Attached files
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): June 28,
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: (509) 999-9695
_____________________________________________________________________
(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. ☐
SECTION 3 – SECURITIES AND TRADING MARKETS
Item
3.02 Unregistered Sales of Equity Securities.
During
the first and second quarter of 2021 we resolved numerous claims
and lawsuits against the Company. As a result, we agreed to issue a
total of approximately 2,959,616 shares of our restricted common
stock, par value $0.001 per share (“Common Stock”) in
connection with previously unpaid employee compensation and claims
asserted by various vendors and consultants, as more fully
described in Item 7.01. 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.
After
giving effect to the issuances described above, and the conversion
of shares of our preferred stock (without regard to the beneficial
ownership blockers of our Series A Preferred Stock outstanding), a
total of 145,654,137 shares of our Common Stock will be issued and
outstanding, on a fully-diluted basis. As of the date of this
Agreement, 450 shares of our Series A Preferred Stock and 1,500,000
shares of our Series B-1 Preferred Stock and 6,000,000 shares of
our Series B-2 Preferred Stock are issued and outstanding which are
exercisable for our Common Stock. 9,000,000 shares of our Common
Stock may be issued upon conversion of our Series A Preferred Stock
outstanding, 187,000 shares of our Common Stock may be issued upon
conversion of our Series B-1 Preferred Stock outstanding, and
750,000 shares of our Common Stock may be issued upon conversion of
our Series B-2 Preferred Stock outstanding.
Item
5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On June
28, 2021, Lawrence Wert, our Executive Chairman, and Andrew
Johnson, our Chief Strategy Officer were appointed the Principal
Executive Officer and Principal Accounting Officer, respectively,
of the Company. On June 26, 2021, Daniel Alberttis resigned as the
Company’s Chief Operating Officer and Director and John Price
resigned as the Company’s Chief Financial Officer and
Director. Mr. Price was chairman of our Audit Committee and a
member of our Compensation and Governance Committee. The
resignations were not a result of any disagreement between the
Company on any matter relating to the Compay’s operations,
policies or practices. Effective with the resignation the size of
our Board of Directors (“Board”) is two directors
consisting of Mr. Wert and Julian Pittam. Mr. Wert and Mr. Johnson
were awarded 1,000,000 and 100,000 five-year options, respectively,
under the 2021 Plan subject to approval of the 2021 Plan by
shareholders vesting 50% upon issuance and 50% upon the
satisfaction of certain conditions.
2021 Plan
On June
28, 2021, the Board approved and adopted, subject to shareholder
approval on or prior to June 28, 2022, the Company’s 2021
Equity Incentive Plan (the “2021 Plan”).
The
2021 Plan authorizes the issuance of up to an aggregate maximum of
20% of the issued and outstanding shares of the Common Stock after
giving effect to future anticipated issuances, subject to
adjustment as described in the 2021 Plan. The 2021 Plan shall be
administered by the Board or a committee appointed by the Board
(the “Committee”), which shall consist of two or more
directors who qualify as (i) “Independent Directors”
(as such term is defined under the rules of the NASDAQ Stock
Market), and (ii) “Non-Employee Directors” (as such
term is defined in Rule 16b-3 of the Securities Exchange Act of
1934, as amended). The Committee, in its discretion, selects the
individuals to whom awards may be granted, the time or times at
which such awards are granted, and the terms of such awards. The
2021 Plan authorizes the Company to grant stock options, restricted
stock, preferred stock, other stock based awards, and performance
awards. Awards may be granted to the Company’s directors,
officers, consultants, advisors and employees. Unless earlier
terminated by the Board, the 2021 Plan will terminate, and no
further awards may be granted, after June 27, 2031.
Item
5.03 Amendments to Articles of Incorporation or Bylaws; Change in
Fiscal Year.
Reverse Split
On June
26, 2021, the Board authorized the Company to file a certificate of
amendment (the “Amendment”) to its Amended and Restated
Articles of Incorporation with the Secretary of State of the State
of Nevada in order to effectuate a reverse stock split of the
Company’s issued and outstanding common stock, par value
$0.001 per share on a one (1) for twenty-eight (28) basis (the
“Reverse Stock Split”).
The
Reverse Stock Split will be effective with the Financial Industry
Regulatory Authority (“FINRA”) upon notification from
FINRA and the Company’s Common Stock is expected to
thereafter trade with a “D” added, under the symbol
“EXDID” or other symbol, for the 20 business days
following approval to designate that it is trading on a
post-reverse split basis. The Company will file an additional
Current Report on Form 8-K and issue a press release upon
notification of the trading dates by FINRA and will have a new
CUSIP number together with an amendment to its Articles of
Incorporation with the State of Nevada upon effectiveness by
FINRA.
As a
result of the Reverse Stock Split, every twenty-eight (28) shares
of the Company’s pre-reverse split Common Stock will be
combined and reclassified into one share of the Company’s
Common Stock. No fractional shares of Common Stock will be issued
as a result of the Reverse Stock Split. Shareholders who otherwise
would be entitled to a fractional share shall receive the next
higher number of whole shares.
As
previously disclosed on our Current Report on Form 8-K filed on
April 6, 2021, on March 31, 2021, shareholders of record holding a
majority of the outstanding voting capital of the Company approved
a reverse stock split of the Company’s issued and outstanding
common stock by a ratio of not less than one-for-twenty-five and
not more than one-for-one-hundred at any time prior to December 31,
2021, with such ratio to be determined by the Company’s Board
of Directors, in its sole discretion. The Reverse Stock Split ratio
of one (1) for twenty-eight (28) basis was approved by the
Company’s Board of Directors on June 28, 2021.
