8-K

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)

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)).

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of exchange on which registered
N/A	N/A	N/A

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 1 – REGISTRANT’S BUSINESS AND OPERATIONS

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. Werthas 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.

Larry Wert	Director, Executive Chairman, Strategic Advisory Committee Chair	Options to purchase 3,500,000 shares of common stock at $0.025 per share
Julian Pittam	Director, Strategic Advisory Committee	Options to purchase 1,500,000 shares of common stock at $0.025 per share
Daniel Alberttis	COO	Options to purchase 2,500,000 shares of common stock at $0.025 per share, subject to vesting
Andrew Johnson	Chief Strategy Officer	Options to purchase 3,500,000 shares of common stock at $0.025 per share

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

Exhibit No.	Description
10.1	Settlement and Release Agreement with Ceed2Med, LLC(1)
10.2	Agreement (redacted) with Dr. Krassen Dimitrov, Digital Diagnostics, Inc. and KD Innovation, Ltd. (2)
99.1	Press Release dated January 25, 2021

(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.

	EXACTUS, INC.
Date:      January 27, 2021	By: /s/ Alvaro Daniel Alberttis Alvaro Daniel Alberttis Principal Executive Officer

EX-10.2

Exhibit 10.2

SETTLEMENT AGREEMENT

[Note – Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. The redacted information is indicated with brackets.]

A.

Definitions.

Common Stock means the common stock, par value $0.0001 per share, of Exactus, Inc.

Consulting Agreement means that certain Consulting Agreement dated as of by and between EDI and KDI.

DDI means Digital Diagnostics, Inc., an Australian corporation.

Default shall have the meaning ascribed to such term in Section E hereof.

Effective Date means the date of execution of this Agreement by the Company, EBI, KD, KDI, and DDI.

Exactus or the Company means Exactus, Inc. a Nevada corporation including its subsidiaries, predecessors, successors and assigns (for the absence of doubt, including Exactus Biosolutions, Inc. and Exactus Diagnostics, Inc.).

KD means Dr. Krassen Dimitrov.

KDI means KD Innovation, Ltd. a limited liability company organized under the laws of Taiwan,

License Agreement means that certain Collaboration and License Agreement dated as of January 19, 2016 by and between DDI and EBI, as amended or supplemented from time to time.

Option Agreement shall have the meaning ascribed to such term in Section F hereof.

Permitted Transfers shall have the meaning ascribed to such term set forth on Exhibit B annexed hereto.

Retained Shares means [ ].

Released Company Parties are Exactus, its past or present officers, directors, and employees, consultants, subsidiaries, insurers, co-insurers or reinsurers, attorneys, advisors, trustees, executors, heirs, spouses, marital communities, executors, estates, affiliates, subsidiaries and successors-in-interest.

Released KD Parties are KD, KDI, DDI, its past or present officers, directors, and employees, consultants, subsidiaries, insurers, co-insurers, or reinsurers, attorneys, advisors, trustees, executors, heirs, spouses, marital communities, executors, estates, affiliates, subsidiaries, and successors-in-interest.

Settling Parties are Company, KD, KDI and DDI.

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Settlement Shares shall have the meaning ascribed to such term in Section C.1 hereof.

B.

The Agreement Is Binding

Upon execution of this Binding Agreement by the Settling Parties, the provisions of this agreement shall be a binding and enforceable contract, settlement and release enforceable against the Settling Parties.

The Settling Parties will prepare all additional necessary or appropriate settlement documents to effectuate the intent and purposes of this Agreement. Exactus is hereby authorized and empowered to take all action necessary or appropriate to effectuate the Settlement Terms set forth herein, including, without limitation, a power of attorney and to execute a stock power to provide instructions to the transfer agent for Common Stock to transfer the Settlement Shares (as defined below) as provided herein and to effectuate the Option Agreement (as defined below).

C.

Settlement Terms

1.

Company shall issue and KD shall receive [ ] on the Effective Date (the "Settlement Shares") and KD shall enter into an Option Agreement substantially in the form of Exhibit A annexed hereto. Within three business days of the Effective Date, Company shall transmit to KD a letter from the Company's Transfer Agent documenting the issuance of the Settlement Shares. Provided the option rights granted in the Option Agreement have not been exercised, upon the request of KD, Company shall assist KD to effectuate deposit of the Settlement Shares to a single brokerage of KD's choice. Company shall provide authorization to the Company's transfer agent and at Company's cost a legal opinion required for such deposit, provided KD shall provide such authorizations and instructions required of KD by the transfer agent (Including a currently dated medallion guaranteed stock power, representation letter in customary form and transfer agent instructions, and board resolutions of KD necessary to issue a Rule 144 opinion and transfer shares), and each will provide any other formalities necessary for deposit into street name in the brokerage account as reasonably requested by the transfer agent.

