NASC 10-K & 10-Q changes, risk factors and insider trading

Our common stock is thinly thinly-traded,traded, and in the future, may continue to be thinly-traded, and you may be unable to sell at or near ask prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate such shares.

As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. Section 404 of the Sarbanes-Oxley Act requires that we evaluate and determine the effectiveness of our internal control over financial reporting and provide a management report on the internal control over financial reporting. If we have a material weakness in our internal control over financial reporting, we may not detect errors on a timely basis and our consolidated financial statements may be materially misstated. We may not be able to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, our management will be unable to conclude that our internal control over financial reporting is effective. Moreover, when we are no longer a smaller reporting company, our independent registered public accounting firm will be required to issue an attestation report on the effectiveness of our internal control over financial reporting. Even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm may conclude that there are material weaknesses with respect to our internal controls or the level at which our internal controls are documented, designed, implementedimplemented, or reviewed.

If we are unable to conclude that our internal control over financial reporting is effective, or when we are no longer a smaller reporting company, if our auditors were to express an adverse opinion on the effectiveness of our internal control over financial reporting because we had one or more material weaknesses, investors could lose confidence in the accuracy and completeness of our financial disclosures, which could cause the price of our common stock to decline. Internal control deficiencies could also result in a restatement of our financial financial results in the future. We have concluded that are internal controls have not been sufficient; however, we have begun to take steps to remediate such insufficiencies. We have communicated to our accounting review firm and audit that we have accomplished the following: (i) we have transitioned each operating subsidiary to a separate bookkeeping system (QuickBooks) and input data at each operating location on a daily basis vs. previously batching data and inputting at corporate office. Corporate then verifies data prior to accepting, (ii) we have a QuickBooks trained person with who inputs data on a real-time basis but not allowed at subsidiary level to access or make certain changes, (iii) we have installed for the hemp division companies (Botanical Biotech (Miami), TN Botanicals (TN), CoCO botanicals (CO) daily tracking procedures whereby every ounce and pound of raw materials (biomass or crude) is tracked by lot number from input to processing through to finished product, (iv) our accounts receivable tracking system, which is essentially our Duramed Division receivables, is now tracking by medical device unit number, by doctor, by location, by insurance billing company, and we have a far more refined software track and billing system than we did prior quarters, (v) we have consolidate consolidated banking to a master account with our primary bank (Investors M&T Bank) by subsidiary and only have one independent subsidiary bank in TN for TN Botanicals which is managed for balances through Investors Bank,subsidiary, (vi) we have instituted a new procedure for any payables which requires double signaturesconfirmation to release any funds for any reason, (vii) and we have changed merchant accounts to a single user to better tie out to bank balances and accounts receivable,receivable. and (viii) Pure Health Products, LLC, our production facility in Lacey WA in mid-November just received NSF Certification (National Sanitation Foundation), the highest certification possible which now allows us to bid and product products for major national retailers but also has the highest certification and maintenance program in the food supplement industry. NSF uses a sophisticated MARKOV software system to track ever incoming product and package, manage the formulation process and makes appropriate adjustments to every material and unit down to the gram.

The holders of our shares of common stock and personspeople who desire to purchase them in the future should be aware that there may be significant state law restrictions upon the ability of investors to resell our shares. We currently do not intend to and may not be able to qualify securities for resale in states which require shares to be qualified before they can be resold by our shareholders.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act, or the JOBS Act. The Section 107 of the JOBS Act provides that we may elect to utilize the extended transition period for complying with new or revised accounting standards and such election is irrevocable if made. As such, we have made the election to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. Please refer to a discussion under “Risk Factors” of the effect on our financial statements of such election.

As an emerging growth company company, we are exempt from Section 404(b) of the Sarbanes Oxley Act. Section 404(a) requires Issuers to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess the effectiveness of such internal controls and procedures. Section 404(b) requires that the registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting. As an emerging growth company, we are also exempt from Section 14A (a) and (b) of the Exchange, which require the shareholder approval of executive compensation and golden parachutes.

Our short operating history in our industry may hinder our ability to successfully meet our objectives and makes it difficult for potential investors to evaluate our business or prospective operations. As an early stageearly-stage company, we are subject to all the risks inherent in the financing, expenditures, operations, complications and delays inherent in a new business. Accordingly, our business and success faces risks from uncertainties faced by developing companies in a competitive environment. There can be no assurance that our efforts will be successful or that we will ultimately be able to attain profitability.

Current global financial conditions and recent market events have been characterized by increased volatility and the resulting tightening of the credit and capital markets has reduced the amount of available liquidity and overall economic activity. We cannot guarantyguarantee that debt or equity financing, the ability to borrow funds or cash generated by operations will be available or sufficient to meet or satisfy our initiatives, objectives or requirements. Our inability to access sufficient amounts of capital on terms acceptable to us for our operations will negatively impact our business, prospects, liquidity and financial condition.

