products and sought synergistic value through acquisitions in the hemp industry. In June 2024, Can B̅ shifted its business focus to commercializing and enforcing the patents recently acquired by Nascent Pharma, LLC ("Nascent"), continuing to collect Duramed receivables and reestablishing the Company's production of the Longevity Brand Superfood drink mix for Brooke Burke Body, Inc.

On October 25, 2015, Can B̅ implemented a legal reorganization which resulted in Nascent Pharma Holdings, Inc. ("NPH") owning all of the outstanding stock of Can B̅. Consequently, Can B̅ became a direct, wholly owned subsidiary of NPH. Each share of each class of Can B̅ stock issued and outstanding immediately prior to the legal reorganization automatically converted into an equivalent corresponding share of NPH stock, having the same designations, rights, powers and preferences and the qualifications, limitations and restrictions as the corresponding share of Can B̅ stock being converted. Asa result, Can B̅'s stockholders immediately prior to the consummation of the legal reorganization became stockholders of NPH.

Note 2 - Going Concern

The condensed consolidated financial statements have been prepared on a "going concern" basis, which contemplates the realization of assets and liquidation of liabilities in a normal course of business. As of September 30, 2024, the Company had cash and cash equivalents of $7,879and negative working capital of $10,049,951. For the nine months ended September 30, 2024, the Company incurred losses of $11,452,404which made the total accumulated deficit $113,933,102through September 30, 2024. These factors raise substantial doubt as to the Company's ability to continue as a going concern.

The Company is currently funding its operations on a month-to-month basis through third party loans. In March 2024, certain equipment used in the operation of the Company's hemp division was sold in an auction conducted under Article 9 of the Uniform Commercial Code. The auction resulted in proceeds of approximately $300,000which were applied to the Company's obligations under convertible notes held by Arena Special Opportunities Partners I, L.P. and its affiliates. In June 2024, the Company's Board of Directors concluded that as a result of the impact of the auction on the hemp division, it is no longer feasible to continue the Company's hemp operations. As a result, the Company will no longer pursue the development, manufacture or sale of hemp derived products.

Historically, revenues from the Company's hemp division supported, in part, its durable medical equipment business conducted through Duramed. Due to the elimination of support from the hemp division, Duramed is operating with reduced staff which has adversely impacted revenues.

The Company's ability to continue its operations is dependent on the execution of management's plans, which include protecting and commercializing the cannabis patents recently acquired by Nascent, raising litigation funding to support Nascent's patent protection efforts, continuing to collect Duramed receivables, reestablishing the Company's production of the Longevity Brand Superfood drink mix for Brooke Burke Body, Inc., restructuring outstanding indebtedness and raising of capital through the debt and/or equity markets. The condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. If the Company is not to continue as a going concern, it would likely not be able to realize its assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in its financial statements.

There can be no assurances that the Company will be successful in generating additional cash from equity or debt financings or other sources to be used for operations. Should the Company not be successful in obtaining the necessary financing to fund its operations, it would need to curtail certain or all operational activities and/or contemplate the sale of its assets, if necessary.

8

Can B̅ Corp. and Subsidiaries

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2024

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

Basis of Financial Statement Presentation

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

The consolidated balance sheet information as of December 31, 2023 was derived from the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 ("2023 Form 10-K"). The interim condensed consolidated financial statements contained herein should be read in conjunction with the 2023 Form 10-K.

Principles of Consolidation

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

Use of Estimates

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses in those financial statements. Certain significant accounting policies that contain subjective management estimates and assumptions include those related to revenue recognition, inventory, intangible assets and other long-lived assets, income taxes and deferred taxes. Descriptions of these policies are discussed in the Company's 2023 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 2023 Form 10-K.

9

Can B̅ Corp. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

Segment reporting

As of September 30, 2024, 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.

Correction of Immaterial Errors

Subsequent to June 30, 2024, the Company identified an error related to the total principal outstanding on its notes payable. The error identified resulted in an increase of $803,225of notes payable as of December 31, 2023 and corresponding decrease to stockholder's equity/(deficit). The error was a result of improper accounting for certain conversions of principal to common stock. Amounts were corrected via reconciliation to supporting documentation from each lender. Going forward, the Company is implementing a more stringent debt reconciliation process and a lender by lender basis.

In accordance with the SEC Staff Accounting Bulletin (SAB) No. 99, "Materiality," and SAB No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements," the Company evaluated the materiality of the error from qualitative and quantitative perspectives and concluded that the error was immaterial to the September 30, 2024 and December 31, 2023, financial statements. Consequently, only the December 31, 2023, consolidated balance sheet and the December 31, 2023, balance in the statement of stockholders' equity contained in these financial statements have been restated.

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. December 2023 revenues and accounts payable were misstated and a correction of $52,400was made related to a transaction reversal with a vendor.

Note 4 - Fair Value Measurements

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

September 30, 2024
Level 1 Level 2 Level 3 Total
Liabilities
Warrant liabilities $ - $ - $ - $ -
As of December 31, 2023
Level 1 Level 2 Level 3 Total
Liabilities
Warrant liabilities $ - $ - $ 1,766 $ 1,766

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:

As of

September 30,

2024

December 31,

2023

Stock price $ 0.013 $ 0.07
Exercise price $ 6.40 $ 6.40
Remaining term (in years) 2.75 3.50
Volatility 188.4 % 171.8 %
Risk-free rate 3.58 % 3.84 %
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:

Warrant liabilities
Estimated fair value at December 31, 2022 $ 203,043
Issuance of warrant liabilities -
Change in fair value (180,468 )
Estimated fair value at September 30, 2023 $ 123,625
Estimated fair value at December 31, 2023 $ 1,766
Change in fair value (1,766 )
Estimated fair value at September 30, 2024 $ -
10

Can B̅ Corp. and Subsidiaries

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2024

Note 5 - Inventories

Inventories consist of:

September 30, December 31,
2024 2023
Raw materials $ 26,827 $ 1,196,112
Finished goods 129,090 423,430
Total $ 155,917 $ 1,619,542

Note 6 - Property and Equipment

Property and equipment consist of:

September 30, December 31,
2024 2023
Furniture and fixtures $ - $ 21,724
Office equipment - 12,378
Manufacturing equipment - 6,828,083
Medical equipment - 776,396
Leasehold improvements - 26,902
Total - 7,665,483
Accumulated depreciation - (3,559,200 )
Net $ - $ 4,106,283

Depreciation expense related to property and equipment was $0and $348,224for the three months ended September 30, 2024 and 2023, respectively

Depreciation expense related to property and equipment was $343,607and $1,040,915for the nine months ended September 30, 2024 and 2023, respectively

In connection with the sale of certain assets related to the Arena Notes, the Company recorded a loss on sale of property and equipment of $3,142,769during the nine months ended September 30, 2024.