2.

KD, KDI and DDI agree to the covenants set forth in Exhibit B.

3.

The License Agreement, Consulting Agreement and any and all other contracts, agreements, understandings or arrangements by and between the parties concerning the subject matter hereof are terminated and of no further force or effect.

4.

Any and all letters, instructions, authorizations, claims, or assertions, purported on behalf of KD, KDI or DDI are hereby withdrawn and of no force or effect. KD, KDI and DDI acknowledge and agree that no amounts are due and owing to any of them, and approves cancellation and removal from the financial statements of the Company all amounts, contingent or otherwise, that may become due or owing to any of KD, KDI of DDI, including, without limitation, any Consulting Fees, License Fees, interest, penalties, legal fees, expense reimbursements, options, warrants or rights, which are hereupon cancelled, discharged and waived In all respects.

5.

[ ] shall be “restricted securities” as defined in paragraph (a) of Rule 144 under the Securities Act of 1933, as amended (the "Act") acquired for investment purposes only and without the intent to make a further distribution of such shares, issued pursuant to an exemption from the registration requirements of the Securities Act, under Section 4(a)(2) of the Act and the rules and regulations promulgated thereunder. Certificates representing the shares of the Company shall bear a restrictive legend in substantially the following form:

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The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended, and may not be offered for sale, sold, or otherwise disposed of, except in compliance with the registration provisions of such Act or pursuant to an exemption from such registration provisions, the availability of which is to be established to the satisfaction of the Company, and are subject to the By-laws of the Company which contain certain restrictions on transfer and are available upon request to the Secretary of the Company.

The shares represented by this certificate are subject to an Option Agreement a copy of which will be provided upon request.

6.

The Settling Parties shall not be liable for any other amounts or obligations other than upon the occurrence of Default hereunder.

D.

Releases.

Released KDI Parties release and discharge the Released Company Parties from any claim, demand, action, or cause of action, known or unknown, which arose at any time from the beginning of time to the date of this binding agreement, and waive all claims against or in any way connected with the Released Company Parties or their officers or directors, including, without limitation, any claim, demand, action, cause of action, including money damages and claims for attorneys’ fees, all subject to this Agreement.

Released Company Parties release and discharge the Released KDI Parties from any claim, demand, action, or cause of action, known or unknown, which arose at any time from the beginning of time to the date of this binding agreement, and waive all claims against or in any way connected with the Released KDI Parties ortheir officers and directors, including, without limitation, any claim, demand, action, cause of action, including money damages and claims for attorneys’ fees.

The Settling Parties will prepare all necessary settlement documents to confirm the settlement and the dismissal, with prejudice of that certain arbitration commenced before the American Arbitration Association, Case No 01-19-0002-8473-2-BM (the “Dismissed Arbitration”). The releases herein shall include all claims raised in the Dismissed Arbitration or that could have been raised in the Dismissed Arbitration or brough in any other venue or forum under the License Agreement or the Consulting agreement.

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E.

Default.

 

In the event that within three business days of the Effective Date the Company fails to provide proof of issuance of Settlement Shares to KD or in the event that within fourteen (14) days following the six (6) month anniversary of the Effective Date, the Company fails to remove the restrictive legend required under Section C.5 hereof, provided KD has provided the transfer agent with all required documents from KD, and remit to the account designated by KD the Settlement Shares, unless the Option Agreement has been exercised and the Optionee has tendered to KD immediately available funds for the option exercise as set forth in the Option Agreement, the Company will be in default. Pursuant to any default KD may then email a notice of default to counsel for the Company at rcarmel@cmfllp.com, demanding cure of default, which shall be cured if the Option is immediately exercised and the payment is received by KD within ten (10) days of the notice email to an account designated in writing by KD. If payment is not received within ten (10) days of the demand to cure the default The Company hereby irrevocably authorizes the Prothonotary or any attorney admitted to practice before any court of record in the United States or the clerk of such court to appear on behalf of Company in any court in one or more proceedings, or before any clerk thereof or prothonotary or other court official, and to confess judgment against Company in favor of Krassen Dimitrov in the amount of [ ], together with any other charges, costs and expenses for which Borrower is liable under this Agreement, and together with fees of counsel in the reasonable amount of five percent (5%) of all of the foregoing and costs of suit, releasing all errors and waiving all rights of appeal.

 KD shall file an Affidavit in any such proceeding, which shall state substantially the following:

“KD hereby certifies and affirms under penalty of perjury that pursuant to that certain Settlement Agreement dated as of ____ and Option Agreement dated as of _____ Exactus, Inc. is in default of such agreements’ requirement to cause to be deposited shares of Common Stock into a brokerage account and the Option as defined therein has not been exercised. KD has satisfied each and every obligation (including, if applicable to provide documentation requested by the transfer agent in order to issue a Rule 144 opinion) and provide written wiring instructions to Exactus, Inc. and any Option holder. Accordingly, Exactus Inc., is required to pay the amount of _____ to KD Notice of Default has been delivered to Exactus, Inc. and its counsel at least 14 days prior to this request for an order in accordance with the Settlement Agreement a true and correct copy of which is affixed hereto.”

