CANB CAN B Corporation (QB)

Item 1.01 Entry into a Material Definitive Agreement

Membership Purchase Agreement

On December 28, 2018, Canbiola, Inc. (the “Company”) entered into a Membership Purchase Agreement (the “Purchase Agreement”) with Pure Health Partners, LLC (“PHP”). Pursuant to the Purchase Agreement, the Company purchased all of the shares of PHP in exchange for cancellation of a promissory note owed by PHP to the Company in the amount of $83,825 (the “Note”) and the issuance of 3,096,827 shares of the Company’s common stock (the “Purchase Shares”) to the members of PHP (the “PHP Members”). Furthermore, pursuant to the Purchase Agreement, the Company agreed to appoint Pasquale Ferro (“Ferro”) as President of PHP. As a result of the aforementioned transactions, PHP became a wholly-owned subsidiary of the Company. The Purchase Agreement otherwise contains standard terms and conditions.

Employment Agreement

On December 28, 2018, the Company entered into an Employment Agreement (the “Employment Agreement”) with Ferro and PHP, pursuant to which Ferro agreed to serve as President of PHP for an initial term of four (4) years. The term of the Employment Agreement will automatically be renewed for consecutive three (3) year terms unless otherwise terminated by the parties. Ferro will earn a base salary of $15,000 per month (the “Base Salary”), with annual increases by the greater of three percent (3%) or the prior year-end annual percentage increase in EBITDA as reported in the Company’s 10-K filing. Ferro will also be entitled to (i) receive annual incentive bonuses in cash and/or stock, (ii) participate in any welfare, health and life insurance and pension benefit and incentive programs as may be adopted from time to time by PHP, and (iii) receive four (4) weeks paid vacation time each year and five (5) paid days for illness each year. Ferro’s above-mentioned compensation and benefits are guaranteed by the Company. Furthermore, pursuant to the Employment Agreement, the Company agreed to issue five (5) of the Company’s Series A Preferred Stock upon execution of this Agreement, which shall be considered fully earned upon issuance, which shall be one and one-quarter Series A Preferred share at December 31, 2018, 2019, 2020, and 2021 and may be convertible at one-quarter (1/4) of a Series A Preferred share or twelve million five hundred thousand (12,500,000) shares of common stock each year-end commencing December 31, 2018, for the initial four (4) years of the Employment Agreement. PHP also agreed to indemnify Ferro to the extent permitted by its governing documents except for acts constituting negligence or willful misconduct and the Company guaranteed PHP’s indemnification.

If the Employment Agreement is terminated by PHP without cause, Ferro will be entitled to continue to receive his Base Salary through the longer of the end of the Employment Agreement’s term over the course of the then remaining Term plus 12 months, plus an amount equal to the premiums charged by PHP to maintain COBRA benefits continuation coverage for Ferro and his eligible dependents, to the extent such coverage is then in place. Furthermore, PHP will pay any accrued obligations to Ferro as lump sum within 30 days of his termination without cause. The Company has guaranteed PHP’s foregoing obligations. The Employment Agreement otherwise contains standard terms and conditions.

The foregoing discussion is for summary purposes only and is qualified in its entirety by the actual terms of the Purchase Agreement and Employment Agreement, both of which are included herewith as Exhibits.

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