Note 7 - Intangible Assets

Intangible assets consist of:

September 30, December 31,
2024 2023
Technology, IP and patents $ - $ 119,998
Total - 119,998
Accumulated amortization - (24,854 )
$ - $ 95,144

Amortization expense was $0and $3,000for the three months ended September 30, 2024 and 2023, respectively.

Amortization expense was $9,000for the nine months ended September 30, 2023. During the nine months ended September 30, 2024, the Company recorded impairment expense of $95,144related to its intangible assets which is included in selling, general and administrative in the condensed consolidated statements of operations.

11

Can B̅ Corp. and Subsidiaries

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2024

Note 8 - Notes and Loans Payable

Convertible Promissory Notes

In December 2020, the Company entered into a convertible promissory note ("ASOP Note I") with Arena Special Opportunities Partners I, LP ("ASOP"). The original principal amount of the note was $2,675,239and the proceeds were utilized for working capital purposes. The note matured on January 31, 2022and all principal, accrued and unpaid interest was 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 228,419common stock warrants. The common stock purchase warrants entitle the holder to purchase an aggregate of up to 228,419shares of the Company's common stock at an exercise price of $6.75per 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. The principal balance outstanding at September 30, 2024 was $2,348,018.

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 $102,539and was utilized for working capital purposes. The note matured on January 31, 2022and all principal, accrued and unpaid interest was 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 8,755common stock warrants. The common stock purchase warrants entitle the holder to purchase an aggregate of up to 8,755shares of the Company's common stock at an exercise price of $6.75per 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. The principal balance outstanding at September 30, 2024 was $89,997.

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 $1,193,135and it is to be utilized for working capital purposes. The note matures on January 31, 2022and all principal, accrued and unpaid interest is due at maturity at a rate of 12% per annum. The conversion 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 101,978common stock warrants. The common stock purchase warrants entitle the holder to purchase an aggregate of up to 101,978shares of the Company's common stock at an exercise price of $6.75per 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. The principal balance outstanding at September 30, 2024 was $1,223,360.

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 $306,865and it is to be utilized for working capital purposes. The note matures on January 31, 2022and all principal, accrued and unpaid interest is due at maturity at a rate of 12% per annum. The conversion 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 26,228common stock warrants. The common stock purchase warrants entitle the holder to purchase an aggregate of up to 26,228shares of the Company's common stock at an exercise price of $6.75per 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 September 30, 2024 was $314,639.

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 subsequently elected to extend the maturity date to May 31, 2022 for the promise to pay an additional $100,000. As discussed below under "Forbearance and Amendment of Outstanding Notes," ASOP and ASOF have agreed to forbear from exercising remedies under the notes until December 31, 2023 provided that the Company does not default on its obligations under the Forbearance Agreement. In September 2023, Arena notified the Company that it was in default of certain obligations under the Forbearance Agreement but did not declare an acceleration of the indebtedness. In April 2024, Arena instituted a lawsuit seeking, among other things, a declaratory judgment that the Company is in breach of the Arena notes and Forbearance Agreement. On March 14, 2024, an auction of the assets of the Company's hemp division was conducted under Article 9 of the Uniform Commercial Code following allegations by Arena that the Company was in breach of its obligations under certain notes and a forbearance agreement. See "Part II Item 1. Legal Proceedings."

12

Can B̅ Corp. and Subsidiaries

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2024

On January 1, 2022, the Company entered into a convertible promissory note ("Empire Note") with Empire Properties, LLC ("Empire"). The principal balance of the note is $52,319and it is to be utilized for working capital purposes. The note matured on December 31, 2022or due on demand subsequently to any major funding received by the Company in excess of $5,000,000and all principal, accrued and unpaid interest is due at maturity at a rate of 8% 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 June 30, 2024 was $52,319.

In March 2022, the Company entered into a convertible promissory note ("BL Note") with Blue Lake Partners, LLC ("BL"). The original principal amount of the note was $250,000and the proceeds are to be utilized for working capital purposes. The note had an original maturity date of March 22, 2023and 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 39,062common stock warrants. The common stock purchase warrants entitle the holder to purchase an aggregate of up to 39,062shares of the Company's common stock at an initial exercise price of $6.40per share (subject to adjustment upon the occurrence of certain events, including the issuance of lower priced securities). 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. Effective February 27, 2023, in consideration of the Company repaying an aggregate of $66,667under the BL Note, BL agreed to extend the maturity date of the BL Note until September 1, 2023 and reduce the percentage of the cash proceeds received by the Company from the issuance of equity or debt that BL can require the Company to apply to the repayment of the BL Note from 50% to 33%. The principal balance outstanding at September 30, 2024 was $58,011and the BL Note is past due.

In April 2022, the Company entered into a convertible promissory note ("FM Note") with Fourth Man, LLC ("FM"). The original principal amount of the note was $150,000and the proceeds are to be utilized for working capital purposes. The note had an original maturity date of April 22, 2023and 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 derivatives and therefore have been recorded in liabilities as part of the convertible promissory note and not bifurcated. In addition, the FM Note was issued with 23,437common stock warrants. The common stock purchase warrants entitle the holder to purchase an aggregate of up to 23,437shares of the Company's common stock at an initial exercise price of $6.40per share (subject to adjustment upon the occurrence of certain events, including the issuance of lower priced securities). The common stock purchase warrants issued to FM 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 FM Note with subsequent changes in fair values recognized in the consolidated statement of operations at each reporting date. Effective February 27, 2023, in consideration of the Company repaying an aggregate of $40,000under the FM Note, FM agreed to extend the maturity date of the FM Note until September 1, 2023 and reduce the percentage of the cash proceeds received by the Company from the issuance of equity or debt that FM can require the Company to apply to the repayment of the FM Note from 50% to 33%. On June 30th, 2023 the Company entered into a Settlement and Mutual Release Agreement to extinguish the $110,000principal outstanding on the FM Note. As of September

30, 2024 the FM Note had been satisfied in full.

13

Can B̅ Corp. and Subsidiaries

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2024

In June 2022, the Company entered into a convertible promissory note ("Alumni Note") with Alumni Capital, LP ("Alumni"). The original principal amount of the note was $62,500and the proceeds are to be utilized for working capital purposes. The note had an original maturity date of June 6, 2023which was extended until September 1, 2023 effective February 27, 2023. All principal, accrued and unpaid interest is due at maturity at a rate of 12% per annum. The holder can require the full payment of the note if the Company completes an offering of its common stock that results in an uplisting of its common stock to a national securities exchange. 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 derivatives and therefore have been recorded in liabilities as part of the convertible promissory note and not bifurcated. In addition, the Alumni Note was issued with 9,766common stock warrants. The common stock purchase warrants entitle the holder to purchase an aggregate of up to 9,766shares of the Company's common stock at an exercise price of $6.40per share. The common stock purchase warrants issued to Alumni 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 Alumni Note with subsequent changes in fair values recognized in the consolidated statement of operations at each reporting date. The principal balance outstanding at September 30, 2024 was $52,319.

