Panacea Life Sciences Holdings, Inc 8-K, filed Jul 2, 2020
Panacea Life Sciences Holdings, Inc. (PLSH)
8-K
2020-07-02
For: 2020-07-01
View Original
Added on
April 06, 2026
About this 8-K
Panacea Life Sciences Holdings, Inc filed this 8-K on July 2, 2020, reporting on events of July 1, 2020.
Items reported
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
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): July 1, 2020
EXACTUS, INC.
(Exact
name of the registrant as specified in its charter)
|
Nevada
|
000-55828
|
27-1085858
|
|
(State or other jurisdiction
of
|
(Commission
|
(IRS Employer
|
|
of
incorporation)
|
File
Number)
|
Identification
No.)
|
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)).
Indicate
by check mark whether the registrant is an emerging growth company
as defined in 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 7 - REGULATION FD
Item 7.01 Regulation FD Disclosure
On July 1, 2020, we released the press release furnished herewith
as Exhibit 99.1. Also on July 1, 2020, we held a public conference
call for discussion of our first quarter financial results and
other matters. A transcript of the conference call is furnished
herewith as Exhibit 99.2.
Section 9 – FINANCIAL STATEMENTS AND EXHIBITS
Item
9.01 Financial Statements and Exhibits
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.
|
|
EXACTUS, INC.
|
|
Date:
July 1, 2020
|
By: /s/ Kenneth
Puzder
Kenneth
PuzderChief Financial
Officer
|
Exhibit 99.1
Exactus, Inc. Reports First Quarter 2020 Financial
Results
First Quarter 2020 Highlights
●
Total
Net Revenue of $836,000
●
Continuation
of Sales & Marketing Buildout
●
Restructuring
of Company and Board of Directors
●
Began
Biomass Inventory Extraction Process
●
During
Q2 2020, The Company Received PPP Funds and an SBA
Loan
DELRAY BEACH, FL / July 1, 2020 / - Exactus, Inc. (OTCQB: EXDI) (the
“Company”) a leading supplier of hemp-derived
ingredients (CBD/CBG) and feminized hemp genetics,
today
reported financial results for the first quarter
2020.
During the first quarter of 2020, Exactus is pleased it has
reported record revenue as its investment into sales and marketing
has begun
to generate
revenue and scale. The Company has significantly cut its monthly
cash burn and has shifted its focus to rapidly
generate revenue through bulk specialty ingredient sales. Moving
into the second half of the year, the Company will begin receiving
its inventory from its processors, and margins will expand
considerably.
Emiliano Aloi, Interim CEO of Exactus stated, "2020 marked a new
beginning for Exactus. We are honored to have attracted some
incredible new additions to our board of directors with significant
banking, media, and technology backgrounds that are fully aligned
with our M&A and organic growth strategies. In addition,
Derek's valuable work in restructuring our commercial and supply
chain strategies have proven successful as we have seen our
revenues grow and overall spending decrease
significantly."
“Considering the market conditions surrounding COVID-19, we
are pleased to have made significant progress
building the infrastructure of our sales and
marketing division to scale in this rapidly evolving
industry,” said Derek
Du Chesne, President, Exactus. “As we continue to stay ahead
of this ever-changing landscape, I believe that Exactus is uniquely
positioned for longevity and success. It is a pivotal time in this
industry and as our business grows, we are looking forward to
opportunities in high-value mergers and acquisitions to consolidate
processing and brands under the Exactus
umbrella.”
First Quarter 2020 Financial Summary
Revenue for the first quarter 2020 was $836,000 versus $15,980 in
the prior year. The increase in revenue was primarily attributable to the build out of sales
and marketing. Net loss for the
quarter was -$2,945,503 versus -$1,409,867 million in the prior
year. The net loss for the first quarter 2020 was due, primarily,
to non-cash expenses for stock-based
compensation.
Conference Call
Management will hold a conference call on Wednesday, July 1, 2020
at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss its
first quarter 2020 results and its business outlook. To access this
call, dial 1-877-451-6152 (domestic) or 1-201-389-0879
(international). The conference ID is 13706484.
Following the conference call, a replay will be available at
1-844-512-2921 (domestic) or 1-412-317-6671 (international). The
replay passcode is 13706484.
The conference call will be broadcast and available for replay on
the investor relations section of the Exactus’ website and
at http://public.viavid.com/index.php?id=140584.