We will need to grow increase the size of our organization, and we may experience difficulties in managing any growth we may achieve.

Because we have limited financial and managerial resources, we have focused our efforts on particular products. As a result, we may forego or delay the pursuit of opportunities with other products that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Any failure to improperly assess potential products could result in missed opportunities and/or our focus on products with low market potential, which would harm our business and financial condition.

Our business is dependent upon our trademarks, trade secretssecrets, the patents recently acquired by Nascent and other intellectual property rights. There is a risk of certain valuable trade secrets being exposed to potential misappropriation. The efforts we have taken to protect our proprietary rights may not be sufficient or effective. Any significant impairment of our intellectual property rights could harm our business or our ability to compete. There is a risk that we may have insufficient resources to counter adequately such misappropriation or infringement through negotiation or the use of legal remedies. It may not be practicable or cost effective for us to fully protect our intellectual property rights in some countries or jurisdictions. If we are unable to successfully identify and stop unauthorized use of our intellectual property, we could lose potential revenue and experience increased operational and enforcement costs, which could adversely affect our financial condition, condition, results of operations and business.

Our entry into the rapidly growing CBD, CBN, CBG and delta-8 markets may place a significant strain on our resources and increase demands on our executive management, personnel and systems, and our operational, administrativeadministrative, and financial resources may be inadequate. We may also not be able to effectively manage any expanded operations,operations or achieve planned growth on a timely or profitable basis, particularly if the number of customers using our technology significantly increases or their demands and needs change as our business expands. If we are unable to manage expanded operations effectively, we may experience operating inefficiencies, the quality of our products and services could deteriorate, and our business and results of operations could be materially adversely affected.

If we or any of our suppliers or third-partiesthird parties on which we rely for the development, manufacturing, marketing, or sale of our products fails to comply with regulatory requirements applicable to the development, manufacturing, marketing, and sale of our product candidates, regulatory agencies agencies may take action against us or them, which could significantly harm our business.

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-ownedwholly owned subsidiary. The Company is presently in the process of dissolving Prosperity.

Compensation expenses increaseddecreased $2,201,970 from $4,997,155 in 2021 to $7,199,125$4,275,357 primarily related to ana increasedecrease in non-cash stock basedstock-based compensation expense.

Consulting and professional fees increaseddecreased $1,447,262 from $3,968,744 $3,591,054 in 20212023. The decrease relates to $5,416,006one in 2022. The 2022 expensetime amount includesincluding legal, accounting, and other consulting fees and services incurred during the year ending December 31, 2022. The increase was2022 related to an increase in legal fees and increase in consulting fees related to expansion of our durable medical device offerings as well as additional consulting fees related to formulation and development consulting related to hemp product development and other product enhancements.enhancements which did not recur in 2023 Other operating expenses decreased $1,070,971 which is mainly due to decrease in rent expense from closing certain facilities and other cost saving initiatives.

As of December 31, 2022,2023, the Company had cash and cash equivalents of $73,194$34,006 and negative working capital of $3,281,494.$5,747,103. Cash and cash equivalents decreased $375,807$31,519 from $449,001 at December 31, 2021compared to $73,194 at December 31, 2022. For the year ended December 31, 2022, $3,571,6172023, $1,349,938 was provided by financing activities, and $3,947,424$1,311,838 was used in operating activities.

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

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

Revenues decreased $148,306.$403,688. The decrease largely due to the normalization of sales activity in 2023 and2023, the Company discontinuing the sale of certain products products.and the Company’s decision to discontinue its hemp operations.

SixNine months ended JuneSeptember 30, 2024 compared to sixnine months ended JuneSeptember 30, 2023.

Revenues decreased $718,515.$1,122,203. The decrease largely due to the normalization of sales activity with 2023 and2023, the Company ending the sale of certain of its product offerings around hemp products.products and the Company’s decision to discontinue its hemp operations.

Cost of product sales increaseddecreased $399,630$420,201 due to inventory adjustments taken.taken and decrease in revenue.

Operating expenses increased $2,847,253$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 sixnine months ended JuneSeptember 30, 2024 offset by decrease consulting fees, rent and other operating expenses.

At June September 30, 2024, the Company had cash and cash equivalents of $0 $7,879 and negative working capital of $7,133,025.$10,049,951. Cash and cash equivalents decreased $34,006.$26,127. For the sixnine months ended JuneSeptember 30, 2024, $85,928 $95,026 was provided by operating activities and $116,067$10,337 and $3,867$110,816 was used by investing and financing activities, respectively.