In August 2022, the Company entered into a convertible promissory note ("WN") with Walleye Opportunities Master Fund Ltd. ("WOMF"). The original principal amount of the note was $385,000and the proceeds are to be utilized for working capital purposes. The note originally matured on August 30, 2023and 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 derivatives and therefore have been recorded in liabilities as part of the convertible promissory note and not bifurcated. In addition, the WN Note was issued with 71,296common stock warrants. The common stock purchase warrants entitle the holder to purchase an aggregate of up to 71,296shares of the Company's common stock at an exercise price of $5.40per share. The common stock purchase warrants issued to WOMF 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 WN with subsequent changes in fair values recognized in the consolidated statement of operations at each reporting date. The principal balance outstanding at September 30, 2024 was $350,000

In January 2023 the Company entered into a convertible promissory note ("Tysadco Note VI") with Tysadco Partners, LLC ("Tysadco"). The original principal amount of the note was $100,000and the proceeds are to be utilized for working capital purposes. The note had a maturity date of April 12, 2023, and all principal, accrued and unpaid interest is due at maturity at a rate of 12% per annum. Effective January 31, 2023, Tysadco agreed to exchange the Tysadco Note VI and other notes held by Tysadco in the aggregate principal amount of $752,000having maturity dates between August 24, 2022 and March 19, 2023 for a single note that matured on September 1, 2023. Contemporaneous with this exchange, Tysadco assigned the combined note to ClearThink Capital Partners, LLC and the Company issued 130,000shares of common stock to ClearThink Capital Partners, LLC. The conversion options contained in the combined note were evaluated for derivative accounting under ASC 815, Derivatives and Hedging, and determined not to be considered derivatives and therefore have been recorded in liabilities as part of the convertible promissory note and not bifurcated. The principal balance of the combined note at September 30, 2024 was $1,007,500and the combined note is past due.

On March 2, 2023, the Company completed the sale of a promissory note (the "Note") in the principal amount of $1,823,529to WOMF pursuant to a Securities Purchase Agreement dated as of February 27, 2023. The purchase price of the Note was $1,550,000, representing a 15% original issue discount. The Note is non-interest bearing, except in the case of the event of a default, in which case interest will accrue from the date of the default at a rate equal to the lower of 18% per annum or the maximum rate permitted by law.

The Note is payable in nine (9) monthly installments of $232,500each, consisting of a $227,941principal reduction payment and a $4,559redemption fee, commencing on April 27, 2023. The Company's obligations under the note are secured by a security interest in the Company's deposit accounts and the deposit accounts of the Company's subsidiaries. In addition, each the Company's subsidiaries has agreed that if an event of default occurs under the Note, the subsidiary will pay to WOMF an amount equal to 10% of revenues received during the prior month from the sale of goods or services or collections of accounts receivable. In connection with this Note, the Company issued a warrant for 1,823,529shares. These warrants have no intrinsic value and their fair value is insignificant.

14

Can B̅ Corp. and Subsidiaries

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2024

The Note requires the Company to use reasonable commercial efforts to complete an offering which will result in an uplisting of its common stock to a national securities exchange within a reasonable time following the issuance of the Note. The Note contains certain negative covenants, including a prohibition on the incurrence of debt that is senior or pari passu to the indebtedness represented by the Note, the creation of liens on the Company's assets, the payment of dividends and other distributions on the Company's common stock, the repurchase of the Company's common stock, the sale of a significant portion of the Company's assets and the repayment of indebtedness other than existing indebtedness.

The Company may elect to pay all or a portion of a monthly installment due under the Note by converting such amount into shares of the Company's common stock at a price of $4.00per share, subject to adjustment in accordance with the terms of the Note. As of June 30, 2024, the adjusted conversion price was $.0772. If the Company does not pay an installment when due it is deemed an election by the Company to convert the installment payment into common stock at a price equal to the lower of $4.00per share or 90% of the lowest daily volume weighted average price of the common stock during the five trading days preceding the conversion date. WOMF has the right to determine the timing of any such conversion. WOMF may elect at any time to convert amounts payable under the Note into shares of the Company's common stock at a conversion price of $4.00per share, subject to adjustment in accordance with the terms of the Note. The Company has not paid any of the monthly installments due under the Note in cash. As a result, these installment payments were converted into common stock.

If the Company receives cash proceeds from any source, including payments from customers or from the issuance of equity or debt, WOMF can require the Company to apply 100% of such proceeds to the repayment of the Note.

If the Company completes a placement of securities, WOMF will have the right to accept such new securities in lieu of the Note and Warrant. For so long as the Note is outstanding, if the Company issues a security or amends the terms of a security issued before the issue date of the Note, and WOMF believes that terms of the new or amended security are more favorable to the holder than the terms provided to WOMF, WOMF may require that such terms become part of WOMF's transaction documents with the Company.

In the event of a default under the Note, the Company shall be required to pay WOMF an amount equal to the amount determined by multiplying the principal amount then outstanding plus default interest by 135%, plus costs of collection. WOMF may elect to accept payment of any such amount in cash and/or shares of the Company's common stock, valued for this purpose at the lower of the conversion price then in effect or a 60% discount to the lowest volume weighted average price of the common stock during the five trading days preceding the conversion date.

WOMF has been granted a right of first refusal to participate in future financing transactions conducted by the Company.

As additional consideration for the purchase of the Note, the Company issued WOMF a warrant (the "Warrant") to purchase 1,307,190shares of the Company's common stock at an exercise price equal to 90% of the lowest volume weighted average price of the common stock during the five trading days preceding the date of exercise. The Warrant contains a cashless exercise provision and is exercisable at any time during the period beginning on August 27, 2023 and ending on August 27, 2028. In addition, a warrant issued by the Company to WOMF in August 2022 was amended to change the exercise price of the warrant from $5.40per share to the lower of $5.40per share or the lowest volume weighted average price of the common stock during the five trading days preceding its exercise.

The Company has entered into a Registration Rights Agreement with WOMF pursuant to which the Company has agreed to file a registration statement with the Securities and Exchange Commission to register the shares of common stock issuable upon the conversion of the Note and the exercise of the Warrant for public resale. The Company filed the registration statement on May 12, 2023 and it was declared effective on May 22, 2023. WOMF has also been granted piggyback registration rights with respect to the shares of common stock issuable upon the conversion of the Note and the exercise of the Warrant. Each of the Note and Warrant grants full ratchet anti-dilution protection to WOMF in the event that the Company issues common stock or rights to purchase common stock at a price less than the conversion or exercise price then in effect.

In May 2023, the Company issued a promissory note to WOMF in the principal amount of $437,500. The purchase price of the note was $350,000, representing a 20% original issue discount. The note is non-interest bearing except in the event of a default, in which case interest will accrue at a rate of 40% per annum in the event of a payment default and 18% per annum in the event of other defaults. The note became due on October 15, 2023. The principal balance outstanding at September 30, 2024 was $256,893.