Amended Articles and Bylaws
On June
26, 2021, the Board approved an amendment to the Company’s
Articles of Incorporation (“Articles Amendment”) and
submission of the Articles Amendment to the shareholders of the
Company for approval, and an amendment to the Company’s
bylaws (the “Bylaw Amendment”).
The
Articles Amendment, which is subject to shareholder approval and
filing with the State of Nevada, generally updates Article VII
“Indemnity” to provide indemnification for directors,
officers, employees and agents of the Company serving at the
request of the Company or another entity.
The
Bylaw Amendment, which is immediately
effective upon approval by the Board, generally provides various
procedures and requirements for Special Meetings of shareholders,
sets the quorum for meetings of shareholders for the transaction of
any business to one-third (1/3) of the outstanding shares of stock
entitled to vote, establishes procedures for action by written
consent and establishing a record date for voting by written
consent, establishes certain advance notice requirements for
shareholder proposals, provides for discretionary and mandatory
indemnification of directors, officers, employees and agents of the
Company and establishes the State of New York as the sole and
exclusive forum for certain disputes and litigation, including any
derivative action, an action claiming breach of fiduciary duty, any
action asserting a claim arising under the Nevada Revised Statues,
the Articles of Incorporation of the Bylaws, and under any
“internal affairs” doctrine.
The
foregoing descriptions of the Articles Amendment and Bylaw
Amendment do not purport to be complete and are qualified in their
entirety by reference to the complete text of the Articles
Amendment and Bylaw Amendment which shall be filed prior to the due
date for the Company’s next quarterly report on Form 10-Q in
accordance with the Rules and Regulations of the SEC.
SECTION 7 - REGULATION FD
Item 7.01 Regulation FD Disclosure.
Two
pending lawsuits against the Company have been settled and
dismissed: (1) Case No. 2021-011761 CA 01 pending in Miami-Dade
County, Florida; and (2) Case No. 50-2021 CA 000853 MB pending in
Palm Beach County, Florida. The terms of the settlements are
required to be kept confidential.
SECTION 8 – OTHER EVENTS
Item 8.01 Other Events.
On June
28,2021 the Board established three new series of preferred stock
(“Preferred Stock”) designated as Series C Convertible
Preferred Stock, Series C-1 Convertible
Preferred Stock and Series D Convertible
Preferred Stock and authorized the filing of a Certificate of
Designation of Preferences, Rights and Limitations of Series C
Convertible Preferred Stock, Series C-1 Convertible Preferred Stock
and Series C-2 Convertible Preferred Stock in the State of Nevada.
The Board designated for issuance 1,000,000, 10,000 and 10,000
shares, respectively, for issuance. Each share of Preferred Stock
is convertible into shares of the Company’s Common Stock as
provided in the Certificate of Designation therefore. No shares of
Preferred Stock have been issued as of the date of this Current
Report on Form 8-K.
The Company
estimates approximately $585,000 of previously reported liabilities
and potential payments were eliminated or settled during the second
quarter of 2021 upon the payment of approximately $115,000 cash and
agreement to issue shares of Common Stock, including approximately
$335,000 previously reported as “Accounts Payable”,
$250,000 previously reported as “Subscription Payable”
relating to the acquisition of Green Goddess Extracts, LLC and
$88,000 to a third-party vendor related to our prior Interim Chief
Executive Officer. In addition, during
most of 2020 we were engaged in marketing of hemp derived products
sourced from our leased farming operations. Through our
majority-owned subsidiary, Exactus One World, LLC
(“EOW”) we held one-year leases for approximately 200
acres of farmland in southwest Oregon for growing hemp. Our initial
efforts to pursue agricultural development, including farm soil
preparation, planting, harvesting, transportation and drying, were
situated at farms from which we shipped hemp biomass to third
parties for processing. Due to a rapid decline in commodity prices
for industrial hemp experienced during 2020 we suspended all
farming operations during 2020, and entered into a supply agreement
with Hemptown USA, Inc. to provide us with industrial hemp.
During the second quarter of 2021, the Company secured confirmation
from the managers of EOW that the leases terminated on or about
February 2020. Accordingly, the Company does not believe it is
required to account for future leasing obligations following the
termination of such leases and expects to seek to eliminate various
accrued lease obligations from future financial reports and filings
with the SEC, subject to confirmation from our
auditors.
The
foregoing description of the Series C Convertible Preferred Stock,
Series C-1 Convertible Preferred Stock and Series D Convertible
Preferred Stock does not purport to be complete and is qualified in
its entirety by reference to the complete text of the Certificates
of Designation of Preferences, Rights and Limitations, which are
filed as Exhibit 3.1, 3.2 and 3.3 hereto and which is incorporated
herein by reference.
Our Quarterly
Report for the quarter ended March 31, 2021 filed with the SEC
incorrectly reported the number of shares of our Series A Preferred
Stock authorized and outstanding. As previously reported in our
Current Report on Form 8-K filed with the SEC on
February 18, 2021, on February 16, 2021 we authorized 1,000 shares
of a new 0% Series A Convertible Preferred Stock with a stated
value of $1,000 per share and a conversion price of $0.05 per share
and issued 500 shares to an institutional
investor.
ITEM
9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d)
Exhibits.
The
exhibit listed in the following Exhibit Index is furnished as part
of this Current Report on Form 8-K.
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Exhibit No.
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Description
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Certificate of Designation of Preferences, Rights and Limitations
of Series C Convertible Preferred Stock.
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Certificate of Designation of Preferences, Rights and Limitations
of Series C-1 Convertible Preferred Stock.
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Certificate of Designation of Preferences, Rights and Limitations
of Series D Convertible Preferred Stock.
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2021 Executive Incentive Plan.
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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:
June 28, 2021
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By:
/s/ Lawrence
Wert
Name:
Lawrence Wert
Title:
Principal Executive Officer
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