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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

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

 

For the quarterly period ended June 30, 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

 

The number of shares of the registrant’s only class of common stock issued and outstanding as of August 19, 2024 is 63,659,230.

 

 

 

 

 

 

Can B Corp.

FORM 10-Q

June 30, 2024

 

TABLE OF CONTENTS

 

      Page
      No.
  PART I. - FINANCIAL INFORMATION    
Item 1. Financial Statements  
  Condensed Consolidated Balance Sheets (unaudited) – June 30, 2024 and December 31, 2023   3
  Condensed Consolidated Statements of Operations (unaudited) – Three and Six Months Ended June 30, 2024 and 2023   4
  Condensed Consolidated Statement of Stockholders’ Equity (Deficit) (unaudited) Three and Six Months Ended June 30, 2024 and 2023   5
  Condensed Consolidated Statements of Cash Flows (unaudited) – Six Months Ended June 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.   21
Item 3 Quantitative and Qualitative Disclosures About Market Risk.   22
Item 4 Controls and Procedures.   22
  PART II - OTHER INFORMATION    
       
Item 1. Legal Proceedings   22
Item A. Risk Factors   23
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   23
Item 3. Defaults Upon Senior Securities   23
Item 4. Mine Safety Disclosures   23
Item 5. Other Information   24
Item 6. Exhibits   24

 

2

 

 

PART 1 – FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Can B̅ Corp. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

 

   June 30,   December 31, 
   2024   2023 
Assets          
Current assets:          
Cash and cash equivalents  $-   $34,006 
Accounts receivable, less allowance for doubtful accounts of $2,882,228 and $2,818,395, respectively   3,404,908    3,723,344 
Inventory   563,370    1,619,542 
Prepaid expenses and other current assets   10,062    4,137 
Total current assets   3,978,340    5,381,029 
           
Other assets:          
Deposits   239,285    235,418 
Intangible assets, net   -    95,144 
Property and equipment, net   619,907    4,106,283 
Right of use assets, net   65,771    295,151 
Other noncurrent assets   16,626    13,139 
Total other assets   941,589    4,745,135 
           
Total assets  $4,919,929   $10,126,164 
           
Liabilities and Stockholders’ Equity (Deficit)          
Current liabilities:          
Accounts payable  $2,614,157   $1,997,643 
Due to related party   448,850    357,243 
Notes and loans payable, net   7,982,587    8,811,596 
Warrant liabilities   -    1,766 
Operating lease liability - current   65,771    254,391 
Total current liabilities   11,111,365    11,422,639 
           
Total liabilities  11,111,365   11,422,639 
           
Commitments and contingencies (Note 12)   -    - 
           
Stockholders’ equity (deficit):          
Preferred stock, authorized 5,000,000 shares:          
Series A Preferred stock, no par value: 20 shares authorized, 5 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively   5,320,000    5,320,000 
Series C Preferred stock, $0.001 par value: 2,000 shares authorized, 1,100 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively   2,900,039    2,900,039 
Series D Preferred stock, $0.001 par value: 4,000 shares authorized, 4,000 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively   4    4 
           
Common stock, no par value; 1,500,000,000 shares authorized, 61,872,981 and 32,753,196 issued and outstanding at June 30, 2024 and December 31, 2023, respectively   85,152,193    83,020,998 
Common stock issuable, no par value; 36,248 shares at June 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   (110,670,490)   (102,480,698)
Total stockholders’ equity (deficit)   (6,191,436)   (1,296,475)
           
Total liabilities and stockholders’ equity (deficit)  $4,919,929   $10,126,164 

 

See notes to consolidated financial statements

 

3

 

 

Can B̅ Corp. and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)

 

             
   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
   2024   2023   2024   2023 
Revenues                    
Product sales  $-   $255,142   $-   $1,063,890 
Service revenue   272,287    165,451    641,383    296,008 
Total revenues   272,287    420,593    641,383    1,359,898 
Cost of revenues   665,471    934,425    1,858,632    1,459,002 
Gross profit   (393,184)   (513,832)   (1,217,249)   (99,104)
 Selling, general and administrative   1,173,836    1,307,780    2,861,894    3,157,410 
Loss on sale of assets   -    -    3,142,769    - 
                     
Total operating expenses   1,173,836    1,307,780    6,004,663    3,157,410 
                     
Loss from operations   (1,567,020)   (1,821,612)   (7,221,912)   (3,256,514)
                     
Other income (expense):                    
Change in fair value of warrant liability   1,766    101,050    1,766    180,468 
Interest expense   (463,366)   (416,415)   (969,548)   (750,382)
Other income (expense)   (3)   109,964    (98)   69,974 
Other income (expense)   (461,603)   (205,401)   (967,880)   (499,940)
                     