15

Can B̅ Corp. and Subsidiaries

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2024

Forbearance and Amendment of Outstanding Notes.

Contemporaneous with the sale of the Note and Warrant to WOMF, ASOP and ASOF (collectively, "Arena"), who hold promissory notes with an unpaid principal balance of approximately $3,877,000which became due on April 30, 2022 (the "Arena Notes"), entered into a Forbearance Agreement with the Company pursuant to which they agreed to forbear from exercising remedies under the Arena Notes until December 31, 2024 provided that the Company does not default on its obligations under the Forbearance Agreement. In September 2023, Arena notified the Company that it was in default of certain obligations under the Forbearance Agreement but did not declare an acceleration of the indebtedness.

The Forbearance Agreement requires the Company and/or Company's subsidiaries, Duramed, Inc. and Duramed MI, LLC (together the "Duramed Subsidiaries") to remit to Arena on a monthly basis certain accounts receivable collected by the Company and/or the Duramed Subsidiaries until the total amount collected is $5,700,000. After the amount collected is $5,700,000, additional collections of these receivables are shared equally between the Company and Arena. The Company and the Duramed Subsidiaries have assigned their rights to these receivables to Arena.

If Arena fully exercises warrants to purchase shares of the Company's common stock that were previously issued to it, and the aggregate market value of the shares acquired is less than $1,500,000, the Company must pay to Arena an amount equal to such difference.

In December 2023 Arena notified the Company that it intended to conduct an auction of certain of the Company's assets under Article 9 of the Uniform Commercial Code due to the alleged breaches of the Forbearance Agreement. The auction took place on March 14, 2024.

As a condition to the closing of the sale of the Note and Warrant to the WOMF, certain terms of certain promissory notes previously issued by the Company were amended, including the following:

● in consideration of an increase in the aggregate principal amount by $10,000and an increase in the interest rate to 18% per annum, the holder of notes in the aggregate principal amount of $150,000agreed to waive his right to require the Company to repay a $50,000note upon the Company's receipt of $1,500,000of financing and extend maturity dates from November 18, 2021 and January 22, 2023 to September 1, 2023;
● in consideration of the Company's agreement to provide a product credit for future orders of $50,000, the holder of a promissory note in the principal amount of $150,000agreed to extend the maturity date from August 10, 2022 to September 1, 2023;
● the maturity date of a promissory note in the principal amount of $1,250,000was extended from August 12, 2022 until the earlier of September 1, 2023 or the date that the Company completes an offering resulting in an uplisting of its common stock to the Nasdaq Capital Market; and
● in consideration of the repayment of a total of $232,500under the notes, the holders of promissory notes in the aggregate principal amount of $435,000issued in October and November 2022 that bore interest at 18% per annum and were past due agreed to exchange the notes for new notes that matured on September 1, 2023 and bear interest at 15% per annum;
16

Can B̅ Corp. and Subsidiaries

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2024

TWS Note

On August 12, 2021, pursuant to an Equipment Acquisition Agreement, the Company entered into a twelve-month promissory note of $1,250,000with payments of $100,000per month and interest at 6% (See Note 5). As of September 30, 2024, the total amount outstanding was $1,633,889.

WOMF October 2023 Note

On October 27, 2023, the Company completed the sale of a promissory note (the "Initial Note") in the principal amount of $156,250to WOMF pursuant to a Securities Purchase Agreement between the Company and the WOMF (the "Stock Purchase Agreement"). The purchase price of the Note was $125,000, representing a 20% original issue discount. The Initial Note is non-interest bearing, except in the case of the event of a default, in which case interest will accrue from the date of the default at a rate equal to the lower of 18% per annum or the maximum rate permitted by law. The Initial Note becomes due on October 27, 2024. As of September 30, 2024, the total amounts outstanding were $156,250.

WOMF may elect to convert the principal amount of the Initial Note and default interest, if any, subject to adjustment at a price equal to 90% of the lowest daily volume weighted average price of the common stock during the fifteen trading days preceding the conversion date.

WOMF and/or investors introduced by WOMF may purchase up to an additional $1,693,750aggregate principal amount of notes having terms substantially similar to the Initial Note (the "New Notes" and collectively with the Initial Note, the "Notes"). In addition to the principal and interest payment obligations under the Notes, the Company has agreed to pay and/or cause its newly formed 70% owned subsidiary, Nascent, to pay WOMF fifteen percent (15%) of all amounts that would otherwise be distributable to the Company by Nascent until WOMF receives distributions in the aggregate amount that equal the sum of (a) 200% of the purchase price of notes previously issued by the Company to WOMF plus (b) 200% of the principal amount of certain notes previously issued by the Company and acquired by WOMF from a third party plus (c) 100% of the purchase price of Notes purchased pursuant to the Stock Purchase Agreement; provided, however, if WOMF and/or other investors purchase $1,875,000aggregate principal amount of Notes pursuant to the Stock Purchase Agreement, the obligation to pay 100% of the purchase price of the Notes shall be increased to 200% of the purchase price of such Notes. The amounts distributable by Nascent to the Company, if any, will represent the proceeds of Nascent's enforcement of certain patents it is seeking to acquire. Nascent has not yet acquired such patents and no assurance can be given that it will be able to complete such acquisition. Under the terms of the Stock Purchase Agreement, the purchase of New Notes by WOMF and/or investors introduced by WOMF is subject to, among other things, Nascent's acquisition of the patents. If Nascent does not complete the acquisition of the patents, the Company does not expect that any New Notes will be purchased and the Company will have no obligation to pay additional consideration to WOMF.

In the event of a default under a Note, the Company shall be required to pay the holder of the Note an amount equal to the amount determined by multiplying the principal amount of the Note then outstanding plus default interest by 135%, plus costs of collection. WOMF may elect to accept payment of any such amount in cash and/or shares of the Company's common stock, valued for this purpose at the lower of the conversion price then in effect or a 60% discount to the lowest volume weighted average price of the common stock during the five trading days preceding the conversion date.

WOMF has been granted a right of first refusal to participate in future financing transactions conducted by the Company.

The Company has entered into a Registration Rights Agreement with WOMF pursuant to which the Company has agreed to file a registration statement with the Securities and Exchange Commission by December 11, 2023 to register for public resale the shares of common stock issuable upon the conversion of the Note and a consolidated note issued to WOMF in the principal amount of $1,354,210(the "Consolidated Note") which combined certain notes held by WOMF into a single Note. If the Company fails to file the registration statement by December 11, 2023 or have the registration statement declared effective by the deadlines set forth in the Registration Rights Agreement, the Company will be required to make a payment of 2% of the amount then owed under the Note and the Consolidated Note for each 30 day period after the applicable deadline that the Company does not file the registration statement or the registration statement is not declared effective. WOMF has also been granted piggyback registration rights with respect to the shares of common stock issuable upon the conversion of the Notes it acquires and the Consolidated Note. Each of the Initial Note and Consolidated Note grants full ratchet anti-dilution protection to WOMF in the event that the Company issues common stock or rights to purchase common stock at a price less than the conversion or exercise price then in effect.

