Attached files
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| EX-99.1 - PRESS RELEASE - Exactus, Inc. | ex99-1.htm |
| EX-10.2 - AGREEMENT - Exactus, Inc. | ex10-2.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of
Report (Date of earliest event reported): January 22,
2021
EXACTUS, INC.
(Exact
name of the registrant as specified in its charter)
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Nevada
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000-55828
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27-1085858
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(State
or other jurisdiction of
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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80 NE 4th Avenue, Suite 28, Delray Beach, FL 33483
(Address
of principle executive offices) (Zip code)
Registrant’s
telephone number, including area code: (561) 455-4822
_____________________________________________________________________
(Former
name or address if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the Registrant
under any of the following provisions (see General Instruction A.2
below):
[
] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425).
[
] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12).
[
] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b)).
[
] Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c)).
Securities
registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading symbol(s)
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Name of exchange on which registered
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N/A
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N/A
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N/A
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Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of
1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01
Entry
Into a Material Definitive Agreement
Ceed2Med, LLC
On
January 22, 2021, we entered into a Settlement and Release
Agreement (the “Agreement”) with Ceed2Med, LLC
(“C2M”), a former affiliate of the company. Over the
course of 2018-2019 we had entered into a series of agreements for
product and funding with C2M in connection with our seed-to-sale
strategy for our hemp-derived CBD business, to secure farming
rights and expertise, and to secure product, distribution and
funding. We previously issued 10,000 shares of our Series E
Preferred Stock convertible into 6,250,000 shares of common stock
to C2M. Pursuant to the Agreement, C2M will permit us to transfer
all outstanding shares of Series E Preferred stock to settle
various third-party claims and obligations, avoiding dilution in
furtherance of our ongoing restructuring efforts. Under the
Agreement, all existing agreements, obligations and claims have
been cancelled and rescinded, we exchanged full mutual releases and
we will receive a cash payment of $200,000 on or before February 5,
2021.
The
foregoing description is a summary of the material terms of the
Agreement, which is filed herewith as Exhibit 10.1. The Agreement
contains additional terms, covenants, and conditions and should be
reviewed in its entirety for additional information
Dr. Krassen Dimitrov, Digital Diagnostics, Inc., and KD Innovation
Ltd.
On
January 22, 2021, we settled all outstanding claims and obligations
to Dr. Krassen Dimitrov, a former director, Digital Diagnostics,
Inc., and KD Innovation Ltd. as previously described under Item 13.
Certain Relationships and Related Transactions, and Director
Independence in our Annual Report on Form 10K for the fiscal year
ended December 31, 2020. Previously, we had recorded an obligation
on our balance sheet of $575,000 for claims asserted against us.
The terms of the settlement are confidential, other than no cash
was paid in connection with the settlement. As a result, we expect
to eliminate $575,000 of indebtedness from our financial statements
during the quarter ended March 31, 2021.
SECTION 3 – SECURITIES AND TRADING MARKETS
Item
3.02
Unregistered
Sales of Equity Securities
On
January 22, 2021, our board of directors authorized the issuance of
up to approximately 25,000,000 shares common stock in settlement of
approximately $1,250,000 in outstanding liabilities and accounts
payable owed to 11 persons. Such amount and number of shares is
inclusive of a payment to C2M and under the Krassen Settlement
described in Item 1.01 above.
On
January 22, 2021, our board of directors approved private offers to
be made through January 31, 2021, subject to extension, to holders
of our Series A, Series B-1 and Series B-2 preferred stock with
inducements to voluntarily convert preferred shares into our common
stock with full general releases of all claims against the company.
Holders of Series A Preferred Stock may exchange their shares at a
conversion price of $0.025 per share. Holders of our Series B-1 and
Series B-2 Preferred Stock may exchange their shares at a
conversion price equal to .25 shares of common stock for each share
of preferred stock exchanged. There
were 323,019 shares of Series A, 1,650,000 shares of Series B-1 and
7,516,000 shares of Series B-2 preferred stock outstanding as of
September 30, 2020. Outstanding shares of Series B-1 and Series B-2
convertible stock were convertible into 206,250 shares of common
stock and 939,500 shares of common stock, respectively, as of
December 31, 2019 at the original conversion rate of .125 shares of
common stock for each share of preferred stock.
We
agreed to permit transfer of Series E Preferred Stock and
conversion into 6,250,000 shares of common stock ($1.60 per share)
and issue 8,000,000 shares of our restricted common stock in
connection with the settlement with C2M as described in Item 1.01
above.
The foregoing issuances do not involve any public offering
and are exempt from registration pursuant to Section 4(a)(2) of the
Securities Act of 1933, as amended.
SECTION 5 – CORPORATE GOVERNANCE AND MANAGEMENT
Item
5.02
Departure
of Directors or Certain Officers; Election of Directors;
Appointment of CertainOfficers; Compensatory Arrangements of
Certain Officers
Appointment of Larry Wert as Executive Chairman
On
January 22, 2021, Larry Wert was appointed to the position of
Executive Chairman of our Board of Directors. Mr. Wert has
served as a member of our Board of
Directors since April 29, 2020. Mr. Wert has over 40 years in broadcasting. He served as
the President of Broadcast Media for Tribune Media Company from
2013 ( post bankruptcy ) through September of 2019 ( $4.8 billion
sale to NEXSTAR Media.)
