Led by Significant Increase in Duramed
Adjusted EBITDA Loss Decreased by 25% to $2.1 Million
HICKSVILLE, NY – April 19, 2023 – Can B Corp. (OTCQB: CANB) (“Can B” or the “Company”), a health and wellness company specializing in developing, producing and selling hemp derived cannabinoid products, today announced the Company’s financial results for the twelve months ended December 31, 2022.
Key Financial Highlights for 2022
• Revenue increased 45% to $6.7 million.
• Gross profit decreased 13% to $2.6 million.
• Gross margin decreased to 39.1%, due to a higher revenue percentage mix from Duramed.
• Adjusted EBITDA loss decreased by 25% to $2.1 million.
• Accounts receivable at $6.6 million
• Inventory at $2.0 million
• Total assets at $15.6 million
• Total stockholders’ equity at $2.7 million
Key Business Highlights for 2022
• Solidified and integrated vertical processing capabilities
• Signed Manufacturing and Distribution Agreement for Superfood Products with Forever Brands and Brooke Burke via BB Body, Inc.
• Consolidated hemp processing operations from Florida and Tennessee to Colorado.
• Expanded CBD isolate production into new isomers in expanded Colorado lab.
• Expanded durable medical devices to include back support devices for Duramed division.
Corporate Debt Restructuring to Position for Uplisting to National Securities Exchange
Through the restructuring, Can B raised $1.55 million of new capital and extended previously due notes payable totaling $7.0 million to September 1, 2023, and December 31, 2024, to give the Company an additional window to deploy the capital from the new raise. A key component of the restructuring was the sale of $5.7 million of accounts receivable from Can B’s Duramed Inc. and Duramed MI, LLC divisions to fund payments on two promissory notes for $2.5 million and $1.5 million due to Can B Corp’s largest institutional investor.
Highlight Growth Opportunities
The implementation of the business plan across all three operating divisions will allow the Company to get on a more solid footing for future growth and expansion. Explicitly, some of the new working capital will be used for the installation of existing hemp processing equipment moved in the 4th quarter of 2022 during the consolidation of the Company’s Tennessee and Florida operations into Colorado. The new equipment should come online early in the 2nd quarter of 2023 to begin processing hemp biomass which the Company previously acquired and has in storage. Additionally, the Duramed Division will begin acquiring new medical devices to deploy through its doctor network in New York and Michigan. The white label division currently in the midst of a national roll-out of the Longevity by Brooke Burke Body needs additional processing capacity and will be receiving new equipment in its Lacy, WA operations.
Management Commentary
Marco Alfonsi, Can B’s Chief Executive Officer, stated, “2022 was a transition year for us, for as we increased revenue as expected and achieved record annual revenue of $6.7 million, we had to deal with consolidating business and integrating our acquisitions. We are pleased with the position of our business heading into the remainder of 2023.”
Alfonsi, concluded, “While we generated an all-time high in annual revenue, we were able to also reduce our cash burn as demonstrated by the 25% decrease in Adjusted EBITDA loss to $2.1 million. Our team made great strides over the past several months integrating and ramping up the various operations. We strategically acquired additional processing equipment to complete our vertical hemp processing capabilities from biomass to crude to distillate to isolate to isomers- all now located in our Colorado operation. We are executing on major strategic agreements, such as Pure Health Products’ deal with Brooke Burke Superfood, and are very excited about the demand and results thus far. As we look forward in 2023, we are enthusiastic regarding the growth opportunities and prospects for our business and are in position for an uplisting to a national securities exchange.”
Financial Results for the Twelve Months Ended December 31, 2022:
- Revenue: For the twelve months ended December 31, 2022, revenue was $6.7 million, an increase of $2.1 million, or 45%, compared with $4.6 million for the twelve months ended December 31, 2021. The increase is largely due to an increase in the Company’s Duramed division of $1.8 million due to surgical procedures and healthcare services which enabled the Company to continue to grow within the ultrasound device sales associated with patient recovery.
- Gross Profit: For the twelve months ended December 31, 2022, gross profit was $2.6 million, a decrease of $0.4 million, or 13%, compared with $3.0 million for the twelve months ended December 31, 2021. The resulting gross margin was 39.1%, compared with 65.0% for the twelve months ended December 31, 2021, due to higher revenue percentage mix from Duramed.
- Total Operating Expenses: For the twelve months ended December 31, 2022, total operating expenses were $16.8 million, an increase of $3.5 million, or 27%, compared with $13.3 million for the twelve months ended December 31, 2021. The increase in operating expenses was primarily due to the non-cash stock-based compensation expense of $7.2 million and $1.4 million of depreciation of property and equipment related to the acquisition of property and equipment via asset purchases.
- Operating Loss: For the twelve months ended December 31, 2022, operating loss was $14.2 million, an increase of $3.9 million, or 38%, compared with an operating loss of $10.3 million for the twelve months ended December 31, 2021. Contributing to the increase in operating loss was additional incurred costs to start the Company’s operations in Miami and Tennessee during the first quarter of 2022 and a decrease in the Company’s gross margin due to unforeseen integration issues at the Company’s operations in Miami and Tennessee resulting in the relocation and consolidation in Colorado.
- Adjusted EBITDA Loss: For the twelve months ended December 31, 2022, Adjusted EBITDA loss was $2.1 million, a decrease of $0.7 million, or 25%, compared with an Adjusted EBITDA loss of $2.8 million for the twelve months ended December 31, 2021, after deducting a total of $12.1 million in non-cash and one-time expenses, including $9.6 million non-cash stock based compensation, $1.4 million depreciation, $0.5 million amortization, $0.3 million impairment and $0.3 million loss on sale of property and equipment.
• Net Loss: For the twelve months ended December 31, 2022, net loss was $14.9 million, or ($4.18) per share, an increase of $2.8 million, or 23%, compared with a net loss of $1.2 million, or a net loss of ($9.06) per share, for the twelve months ended December 31, 2021. On a per share basis this loss is a 46% reduction over 2021.
About Can-B-Corp
Can-B-Corp (OTCQB: CANB) is a health & wellness company providing the highest quality hemp derived cannabinoid products, including under its own brands of Canbiola, Seven Chakras, NuWellness, Pure Leaf Oil and Duramed. Can-B utilizes multi-channel distribution to reach consumers, including medical facilities, doctor offices, retailers, online and direct. Can-B-Corp operates R&D and production facilities in Lacey, WA, and Florida.
To learn more about Can-B-Corp and our comprehensive line of high quality products, please visit: Canbiola.com and 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.