The Initial Note contains and the New Notes will contain a provision which provides that the holder will not be converted if the conversion would result in the holder becoming the beneficial owner of more than 9.99% of the Company's outstanding common stock.

17

Can B̅ Corp. and Subsidiaries

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2024

ClearThink Notes

The Company issued a convertible note in the principal amount of $15,000to ClearThink Capital Partners, LLC ("ClearThink") in September 2023 for a purchase price of $10,000. The note has a six month term and is past due. A note in the principal amount of $75,000was issued to ClearThink for a purchase price of $50,000in December 2023. This note has a nine month term. Each of the notes bears interest at a rate of twelve percent (12%) per annum and is convertible into the Company's common stock at a conversion price of $.0772per share.

On February 29, 2024, the Company completed the sale of a promissory note in the principal amount of $75,000to ClearThink. The purchase price of the note was $50,000, representing a 33.33% original issue discount. The note becomes due on November 29, 2024 and bears interest, payable upon maturity, at a rate of 12% per annum. ClearThink may convert the purchase price of the note and accrued and unpaid interest into shares of the Company's common stock at any time at a conversion price of $0.0772per share.

On February 13, 2024, the Company completed the sale of a promissory note in the principal amount of $75,000to ClearThink. The purchase price of the note was $50,000, representing a 33.33% original issue discount. The note becomes due on November 12, 2024 and bears interest, payable upon maturity, at a rate of 12% per annum. ClearThink may convert the purchase price of the note and accrued and unpaid interest into shares of the Company's common stock at any time at a conversion price of $0.0743per share.

In May 2024., the Company entered in a Note Extension Agreement with ClearThink which extended the maturity date of all notes with ClearThink to July 3, 2024. In connection, with the Note Extension Agreement, the Company issued a $250,000convertible note with the same terms as all other notes with ClearThink as well as 2,000,000shares of the Company's common stock.

Other Loans

During the year ended December 31, 2022, the Company entered into various agreements relating to the sales of future receivables for an aggregate purchase amount of approximately $450,000. The aggregate principal amounts are payable in weekly installments ranging from $2,917through $453until such time the obligations are fully satisfied. As of June 30, 2024, the total amounts outstanding were approximately $80,000.

On February 11, 2022, the Company entered into a $175,000unsecured 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 excess of $2,000,000. As of September 30, 2024 the total amount outstanding was $175,000.

Warrants

In connection with certain of the notes discussed above, the Company issued warrants to various lenders to purchase a total of 198,248shares of the Company's common stock. These warrants have no intrinsic value and their fair value is insignificant.

Related Party Note

The Company has entered into a promissory note with Pat Ferro, a co-founder of the Company. As of September 30, 2024, the total amount outstanding was $457,850. The Company's obligations under the promissory note are secured by a pledge of the Company's equity interest in Nascent.

18

Can B̅ Corp. and Subsidiaries

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2024

Note 9 - Stockholders' Equity

Preferred Stock

Each share of Series A Preferred Stock is convertible into 218 shares of CANB common stock and is entitled to 4,444votes. 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. As of September 30, 2024, five shares of Series A Preferred Stock were outstanding.

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 1,667shares of common stock. The shares of Series C Preferred Stock have voting rights as if fully converted. As of September 30, 2024, 1,100shares of Series C Preferred Stock were outstanding.

Each share of Series D Preferred Stock has 667 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.

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 4,000shares of a new Series D Preferred Stock with a par value of $0.001each. 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 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. As of September 30, 2024, 4,000shares of Series D Preferred Stock were outstanding.

19

Can B̅ Corp. and Subsidiaries

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2024

Note 10 - Stock Options

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

September 30,

2024

September 30,

2023

Per share fair value at grant date $ 0.036-0.05 $ -
Risk free interest rate 4.12%-4.30 % -
Expected volatility 224 % - %
Dividend yield 0 % - %
Expected life in years 5 -

A summary of stock options activity for the nine months ended September 30, 2024 is as follows:

Option Shares Weighted Average
Exercise Price

Weighted Average

Remaining

Contractual Life
(Years)

Outstanding, January 1, 2024 12,223,331 $ 3.08 3.89
Granted 27,019,284 0.04 5.00
Exercised - - -
Forfeited - - -
Expired - - -
Outstanding, September 30, 2024 39,242,615 $ 0.99 3.00

Stock-based compensation expense related to stock options during the three months ended September 30, 2024 and 2023 was $0and $1,451,665, respectively.

Stock-based compensation expense related to stock options during the nine months ended September 30, 2024 and 2023 was $1,163,636and $1,451,665, respectively.

Note 11 - Income Taxes

The Company's income tax provisions for the three and nine months ended September 30, 2024 and 2023 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.

20

Can B̅ Corp. and Subsidiaries

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2024

Note 12 - Commitments and Contingencies

Settlement

In June 2024, the Company entered into a Settlement Agreement with a counterparty related to a dispute in connection with a contract to purchase industrial hemp biomass. In connection with the settlement, the Company issued 4,825,000shares of common stock valued at $579,000.

Consulting Agreement

In July 2024, Nascent entered into a Consulting Agreement pursuant to which it retained a consultant to provide advice and consultation with respect to the licensing of Nascent's patents. For each licensing agreement entered into with a party introduced by the consultant, Nascent must pay to the consultant an amount between 1% and 3% of the Net Licensing Fee (as defined in the agreement) received by Nascent.

Revenue Sharing Agreement

In July 2024, ClearThink Capital Partners, LLC ("ClearThink") provided $50,000of funding to Nascent pursuant to a Revenue Sharing Agreement which requires Nascent to pay to ClearThink 5% of its Net Revenues (as defined in the agreement) from the enforcement or licensing of its patents until ClearThink has received $250,000of payments under the agreement. Upon Nascent's receipt of an aggregate of $1,000,000or more of funding from other Revenue Share Agreements, Nascent is required to repay to ClearThink the $50,000of funding provided by ClearThink and such $50,000payment shall be credited against the maximum $250,000of payments that ClearThink is entitled to under the agreement.

Settlement Agreement

In July 2024, the Company settled a lawsuit brought against the Company in Florida pursuant to a Settlement Agreement which requires the Company to pay $50,000to the plaintiff upon the recovery by Nascent of damages in excess of $5,000,000from prospective litigation to enforce Nascent's patent rights.

Note 13 - Subsequent Events

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

On October 25, 2015, Can B̅ implemented a legal reorganization which resulted in NPH owning all of the outstanding stock of Can B̅. Consequently, Can B̅ became a direct, wholly owned subsidiary of NPH. Each share of each class of Can B̅ stock issued and outstanding immediately prior to the legal reorganization automatically converted into an equivalent corresponding share of NPH and Can B̅'s stockholders immediately prior to the consummation of the legal reorganization became stockholders of NPH.