To learn more about Exactus, Inc., visit the website at
www.exactushemp.com.
# # #
About Exactus:
Exactus Inc. (OTCQB:EXDI) is a leading producer and supplier of
hemp-derived ingredients and feminized hemp genetics. Exactus is
committed to creating a positive impact on society and the
environment promoting sustainable agricultural practices. Exactus
specializes in hemp-derived ingredients (CBD/CBG/CBC/CBN) and
feminized seeds that meet the highest standards of quality and
traceability. Through research and development, the Company
continues to stay ahead of market trends and regulations.
Exactus is at the forefront of product development for the
beverage, food, pets, cosmetics, wellness, and pharmaceutical
industries.
For more information about Exactus: www.exactusinc.com.
Investor Notice:
Investing in our securities involves a high degree of risk. Before
making an investment decision, you should carefully consider the
risks, uncertainties and forward-looking statements described under
"Risk Factors" in Item 1A of our most recent Form 10-K for the
fiscal year ended December 31, 2019 filed with the Securities and
Exchange Commission (the "SEC") on May 22, 2020, and in other
periodic and current reports we file with the SEC. If any of these
risks were to occur, our business, financial condition, or results
of operations would likely suffer. In that event, the value of our
securities could decline, and you could lose part or all of your
investment. The risks and uncertainties we describe are not the
only ones facing us. Additional risks not presently known to us or
that we currently deem immaterial may also impair our business
operations. In addition, our past financial performance may not be
a reliable indicator of future performance, and historical trends
should not be used to anticipate results in the future. See "Safe
Harbor" below.
Safe Harbor - Forward-Looking Statements:
The information provided in this press release may include
forward-looking statements relating to future events or the future
financial performance of Exactus, including statements concerning
harvest expectations, the impact of Exactus’ acquisition of
Green Goddess, LeVor Collection, and interests in the 2019 harvest
on its supply and product line expansion, Exactus’ ability to
monetize its harvest, Exactus’ ability to expand its product
lines and brands, the amount of future orders for Exactus products,
and Exactus’ future revenue, gross margins and working
capital. Because such statements are subject to risks and
uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements. Words such
as "anticipates," "plans," "expects," "intends," "will,"
"potential," "hope" and similar expressions are intended to
identify forward-looking statements. These forward-looking
statements are based upon current expectations of Exactus and
involve assumptions that may never materialize or may prove to be
incorrect. Actual results and the timing of events could differ
materially from those anticipated in such forward-looking
statements as a result of various risks and uncertainties. Detailed
information regarding factors that may cause actual results to
differ materially from the results expressed or implied by
statements in this press release relating to Exactus may be found
in Exactus’ periodic and current filings with the SEC,
including the factors described in the sections entitled "Risk
Factors", copies of which may be obtained from the SEC's website at
www.sec.gov. Any forward-looking statement speaks only as of the
date on which such statement is made, and Exactus does not intend
to correct or update any forward-looking statement, whether as a
result of new information, future events or otherwise.
Exactus Contact:
Andrew Johnson
Chief Strategy Officer
Exactus Inc.
509-999-9695
ir@exactusinc.com
Exhibit 99.2
Operator:
Ladies and gentlemen, thank you for standing-by and welcome to
Exactus Inc.’s First Quarter 2020 Earnings Conference Call.
My name is _________ and I will be the conference operator today.
At this time, all participants are in a listen-only mode and as a
reminder this conference call is being recorded.
On June 30th, Exactus issued a
news release announcing the company’s financial results for
the first quarter 2020 and filed their Form 10-Q. If you have not
reviewed this information, both are available within the Investor
Relations section of Exactus’s website at www.exactushemp.com
and the Form 10-Q is also available on the SEC’s
website.
I would now like to turn the conference call over to Andrew
Johnson, Chief Strategy Officer. Please go ahead sir.
Andrew Johnson - Intro and Legalities
Thank you, _____, good afternoon and welcome to Exactus
Inc.’s first quarter 2020 results conference call. With us
today are Exactus’s Interim Chief Executive Officer, Emiliano
Aloi, President, Derek Du Chesne, and Chief Financial Officer,
Kenneth Puzder.
