Increases Demonstrating Scalability
and Leverage of the Business Gross Margin of 79%
HICKSVILLE, NY -- May 26, 2020 -- InvestorsHub NewsWire -- Can B
Corp. (OTCQB: CANB)
(“Can B” or the “Company”), a diversified health and wellness
company, announced today operating and financial results for the
first quarter ended March 31, 2020.
“I am pleased to report that we are off to an exceptional start
in 2020 and our business model is demonstrating its scalability and
leverage. For the first time since our inception, our revenue
growth has outpaced the increase in operating expenses. Combined
with our 79% gross margin, we are operating at our most efficient
rate ever. We expect continued growth of the business and our goal
is no less than profitability,” stated Marco Alfonsi, Can B’s Chief
Executive Officer.
Mr. Alfonsi continued, “On the corporate front, our name change
to Can B Corp. better reflects our position as a Health &
Wellness company providing the highest quality cannabidiol (CBD)
products as well as traditional wellness products. On the capital
markets side, our aggressive restructuring measures have greatly
improved our visibility and capabilities to access more favorable
sources of capital. Our outstanding share count is just over
3 million shares with a 1.4 million share public float which is
attractive to potential investors. The additional capital would
allow us to execute on our future growth strategies.”
Mr. Alfonsi concluded, “Our diversified product line has us
well-positioned to continue to increase market penetration. We have
a multi-channel distribution strategy for the LifeGuard™ line of
products bolstered by an exclusive license agreement. We also have
new products in development from our R&D group at Pure Health
Products in Lacey, WA, and recently acquired Green Grow Farms, a
licensed hemp grow and cultivation operation in New York. As
we continue to follow through on our initiatives in 2020 it is our
hope that our shareholders are equally excited to see our continued
growth come to fruition.”
Key Business Highlights for Q1 2020:
- Changed corporate name to Can B Corp.
- Restructured share structure to reflect 3 million I/O & 1.4
million Float
- Signed Exclusive License Agreement with LifeGuard Brands for
topicals
- Shipped a major white label CBD program with a multi-unit
retail chain
- Closed 100% Green Grow Farms acquisition
Key Financial Highlights for Q1 2020:
- Revenues increased by about 10% to $569,707
- Gross margin of nearly 79%
- Operating loss decreased by about 5% to $1,111,993, and
included $591,841 in non-cash stock-based compensation and
amortization of intangibles
- Adjusted operating loss of $520,152
Business Updates:
LifeGuard
In January, Can B signed an exclusive License Agreement with
Lifeguard Licensing Corp. for the use of the well-known LifeGuard
brand name and logo for a host of skincare and wellness products
that will include CBD and non-CBD formulations. This includes
topicals, beverages, and ingestible products as well as a full line
of sunscreens, lip balms, replenish supplements, and lifestyle
water. We have completed the 3D Design of the unique packaging of
our “Skin Preserver” Sun Block line, as well as our Lip Balm line.
The products are planned to launch in a value-add package with the
unique and identifiable LifeGuard rescue buoy with lanyard rope.
The Company is now moving forward to molds and manufacturing, and,
with a soon to be contracted manufacturer, we will be moving
quickly for the production of our initial SPF30 and SPF50 lines, as
well an after-sun moisturizer. We’re currently working to finalize
a manufacturer for our lip balm and lifestyle water line. Initial
product renderings may be viewed at www.shoplifeguard.com. At this
point due to the uncertainty of beach openings and permissible
outdoor gatherings, we are targeting a limited launch in Florida
and other southern states, and will have nationwide availability
online. This is planned to be followed by a national retail launch
in 2021.
Green Grow
Farms
In December 2019, the Company closed the previously announced
agreement for an all-stock transaction to acquire 51 % of Green
Grow Farms Inc. and acquired 100% in March. Green Grow Farms
Inc is licensed by New York State to grow hemp under the
Hemp Research Pilot Program; it grows industrial hemp for grain,
flower, and CBD. Green Grow Farms has successfully grown and
harvested 6 acres on two farms in Calverton, NY this year, yielding
in excess of 12,000 pounds of dried biomass. The current New York
inventory consists of Suver Haze and Sweetened varieties with CBD
content ranging from 13% to 16%.
Superfood
Pure Health Products LLC (“PHP”), a wholly-owned subsidiary of
Can B Corp located in Lacey, Washington, is an innovator in the
formulation and manufacturing of hemp-derived CBD products
containing no or only trace amounts of THC. PHP’s formulation and
manufacturing directly serve our full line of products including
tinctures, salves, and gels, as well as a private label service for
independent consumer brands. The Company is pleased to announce it
has experienced limited interruption during this challenging
COVID-19 pandemic. Although several Company customers have
experienced business shutdowns during the last few weeks, we are
pleased to announce many have resumed business via online ordering
and/or initiating new direct shipment orders. Additionally, the
Company has recently installed new state-of-the-art, high-speed,
automatic bottling and capping equipment and new bulk processing
equipment for the production of the Can B Superfood line, which is
now available at www.CanBSuperFood.com. This line
allows for full in-house formulation and production for our
high-quality Superfoods. We are also pleased to announce that with
our new equipment installations, Phase One of upgrading the
manufacturing capacity to triple the current capacity is complete.