Loss before provision for income taxes   (2,028,623)   (2,027,013)   (8,189,792)   (3,756,454)
                     
Provision for income taxes   -    -    -    9,596 
                     
Net loss  $(2,028,623)  $(2,027,013)  $(8,189,792)  $(3,766,050)
                     
Loss per share - basic and diluted  $(0.04)  $(0.37)  $(0.18)  $(0.72)
Weighted average shares outstanding - basic and diluted   54,631,753    5,553,317    45,984,283    5,227,618 

 

 

See notes to consolidated financial statements

 

4

 

 

Can B̅ Corp. and Subsidiaries

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

 

Three Months Ended June 30, 2024 and 2023

 

   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Issuable   Shares   Amount   Capital   Deficit   Total 
   Series A
Preferred Stock		   Series B
Preferred Stock		   Series C
Preferred Stock		   Series D
Preferred Stock		   Common Stock   Common Stock   Treasury Stock   Additional Paid-in   Accumulated     
   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Issuable   Shares   Amount   Capital   Deficit   Total 
Balance, April 1, 2024   5   $5,320,000    -   $-    1,100   $2,900,039    4,000   $4    44,798,583   $84,000,265   $119,586    36,248   $(572,678)  $11,559,910   $(108,641,867)  $(5,314,741)
                                                                                 
Issuance of common stock for payables   -    -    -    -    -    -    -    -    5,749,398    487,428    -    -    -    -    -    487,428 
                                                                                 
Issuance of common stock for contract settlement   -    -    -    -    -    -    -    -    4,825,000    579,000    -    -    -    -    -    579,000 
                                                                                 
Issuance of common stock in lieu of interest payments   -    -    -    -    -    -    -    -    3,500,000    82,500    -    -    -    -    -    82,500 
                                                                                 
Issuance of common stock with note extension   -    -    -    -    -    -    -    -    3,000,000    3,000    -    -    -    -    -    3,000 
Net loss   -    -    -    -    -    -    -    -    -    -         -    -    -    (2,028,623)   (2,028,623)
                                                                                 
Balance, June 30, 2024   5   $5,320,000    -   $-    1,100   $2,900,039    4,000   $4    61,872,981   $85,152,193   $119,586    36,248   $(572,678)  $11,559,910   $(110,670,490)  $(6,191,436)
                                                                                 
Balance, April 1, 2023   5   $5,320,000    -   $-    1,100   $2,900,039    4,000   $4    5,360,434   $80,172,548   $119,586    36,248   $(572,678)  $8,944,609   $(94,429,872)  $2,454,236 
                                                                                 
Issuance of common stock for services rendered   -    -    -    -    -    -    -    -    150,000    74,250    -    -    -    -    -    74,250 
                                                                                 
Issuance of common stock for purchase of equipment   -    -    -    -    -    -    -    -    125,000    46,875    -    -    -    -    -    46,875 
                                                                                 
Sale of common stock   -    -    -    -    -    -    -    -    -    -    -    -    -    -    -    - 
                                                                                 
Issuance of common stock in lieu of interest payments   -    -    -    -    -    -    -    -    65,358    6,538    -    -    -    -    -    6,538 
                                                                                 
Net loss   -    -    -    -    -    -    -    -    -    -         -    -    -    (2,027,013)   (2,027,013)
                                                                                 
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  

 

5

 

 

Six Months Ended June 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, January 1, 2024   5   $5,320,000    -   $-    1,100   $2,900,039    4,000   $4    32,753,196   $83,020,998   $119,586    36,248   $(572,678)  $10,396,274   $(102,480,698)  $(1,296,475)
                                                                                 
Issuance of common stock for payables   -    -    -    -    -    -    -    -    5,749,398    487,428    -    -    -    -    -    487,428 
                                                                                 
Issuance of common stock for note repayments   -    -    -    -    -    -    -    -    11,866,995    964,764    -    -    -    -    -    964,764 
                                                                                 
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   -    -    -    -    -    -    -    -    -    -    -    -    -    -    (8,189,792)   (8,189,792)
                                                                                 
Balance, June 30, 2024   5   $5,320,000    -   $-    1,100   $2,900,039    4,000   $4    61,872,981   $85,152,193   $119,586    36,248   $(572,678)  $11,559,910   $(110,670,490)  $(6,191,436)
                                                                                 
Balance, January 1, 2023   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   -    -    -    -    -    -    -    -    727,850    595,807    -    -    -    -    -    595,807 
                                                                                 
Issuance of common stock for purchase of equipment   -    -    -    -    -    -    -    -    125,000    46,875    -    -    -    -    -    46,875 
Warrants issued in connection with the issuance of convertible note   -    -    -    -    -    -    -    -    -    -    -    -    -