In connection with the reorganization, Can B̅ transferred to NPH, and NPH assumed, sponsorship of Can B̅'s 2021 Incentive Stock Option Plan along with all of Can B̅'s rights and obligations under such plan.

21

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

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

Prior to June 2024, The Company was in the business of promoting health and wellness through its development, manufacture and sale of products containing cannabinoids derived from hemp biomass and the licensing of durable medical devices. Can B̅'s products included oils, creams, moisturizers, isolate, gel caps, spa products, and concentrates and lifestyle products. Can B̅ developed its own line of proprietary products and sought synergistic value through acquisitions in the hemp industry.

On March 14, 2024, an auction of the assets of our hemp division was conducted under Article 9 of the Uniform Commercial Code following allegations by Arena that we were in breach of our obligations under certain notes and a forbearance agreement. See "Part II Item 1. Legal Proceedings."

Following the auction, we continued our hemp operations on a reduced scale using equipment provided by third parties and the services of third-party processors. Historically, revenues from our hemp division supported, in part, our durable medical equipment business conducted through Duramed. Due to reduced support from the hemp division, Duramed is operating with reduced staff which has adversely impacted revenues. In June 2024,, our Board of Directors concluded that as a result of the impact of the auction conducted by Arena under Article 9 of the Uniform Commercial Code on the hemp division, it is no longer feasible to continue our hemp operations. As a result, we are no longer pursuing the development, manufacture or sale of hemp derived products. Going forward, our primary focus will be on protecting and commercializing the cannabis patents acquired by Nascent, continuing to collect Duramed receivables and reestablishing the Company's production of the Longevity Brand Superfood drink mix for Brooke Burke Body, Inc.

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

Results of Operations

Three months ended September 30, 2024 compared to three months ended September 30, 2023.

Revenues decreased $403,688. The decrease largely due to the normalization of sales activity in 2023, the Company discontinuing the sale of certain products and the Company's decision to discontinue its hemp operations.

Cost of product sales decreased $819,831 due to inventory adjustments taken and the decrease in revenue.

Operating expenses decreased $329,100 due to a decrease consulting fees, rent and other operating expenses.

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023.

Revenues decreased $1,122,203. The decrease largely due to the normalization of sales activity with 2023, the Company ending the sale of certain of its product offerings around hemp products and the Company's decision to discontinue its hemp operations.

Cost of product sales decreased $420,201 due to inventory adjustments taken and decrease in revenue.

Operating expenses increased $2,518,143 as a result of loss on sale of property and equipment as well as $1,163,636 in stock compensation expense in the nine months ended September 30, 2024 offset by decrease consulting fees, rent and other operating expenses.

Liquidity and Capital Resources

At September 30, 2024, the Company had cash and cash equivalents of $7,879 and negative working capital of $10,049,951. Cash and cash equivalents decreased $26,127. For the nine months ended September 30, 2024, $95,026 was provided by operating activities and $10,337 and $110,816 was used by investing and financing activities, respectively.

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.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. These amendments address investor requests for enhanced transparency regarding income tax information. Specifically, they improve income tax disclosures related to rate reconciliation and income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The Company is evaluating the impact the adoption of this guidance will have on its consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses, and is effective for fiscal years beginning after December 31, 2023 and for interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis. The Company is currently evaluating the impact of this standard on the consolidated financial statements.

22

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

None.

ITEM 4. CONTROLS AND PROCEDURES

(A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

As of September 30, 2024, 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 have concluded that our disclosure controls and procedures are ineffective to ensure that information disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. This determination was based on the small size of our accounting staff and the lack of segregation of duties.

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

(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 September 30, 2024 covered by this Quarterly Report on Form 10-Q, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

PART II- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On April 28, 2021, the Company was served with a commercial legal action against the Company and certain officers by David Weissberg and Donna Marino, who are investors in the Company (collectively, the "Investors"). The complaint was filed in the Supreme Court of the State of New York, County of Nassau, Index No. 605191/2021. The complaint alleges four causes of action.

The first cause of action alleged that the Company breached Securities Purchase Agreements with the Investors by failing to assist the Investors in getting opinion letters to remove the restrictive legends from their shares, even though the Company made introductions and requests to the Company's counsel, provided supporting documents for the Investor's shares, and ultimately the opinion letters could not be rendered because the Investors failed to submit required documentation to counsel.

The second cause of action was similar to the first but related to alleged misrepresentations regarding removing the restrictive legends from shares that were issued for services rather than purchased.

The third cause of action alleged 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.

The Investors' claims against the Company were dismissed in June 2022. The court ruled that judgment should be entered only against the individual defendants and not against the Company. The Investors have yet to enter judgment.

In November 24, 2021, a vendor of the Company filed an amended suit against the Company in Florida, Case No. 2021 CA 001797, for monies allegedly owed and civil theft relating to such monies and related products and fraud in the inducement. We do not believe we owe such vendor any amount. The court has entered a default judgement against the Company for our failure to timely answer the complaint, which default has since been overturned. Subsequently the case has been set for interrogatories and document production which activities are being fulfilled.

On or about August 11, 2022, a Complaint was filed by Evexia Plus, LLC against Can B Corp. in a product payment trade dispute. Case Number 63-CV-2022-900692.00 in the Circuit Court of Tuscaloosa County, AL. On 1-26-2023 the court ordered a Summary Judgement in the amount of $336,924. The parties are trying to work out a payment schedule tied to production to satisfy the judgement.

On December 1, 2023,the Company, received a notice from Arena Special Opportunities Partners I, LP, Arena Special Opportunities Fund, LP and Arena Investors, LP (collectively, the "Arena Entities" or "Arena") advising that by virtue of defaults in the performance of the obligations of the Company and its subsidiaries to the Arena Entities, the Arena Entities intended to conduct a public auction of certain assets of the Company and its subsidiaries under Article 9 of the Uniform Commercial Code.

The Arena Entities collectively hold approximately $3,838,770 aggregate principal amount of Convertible Notes (the "Arena Notes") issued by the Company. The Arena Entities previously notified the Company and its subsidiaries that they were in default of certain obligations under the Forbearance Agreement dated February 27, 2023 among the Company, its subsidiaries and the Arena Entities pursuant to which the Arena Entities agreed to forbear from exercising remedies under the Arena Notes until December 31, 2024 provided that no defaults occurred under the Arena Notes or the Forbearance Agreement. The alleged defaults include a failure to deliver account control agreements, failure to enter into a servicing agreement, failure to timely make certain payments and the unauthorized use and misuse of receivable assigned to the Arena Entities.