Phase Two is well underway. Phase Two will allow the PHP facility
to become GMP compliant and pave the way for an anticipated growth
as the country evolves from this COVID-19 pandemic crisis. Phase
Two will also encompass the planned vertical integration of PHP as
we have just received our second batch of pure isolate from our
very own hemp production, Green Grow Farms, which will sustain our
production and sales for the months to come.
Financial Results for the
Three Months Ended March 31,
2020:
Revenue for the three months ended March 31, 2020
was $569,707, an increase of $52,547, or roughly 10%, compared to
$517,160 for the three months ended March 31, 2019. This increase
was mainly attributable due to the growth of CBD products and
durable equipment
sales.
Gross profit for the three months ended March 31,
2020 was $448,158, an increase of $193,551, or roughly 76%,
compared to $254,607 for the three months ended March 31, 2019. The
resulting gross margin was 78.7% for the three months ended March
31, 2020, compared to 49.2% for the three months ended March 31,
2019. Absolute gross profit and gross margin increased due to the
growth of product sales and outreach into additional market
segments such as wholesale and private label
opportunities.
Operating expenses for the three months ended March
31, 2020 were $1,560,151, an increase of $133,476, or roughly 9%,
compared to $1,426,675 for the three months ended March 31, 2019.
Of note, the revenue increase of 10% was greater than the operating
expense increase of 9%, starting to demonstrate the scalability and
operating leverage of the business. Operating expenses for the
three months ended March 31, 2020, included non-cash expenses
resulting from stock-based compensation for employees and
consultants of $461,875 and amortization of intangible assets of
$129,966, compared to $830,196 and $2,194 for the three months
ended March 31, 2019.
Operating loss for the three months ended March 31,
2020 was $1,111,993, a decrease of $60,075, or roughly 5%, compared
to $1,172,068 for the three months ended March 31,
2019.
Adjusted operating loss for the three months ended
March 31, 2020, was $520,152, an increase of $180,474, or roughly
53%, compared to $339,678 for the three months ended March 31,
2019. Adjusted operating loss does not include non-cash stock-based
compensation and amortization of intangible
assets.
Net loss for the three months ended March 31, 2020
was $1,134,107, a decrease of $38,407, or roughly 3%, compared to
$1,172,514 for the three months ended March 31, 2019. The resulting
EPS loss for the three months ended March 31, 2020 was a ($0.33),
as compared to an EPS loss of ($0.48) for the three months ended
March 31, 2019.
About Can B
Corp.
Can B Corp. (OTCQB:CANB)
is a Health & Wellness company providing the highest quality
cannabidiol (CBD) products under the brands of Canbiola, Seven
Chakras, Nu Wellness, Pure Leaf Oil and Duramed. Can B utilizes
multi-channel distribution to reach consumers, including medical
facilities, doctor offices, and online and direct retailers. Can B
is also an exclusive partner of the LifeGuard™ Licensing
Brand in developing a line of consumer products. The Company is
also launching Super Foods, a line of nutritional supplements. Can
B Corp. owns and operates an R&D and production facility in
Lacey, WA and Green Grow Farms, a licensed hemp grower and
cultivator in New York. To learn more about Can B Corp. and our
comprehensive line of high quality CBD products, please
visit: Canbiola.com and www.CanBCorp.com, follow Can B Corp
on Instagram and Facebook or visit one of the 1,000+ retail outlets that
carry Can B Corp.
products.
For more information about Can B Corp., please
visit: CanBCorp.com
Twitter
@CanBCorp[
Instagram
@canbcorp
Facebook @ Can B
Corp
Forward-Looking
Statements
Forward-looking statements and risks and
uncertainties discussed in this letter contain forward-looking
statements. The words "anticipate," "believe," "estimate," "may,"
"intend," "expect," and similar expressions identify such
forward-looking statements. Expected, actual results, performance,
or achievements could differ materially from those contemplated,
expressed, or implied by the forward-looking statements contained
herein. Forward-looking statements are subject to a number of risks
and uncertainties, including but not limited to, risks and
uncertainties associated with, among other things, the impact of
economic, competitive, and other factors affecting our operations,
markets, products, and performance. The matters discussed herein
should not be construed in any way, shape or manner of our future
financial condition or stock
price.
Investors and
Media:
IR@canbiola.com
(646)
397-2309
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