Today's conference call may include forward-looking statements,
including statements related to Exactus’s farming operations,
the timing of future harvests, the number of Exactus brands that
the company will supply in the future, the expansion of the sale of
Exactus products in new markets, plans to add to the management
team, future financial results, business development opportunities,
future cash needs, Exactus’s operating performance in the
future, future investor interest and analyst coverage of Exactus,
the timing and certainty of the closing of a private placement
financing, and whether potential proceeds from the financing will
drive farming and distribution expansion, that are subject to risks
and uncertainties relating to Exactus’s future business
prospects and opportunities as well as anticipated results of
operations. Forward-looking statements represent only the
Company’s estimates on the date of this conference call and
are not intended to give any assurance as to actual future
results.
Because forward-looking statements relate to matters that have not
yet occurred, these statements are inherently subject to risks and
uncertainties. Many factors could cause Exactus’s actual
activities or results to differ materially from the activities and
results anticipated in forward-looking statements. These risk
factors include those contained in Exactus’s Annual Report on
Form 10-K and Form 10-Q most recently filed with the SEC. Please
note that the Company assumes no obligation to update any
forward-looking statements after the date of this conference call
to conform with the forward-looking statements actual results or to
changes in its expectations.
Finally, this conference call is being recorded via webcast. The
webcast will be available at the Investor Relations section of our
website at www.exactushemp.com.
With that, it's now my pleasure to introduce our Interim CEO,
Emiliano Aloi.
Emi—Introduction and Roadmap Update
Thank you, Andrew. Good afternoon everyone and thank you for
joining our first quarter 2020 conference call.
I will provide some highlights of our first quarter as well as a
general outlook on our future. Q1 has been a unique period for our
company and the world to say the least. The beginning of the year
found us already undergoing our transition into a leaner company
with a broader supply chain and customer base, and shifting our
orientation into forging the customer relationships and building
out our sales and marketing team. In February, the COVID-19 crisis
erupted and created a very challenging environment for all, but in
the end it both accelerated and in many ways helped that shift as
it made us turn our focus on generating rapid revenue in our
ingredient sales, as well as the development of our genetics
platform and white label division.
At a board level, we are honored to have attracted Julian Pittam as
our new Executive Chairman and board member, as well as Larry Wert
and Justin Viles to the board. With their additions, we now have a
board that has deep relationships in the capital markets, a broad
media reach, and great technology and innovation
background.
More importantly, we have also implemented some special action
committees with a group of incredibly involved and dynamic board
members that will help us further define our company culture and
forge our identity as an industry leading player and innovator in
the space, marked by a very aggressive growth campaign through
M&A and digital transformation in the years to
come.
With the hemp industry rapidly evolving and now having a myriad of
new resources to standardize and fiscalize products, pricing and
testing, and the sales process in general has been streamlined
allowing for less physical verification of products by sales
agents. At a commercial and operations level, we have continued to
build out our IT structure, and now have full CRM, project
management, focusing on campaign management systems that are now in
place, soon to be followed by inventory and product pipeline
integration. This will allow us to recruit, train, and capitalize
on new additions to our growing sales team without the challenges
of needing so much in person interaction. We have been actively
engaging some of the top performers in the industry, and are
looking forward to attracting some more key players to our team in
the near future.
On the supply side, we have taken many initiatives that broaden our
product offerings into specialty cannabinoids and many new finished
products to accelerate our growth into white label solutions for
leading brands. We have entered into a supply agreement with
Hemptown Organics that marks a turning point into a more integrated
approach of both companies to service the, and that gives us direct
access to one of the largest supplies of Cannabigerol or CBG, as
well as the ability to utilize their manufacturing platform to
offer a higher quality of traceability and testing as a competitive
advantage for private label clients.
Quarter end revenues for Q1 have increased significantly to
$836,000, showing that our new approach to the market is rendering
results, and it’s showing that we are on a healthy growth
path towards profitability. As we scale up, bring forth finished
product sales, and roll in our inventory into the sales channels,
we will have the necessary pieces in place to be profitable. So far
our sales have been mainly driven by bulk ingredients sourced from
third parties in anticipation of our own produce, so profitability
will increase largely as our own product rolls into the sales
channels, while we maintain our relationships with our customers by
satisfying their needs by way of outsourcing supply. In addition,
our newly formed white label division will provide us with a sales
platform defined by its higher profit margins and customer loyalty,
albeit the sales process is longer than that of ingredient
sales.
In essence, Q1 marks the moment in which Exactus leaned up and
started the accelerated buildout of its world class commercial
infrastructure. We will continue to attract talent as we solidify
our presence in the market as a solutions provider and quality
supplier, and are now ready for the most critical stage of growth
of our company through mergers, acquisitions, and consolidation of
brands and other assets in the hemp supply chain.
