CANB CAN B Corporation (QB)

Item 1.01 Entry into a Material Definitive Agreement.

Securities Purchase Documents

On June 9, 2022, Can B Corp., a Florida corporation (the “Company”) entered into a definitive agreement (the “Agreement”) with an investor (“Investor”) for the sale of a promissory note (“Note”) and warrants (“Warrants”) to Investor for total consideration of $56,250.

The Note is in the principal amount of $62,500 with an original issue discount of 10%. The Note is convertible into common stock of the Company at a price per share of $4.00, subject to adjustment pursuant to the terms of the Note. The Note bears interest at the rate of 12% per year, which increases to 16% per year in the event of default. The Company has agreed to pay $500 to Investor for each conversion under the Note to cover its expenses related thereto. The Company has agreed to reserve at least two times the number of shares convertible under the Note at all times and has entered into an irrevocable letter agreement with its transfer agent to issue Investor shares resulting from its conversion of the Note and exercise of Warrants. In the event that the Company issues common stock or securities convertible into common stock at a price per share less than the conversion price under the Note, the Note’s conversion price will be decreased to match such dilutive issuance; provided that, in the event a dilutive issuance occurs in the first 180 days after Note issuance, such adjustment will not be applied until the date 180 days after the Note is issued. The Note contains similar most favored nations terms where the adjustments will take place, if any, no sooner than 180 days after the Note is issued. The Company may prepay the Note subject to a 10% prepayment penalty and shall repay all of the Note in the event its current S-1 offering, as amended, is declared effective by the Securities and Exchange Commission (“SEC”) and shall repay at least 50% of the Note in the event of an alternative financing occurring after the company has raised at least $1,250,000 in bridge financing. The Company has agreed to offer Investor the first right to participate in future financings. The Note otherwise contains default and other restrictive terms typical of debt finance deals of this nature. The Note may be accelerated upon an event of default.

In conjunction with the issuance of the Note to Investor, the Company also issued Investor Warrants to purchase 9,766 shares of common stock at a price per share of $6.40. However, if within 180 days after the Warrant issuance the Company’s current S-1 offering, as amended, is declared effective by the SEC, the exercise price will be adjusted to 120% of the offering price per unit or share offered. The Company has agreed to register the common stock issuable upon exercise of the Warrant with the SEC pursuant to a registration rights agreement. If the shares are not so registered within 180 days from Warrant issuance, the Warrant shall have a cashless exercise feature. No fractional shares will be issued upon exercise of any portion of the Warrant. There are penalties to the Company in the event it does not timely issue shares upon exercise of the Warrant. The Warrant has anti-dilution terms similar to the Warrant, except that if the Company’s current S-1 offering, as amended, is declared effective by the SEC and the Note is paid in full, the exercise price shall never be adjusted due to a dilutive issuance.

In addition to the foregoing, the Company has agreed to pay $5,000 in Investor’s legal fees and to grant Investor piggyback registration rights requiring the Company to register all common shares held by Investor resulting from conversion of the Note or exercise of the Warrants in the event it files a registration statement with the SEC, excluding certain types of registration statements where such piggyback rights would not apply. Otherwise, the Note, Warrants, registration rights agreement and Agreement contain covenants, representations and warranties typical of transactions of this type. All such agreements are governed by Delaware law.

The foregoing descriptions of definitive agreements are qualified in their entirety by the terms of the full text of the agreements, respectively, attached hereto as exhibits.