23

On February 27, 2024, the Supreme Court, County of New York (the "Court"), denied a motion made by the Company seeking a temporary restraining order and preliminary injunction to halt the proposed sale. As a result of the decision, the Arena Entities proceeded with its proposed auction of the Company's hemp division assets and the auction took place on March 14, 2024. Approximately $300,000 of proceeds were generated by the sale.

On April 7, 2024, Arena filed a complaint in the Court against the Company, it subsidiaries and certain officers of the Company and its subsidiaries alleging tortious interference with the auction and seeking a declaratory judgment that the Company is in breach of the Arena Notes and the Forbearance Agreement and that Arena has the right to auction certain equipment held at a Company facility that is not owned by the Company or any of its subsidiaries. Arena also alleges that that was induced by fraud to forbear from enforcing its rights to collect the outstanding loans owed by the Company and filed a motion to enjoin the Company from interfering with the auction. On October 25, 2024, the court held argument on Arena's motion and stated on the record that it was inclined to grant Arena some form of preliminary injunctive relief. The court has not issued any such order. The Company believes that Arena's claims are without merit and intends to vigorously defend Arena's claims.

Other than above, we are not aware of any pending or threatened legal proceedings in which we are involved.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on April 15, 2024 except as described below.

An auction of the assets of our hemp division was conducted under Article 9 of the Uniform Commercial Code following allegations by certain affiliated creditors that we were in breach of our obligations under certain notes and a forbearance agreement. See "Item 1. Legal Proceedings."

In June 2024 our Board of Directors concluded that as a result of the impact of the auction on the hemp division, it is no longer feasible to continue our hemp operations. As a result, we will no longer pursue the development, manufacture or sale of hemp derived products.

Historically, revenues from our hemp division supported, in part, our durable medical equipment business conducted through Duramed. Due to the elimination of support from the hemp division, Duramed is operating with reduced staff which has adversely impacted revenues. Going forward, our primary focus will be on protecting and commercializing the cannabis patents recently acquired by Nascent; however, the discontinuance of our hemp division and its impact on the Duramed division increases the risk that we will not be able to continue as a going concern.

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

In August 2024, the Company issued 6,500,000 shares of common stock to consultants pursuant to the terms of consulting agreements. The Company relied upon the exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act") in connection with these issuances.

In August 2024, the Company issued 1,750,000 shares of common stock upon the conversion of an outstanding note. The Company relied upon the exemption provided by Section 3(a)(9) of the Securities Act of 1933 in connection with this issuance.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

In September 2023, Arena Special Opportunities Partners I, LP and Arena Special Opportunities Fund, LP provided notice to the Company that it is in default of certain terms of their Forbearance Agreement with the Company dated as of February 27, 2023 and thus have right to accelerate the payment of the Company's obligations under the $3.8 million aggregate principal of notes held by them. In April 2024, the Arena entities filed a lawsuit seeking a declaratory judgment that the Company is in breach of the Arena Notes and the Forbearance Agreement

As of September 30, 2024, notes payable in the aggregate principal amount of approximately $8.7 million were past due.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

24

ITEM 5. OTHER INFORMATION

In July 2024, Nascent entered into a Consulting Agreement with Vivid Integrated Solutions, LLC ("Vivid") pursuant to which it retained Vivid to provide advice and consultation with respect to the licensing of Nascent's patents. For each licensing agreement entered into with a party introduced by Vivid, Nascent must pay to Vivid an amount between 1% and 3% of the Net Licensing Fee (as defined in the agreement) received by Nascent.

In July 2024, ClearThink provided $50,000 of funding to Nascent pursuant to a Revenue Sharing Agreement which requires Nascent to pay to ClearThink 5% of its Net Revenues (as defined in the agreement) from the enforcement or licensing of its patents until ClearThink has received $250,000 of payments under the agreement. Upon Nascent's receipt of an aggregate of $1,000,000 or more of funding from other Revenue Share Agreements, Nascent is required to repay to ClearThink the $50,000 of funding provided by ClearThink and such $50,000 payment shall be credited against the maximum $250,000 of payments that ClearThink is entitled to under the agreement.

In August 2024, the Company entered into a Consulting Agreement with Magna Global Ventures, LLC ("Magna") pursuant to which it engaged Magna to provide certain consulting services, including services pertaining to strategic planning, capital formation, marketing and introduction to financing sources. In consideration of these services, the Company issued 3,500,000 shares of its common stock to Magna.

ITEM 6. EXHIBITS

Item 15. Exhibits, Financial Statement Schedules.

Exhibits Schedule

The following exhibits are filed with this Report:

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)
2.5 Agreement and Plan of Merger dated October 23, 2025 among Can B Corp., Nascent Pharma Holdings, Inc. and Nascent Merger Sub, Inc.(27)
3.1 Articles of Incorporation, as amended(1)
3.2 Bylaws(2)
3.3 Articles of Merger effective October 25, 2024(27)
4.1 Articles of Amendment designating Series A Preferred Stock rights, as amended(9)
4.2 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 Memorandum of Understanding with Sam International and ZetrOZ Systems LLC(3)
10.8 Can B̅ Corp. 2020 Incentive Stock Option Plan(8)
10.9 Arena Securities Purchase Agreement(10)
10.10 ASOF Original Issue Discount Senior Secured Convertible Promissory Note(10)
10.11 ASOF Warrant to Purchase Common Stock(10)
10.12 ASOP Original Issue Discount Senior Secured Convertible Promissory Note(10)
10.14 ASOP Warrant to Purchase Common Stock(10)
10.15 Arena Security Agreement(10)
10.16 Arena Intellectual Property Security Agreement(10)
10.17 Arena Registration Rights Agreement(10)
10.18 Arena Holding Escrow Agreement(10)
10.19 Arena Guaranty Agreement from Company Subsidiaries(10)
10.20 Amendment to 2020 ASOF Promissory Note(11)
10.21 Amendment to 2020 ASOP Promissory Note(11)
10.22 2021 Arena Securities Purchase Agreement(11)
10.23 2021 ASOF Original Issue Discount Senior Secured Convertible Promissory Note(11)
10.24 2021 ASOF Warrant to Purchase Common Stock(11)
10.25 2021 ASOP Original Issue Discount Senior Secured Convertible Promissory Note(11)
10.26 2021 ASOP Warrant to Purchase Common Stock(11)
10.27 2021 Arena Registration Rights Agreement(11)
10.28 2021 Addendum to Arena Security Agreement(11)
10.29 2021 Addendum to Arena Intellectual Property Security Agreement(11)
10.30 2021 Addendum to Arena Guaranty Agreement from Company Subsidiaries(11)
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)
25
10.35 Commercial Lease with Makers Developments LLC(13)
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)
10.39 PrimeX Distribution Agreement(15)
10.40 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 Fourth Man Securities Purchase and Related Agreements(16)
10.44 Extension and Amendment to Arena Transactional Documents(16)
10.45 Amended Placement Agent Agreement(18)
10.46 Alumni Capital Securities Purchase and Related Documents(19)
10.47 Arena Exchange Agreement(20)
10.48 Agreement with Forever Bradst(21)
10.49 Promissory Note Modification Agreement with TWS Pharma LLC(22)
10.50 Walleye Securities Purchase Agreement(22)
10.51 Walleye Promissory Note(22)
10.52 Walleye Revenue Pledge and Security Agreement(22)
10.53 Walleye Common Stock Purchase Warrant(22)
10.54 Amendment to Walleye Common Stock Purchase Agreement(22)
10.55 Walleye Registration Rights Agreement(22)
10.56 Intercreditor Agreement among Can B Corp., Walleye and Arena(22)
10.57 Arena Forbearance Agreement(22)
10.58 Amendment No. 2 to Blue Lake Partners Promissory Note and Amendment to Securities Purchase Agreement, Consent and Waiver Agreement(22)
10.59 Amendment No. 2 to Mast Hill Fund Promissory Note, Amendment to Securities Purchase Agreement, Consent and Waiver Agreement(22)
10.60 Amendment No. 2 to Fourth Man Promissory Note, Amendment to Securities Purchase Agreement, Consent and Waiver Agreement(22)
10.61 Walleye May 2023 Promissory Note(23)
10.62 Securities Purchase Agreement dated as of October 26, 2023 between Can B Corp. and Walleye Opportunities Master Fund Ltd.(24)
10.63 Promissory Note dated October 27, 2023 issued by Can B Corp. to Walleye Opportunities Master Fund Ltd.(24)
10.64 Consolidated Note dated October 27, 2023 issued by Can B Corp. to Walleye Opportunities Master Fund Ltd.(24)
10.65 Distribution and Assignment Agreement dated as of October 27, 2023 among Can B Corp, Nascent Pharma, LLC and Walleye Opportunities Master Fund Ltd.(24)
10.66 Registration Rights Agreement dated as of October 27, 2023 between Can B Corp and Walleye Opportunities Master Fund Ltd.(24)
10.67 Employment Agreement with Marco Alfonsi dated February 8, 2024(25)
10.68 Employment Agreement with Stanley Teeple dated February 8, 2024(25)
10.69 Amendment Modification to Convertible Promissory Note dated August 7, 2023 between Can B Corp. and ClearThink Capital Partners, LLC(25)
10.70 Promissory Note dated September 22, 2023 issued by Can B Corp. to ClearThink Capital Partners, LLC(25)
10.71 Promissory Note dated December 20, 2023 issued by Can B Corp. to ClearThink Capital Partners, LLC(25)
10.72 Promissory Note dated February 29, 2024 issued by Can B Corp. to ClearThink Capital Partners, LLC(25)
10.73 Revenue Sharing Agreement dated as of July 26, 2024 between Nascent Pharma, LLC and ClearThink Capital Partners, LLC(26)
10.74 Compensation Plan Agreement dated October 25, 2024 between Can B Corp. and Nascent Pharma Holdings, Inc.(27)
10.75 Consulting Agreement dated as of July 29, 2024 between Nascent Pharma, LLC and Vivid Integrated Solutions, LLC
10.76 Consulting Agreement dated as of August 26, 2024 between Can B Corp. and Magna Global Ventures, LLC
10.77 Secured Demand Promissory Note dated August 23, 2024 issued to Pasquale Ferro
10.78 Membership Interest Pledge Agreement dated as of August 23, 2024 between Can B Corp. and Pasquale Ferro
14.1 Code of Ethics(1)
21.1 List of 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
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)
26
(1) Filed with the Annual Report on Form 10-K filed with the SEC on April 2, 2020 and incorporated herein by reference.
(2) Filed with the Form S-1 Registration Statement filed with the SEC on December 2, 2015 and incorporated herein by reference.
(3) Filed with the Current Report on Form 8-K filed with the SEC on January 30, 2019 and incorporated herein by reference.
(4) Filed with the Current Report on Form 8-K filed with the SEC on December 6, 2019 and incorporated herein by reference.
(5) Filed with the Current Report on Form 8-K filed with the SEC on February 18, 2020 and incorporated herein by reference.
(6) Filed with the Current Report on Form 8-K filed with the SEC on January 15, 2019 and incorporated herein by reference.
(7) Filed with the Form 1-A/A, Part II, filed with the SEC on July 17, 2020 and incorporated herein by reference.
(8) Filed with the Form 1-A POS, Part II, filed with the SEC on September 11, 2020 and incorporated herein by reference.
(9) Filed with the Current Report on Form 8-K filed with the SEC on November 23, 2020 and incorporated herein by reference.
(10) Filed with the Annual Report on Form 10-K filed with the SEC on April 15, 2022 and incorporated herein by reference.
(11) Filed with the Quarterly Report on Form 10-Q filed with the SEC on May 21, 2021 and incorporated herein by reference.
(12) Filed with the Current Report on Form 8-K filed with the SEC on August 17, 2021 and incorporated herein by reference.
(13) Filed with the Current Report on Form 8-K filed with the SEC on September 1, 2021 and incorporated herein by reference.
(14) Filed with the Current Report on Form 8-K filed with the SEC on March 31, 2022 and incorporated herein by reference.
(15) Filed with the Form 10-K filed with the SEC on April 15, 2022 and incorporated herein by reference.
(16) Filed with the Current Report on Form 8-K filed with the SEC on April 29, 2022 and incorporated herein by reference.
(17) Filed with Form S-1/A filed with the SEC on February 14, 2022 and incorporated herein by reference.
(18) Filed with Form S-1/A filed with the SEC on May 25, 2022 and incorporated herein by reference.
(19) Filed with the Current Report on Form 8-K filed with the SEC on June 15, 2022 and incorporated herein by reference.
(20) Filed with Form S-1/A filed with the SEC on May 25, 2022 and incorporated herein by reference.
(21) Filed with the Current Report on Form 8-K filed with the SEC on July 25, 2022 and incorporated herein by reference.
(22) Filed with the Annual Report on Form 10-K filed with the SEC on April 17, 2023 and incorporated herein by reference.
(23) Filed with the Quarterly Report on Form 10-Q filed with the SEC on May 22, 2023 and incorporated herein by reference.
(24) Filed with the Current Report on Form 8-K filed with the SEC on November 3, 2023 and incorporated herein by reference.
(25) Filed with the Annual Report on Form 10-K filed with the SEC on April 15, 2024 and incorporated herein by reference.
(26) Filed with the Quarterly Report on Form 10-Q filed with the SEC on August 19, 2024 and incorporated herein by reference.
(27) Filed with the Current Report on Form 8-K filed with the SEC on October 28, 2024 and incorporated herein by reference.
27

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: November 19, 2024 By: /s/ Marco Alfonsi
Marco Alfonsi,
Chief Executive Officer
Date: November 19, 2024 By: /s/ Stanley L. Teeple
Stanley L. Teeple,
Chief Financial Officer
28