It is now with great pleasure that I would like to introduce you to
Derek, who will walk you through some of recent commercial
successes, as well as give you an outlook of what’s to come
in our growth strategy.
Derek - Restructuring and growth strategy
Thank you, Emi, we are pleased to report Q1 revenue of $836,000 as
we have been working diligently restructuring the business with a
focus on generating revenue while cutting costs.
During the first quarter we began building the new Exactus product
portfolio, notable product development, created an entirely new
website, launched the ingredients division, developed the Genetics
and White-Label divisions, gained significant media attention,
created new marketing collateral, and built out internal processes
and systems designed to scale. This framework also includes a full CRM
integration throughout the sales and supply chain
infrastructure.
Sustainable business growth
starts by putting your customer at the heart of your organization.
The CRM that we've been implementing unifies sales, marketing, and
support teams to help Exactus deliver a consistent, relevant
experience, across every stage of the customer journey. We
will continue to add on to our team, expand our customer base and
product portfolio, while optimizing our digital footprint, increase
overall visibility on the Company while simultaneously educating
our clients on the products and services we provide.
Our white label division is almost complete and will be launching
shortly. This platform will not only provide an additional revenue
stream, but give us the opportunity to develop a network of
acquisition targets. Our acquisition strategy will be based on
identifying emerging growth consumer brands that have a strong
leadership team with existing distribution channels that the
company will be able to leverage our supply chain and digital
marketing expertise.
Public relations has also played an essential part of our strategy
as we continue to gain media attention through mainstream and trade
publications reporting on our progress including the products and
services that we offer. By positioning Exactus as the thought
leader in the space, we are providing a more thoughtful and
education-based approach to provide our customers with real value
in addition to premium products.
We are confident that we have all of the pieces in place to start
scaling up as we have made
significant progress in this short time and while there is still a
lot more work to be done, we are very excited about the future of
Exactus.
I would now like to turn the call over to Ken, who will review our
financials.
Ken - Financial Results
Thank you, Derek and good afternoon everyone.
As mentioned in our last call, we expect to see revenues picking up
substantially in calendar year 2020. Despite the market pressures
Emiliano mentioned earlier and the effects of COVID 19 felt around
the world, we remain optimistic about a substantial growth in
revenue.
For the quarter ended March 31, 2020, Exactus reported net sales of
$836,000 versus $15,980 in Q1 of 2019.
For the three months ended March 31, 2020, Exactus reported cost of
sales of $1.4 million versus $12,600 in Q1 of 2019. This due,
primarily, to increased product sales over Q1 of 2019 and an
impairment expense on damaged hemp flower inventory of $553,440
during the quarter.
Operating expenses for the first quarter decreased by $406,467 to
$2,192,767 as compared to the first quarter of 2019 of $2,599,234.
We have significantly decreased compensation costs thus far in
calendar year 2020 and we continue to build on sales infrastructure
and position ourselves for revenue growth.
Other income, net of other expense, decreased for the three months
ended March 31, 2020 by $1.4 million to a net expense of 188,480 as
compared to a net income of $1.2 million for Q1 2019. This net
decrease to other income is due primarily to a gain on the
settlement of debt in Q1 of 2019 and a reduction of derivative loss
in Q1 of 2020.
Net loss available to common shareholders in the first quarter
increased by $1.5 million to $2.9 million as compared to the first
quarter of 2019 of $1.4 million.
Our inventory decreased by $25,721 to $397,098 in the first
quarter, down from $422,819 in the first quarter of
2019.
Shareholders’ equity decreased by $1.1 million to $1.5
million in the first quarter, down from $2.6 million in the
first quarter 2019.
Since we are in an aggressive growth stage, margins and EBITDA are
not yet metrics that we are reporting but may do so in the
future.
We ended first quarter 2020 with $9,541 in cash and cash
equivalents.
On May 22, 2020, the Company received federal funding in the amount
of $236,410 dollars through the Paycheck Protection
Program.
On May 28, 2020, the Company received a Secured Disaster Loan from
the Small Business Administration in the amount of
$99,100.
As reported in our recently filed 10-Q, we currently have
49,564,420 shares of common stock issued and
outstanding.
We want to thank everyone for dialing in this afternoon and look
forward to keeping you updated on our progress.
With that I would like to pass the call off to the operator for
questions.