He was responsible for
overseeing the strategy and day-to-day activities of Tribune Media
Company’s forty-two owned or operated television stations,
their related websites, digital properties and helped
navigate TRCO M&A. Wert
previously served on the NAB TV Board of Directors, Fox Board and
the CBS Board of Governors. Prior to his time at Tribune Media, Mr. Wert
served from 1998 until 2013 as the President and General Manager of
WMAQ-TV, and other leadership roles at NBC Universal.
Mr. Wert started his career at
Leo Burnett Advertising in Chicago in 1978, and moved on to
television sales with ABC TV. In 1989, Mr. Wert shifted to radio as
president and general manager of WLUP-97.9 FM and AM 1000 in
Chicago, better known as “The Loop.” In 1996, he was
named president of Evergreen Media. When it merged with Chancellor
Broadcasting he became senior vice president of Chancellor,
which was sold to Clear Channel in 1999 for $4.4 billion.
Wert now serves on a variety of boards, and advisory roles in
liquor, home healthcare, gaming, original content and other
technology.
Strategic Alternatives Committee
On
January 22, 2021, our Board of Directors formed a Strategic
Alternatives Committee, for the purpose of evaluating potential
acquisitions, mergers, and other strategic business combinations
for the company. The new committee consists of Directors Larry Wert
and Julian Pittam, with Mr. Wert serving as its
chairman.
Issuance of Stock Options to Key Executives and
Directors
On
January 22, 2021, our Board of Directors approved the issuance of
two-year options to purchase common stock. All such options may be
exercised on a cash or cashless basis at any time prior to the
company entering into an acquisition with a minimum value of
$5,000,000 and shall be automatically exercised on a cashless
“net exercise” basis immediately prior to closing of
such acquisition. In addition, options issued to Mr. Alberttis are
subject to further vesting conditions which require he continue to
be employed at the time of any acquisition in excess of $5,000,000
(50%) provided he agrees to a separation agreement in which he
voluntarily resigns from all positions with the company and
executes a release with confidentiality and non-disparagement
provisions, and additionally if no acquisition is closed on or
prior to the due date for the company’s annual report on Form
10K for the fiscal year ended December 31, 2021 he shall have
timely filed and executed all certifications required for such
filing (50%). Options issued to Mr. Johnson vest 50% on the date of
issuance and 50% upon closing of an acquisition with a value of
$5,000,000 provided he agrees to a separation agreement in which he
voluntarily resigns from all positions with the company and
executes a release with confidentiality and non-disparagement
provisions.
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Larry
Wert
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Director,
Executive Chairman, Strategic Advisory Committee Chair
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Options
to purchase 3,500,000 shares of common stock at $0.025 per
share
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Julian
Pittam
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Director,
Strategic Advisory Committee
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Options
to purchase 1,500,000 shares of common stock at $0.025 per
share
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Daniel
Alberttis
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COO
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Options
to purchase 2,500,000 shares of common stock at $0.025 per share,
subject to vesting
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Andrew
Johnson
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Chief
Strategy Officer
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Options
to purchase 3,500,000 shares of common stock at $0.025 per
share
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Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change
in Fiscal Year.
As more
fully described in Item 1.01 and Item 3.02 above, upon conversion
of our Series A, Series B-1, Series B-2 and 18 shares of our Series
D Preferred Stock expected to be converted we expect to file a
Certificate of Cancellation with the Secretary of State of the
State of Nevada eliminating such series from our authorized series
of preferred stock.
On
January 22, 2021, our Board of Directors authorized a possible
reverse split of our common stock at a ratio of between 1 share for
every 40 shares held and 1 share for every 50 shares held, to be
determined in the further discretion of the Board. The reverse
split is subject to approval by our shareholders unless the number
of authorized shares of our capital stock is reduced
proportionately in accordance with Nevada law, and may be
authorized, if at all, in connection with a recapitalization
required in connection with an acquisition or similar event. The
timing of shareholder approval, whether the reverse split will
ultimately be approved by our shareholders, and the ratio is
currently unknown.
Item 7.01
Regulation FD Disclosure.
On
January 25, 2021, we released the
press release furnished herewith as Exhibit 99.1. The Company also
reiterated that it is exploring strategic alternatives which could
include one or more mergers or acquisitions in related or unrelated
businesses, asset disposals, and refinancings.
Section 9 – FINANCIAL STATEMENTS AND EXHIBITS
Item
9.01
Financial
Statements and Exhibits
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Exhibit No.
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Description
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10.1
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Settlement
and Release Agreement with Ceed2Med, LLC(1)
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Agreement
(redacted) with Dr. Krassen Dimitrov, Digital Diagnostics, Inc. and
KD Innovation, Ltd. (2)
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Press
Release dated January 25, 2021
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(1)
This Exhibit will
be filed as an Exhibit to our Annual Report on Form 10-K for the
fiscal year ended December 31, 2020.
(2)
Portions of this
Exhibit have been redacted
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on behalf of the
undersigned hereunto duly authorized.
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EXACTUS,
INC.
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Date:
January 27, 2021
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By:
/s/ Alvaro Daniel
Alberttis
Alvaro
Daniel Alberttis
Principal
Executive Officer
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