If a copy of this Agreement, verified by affidavit, shall have been filed in such proceeding, it shall not be necessary to file the original as a warrant of attorney. Company hereby waives the right to any stay of execution and the benefit of all exemption laws now or hereafter in effect. No single exercise of this warrant and power to confess judgment shall be deemed to exhaust this power, whether or not any such exercise shall be held by any court to be invalid, voidable or void. Interest shall continue to accrue after entry of judgment hereunder, by confession, default, or otherwise, at a rate equal to twelve (12%) percent per annum from the Effective Dated through and including the date of payment.

F.

Miscellaneous Terms

The Company shall issue a press release and KD shall not object to a press release language that is substantially as follows: “The parties have reached agreement as to a resolution of all issues and are pleased to announce the settlement of their disputes. Dr. Krassen is pleased that their disputes have been fully resolved and looks forward to the continued success of Exactus.”

Commencing at the Effective Date the KDI agrees that other than Permitted Transfers, none of KDI Released Parties shall sell Common Stock other than as set forth on Exhibit B annexed hereto. Any attempted transfer or disposition of Common Stock in violation or breach of this Agreement shall be null and void and of no effect.

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The Settling Parties shall enter into an Irrevocable Option Agreement (the “Option Agreement”), effective as of the date hereof, in such form and subject to such terms and conditions as the Settling Parties shall agree, which shall be a condition to the effectiveness of this Agreement.

This binding agreement and settlement shall be treated as jointly drafted and will not be construed against any Settling Party as the drafter.

Nothing in this binding agreement shall be construed as an admission of liability, or the absence of liability, by any Settling Party.

From the Effective Date, the Settling Parties agree to keep the terms of the agreement confidential other than as required to effectuate the intent and purposes of this agreement, other than as required to perform the Settlement Agreement, the Option or the transfer of Settlement Shares into a brokerage account, in connection with the preparation of any audit, tax return or financial statements, any and all SEC reporting, and in connection with any investor or regulatory inquiry, due diligence investigation, or investment, loan, contract or credit application or similar business purpose.

From the Effective Date each Settling Party shall not disparage any of the other Settling Parties.

KD agrees that he shall refrain from any future posts on any stock or company message boards except as set forth announcing resolution of the Settling Parties dispute, and shall withdraw from the position of moderator on the Company’s “iHub” message board.

This agreement will be interpreted and governed by the internal laws of the State of Florida without regard to conflicts of law rules. The exclusive forum for the adjudication of any disputes arising under this binding agreement or any of the Settling Parties shall be the United States District Court for the Southern District of Florida or, in the event that the United States District Court for the Southern District of Florida lacks subject-matter jurisdiction, the Circuit Court of the State of Florida sitting in Broward County, Florida Each Settling Party accepts and consents to personal jurisdiction and waives any objection to venue in the identified courts.

This Settlement Agreement is intended to be a binding agreement that sets forth all material terms and obligations of the parties hereto, and the parties hereto shall use their best efforts to consummate the settlement contemplated herein.

This Agreement may be executed in any number of counterparts (including facsimile or PDF), each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

Each party hereto acknowledges that it has been represented by independent legal counsel in the preparation of the Agreement. Each party recognizes and acknowledges that counsel to the Company has represented other shareholders of the Company and may, in the future, represent others in connection with various legal matters and each party waives any conflicts of interest and other allegations that it has not been represented by its own counsel.

[signature page follows]

IN WITNESS WHEREOF, this binding agreement is duly executed as of the dates below.

Exactus, Inc. By: Larry Wert                                             Title: Executive Chairman  Date:                       Dr. Krassen Dimitrov ______________________ Date: KD Innovation, Ltd. By:            Title:                       Date:                       Digital Diagnostics, Inc. By:            Title:                       Date:                      

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EXHBIT A

OPTION AGREEMENT

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EXHIBIT B

Confidentiality. The Settling Parties agree that the contents of the discussions between the parties hereto, are confidential, and, except as required by law or administrative or judicial process or as may be required for any party to enforce its rights hereunder, shall not be disclosed by the Settling Parties to anyone other than its respective officers, directors, employees or representatives that have a need to know and are made aware of the confidential nature of such communication prior to such disclosure. KD, KDI and DDI acknowledge that the Company has certain public disclosure obligations, including, but not limited to, under the Securities Act of 1934, as amended, and that such parties may be required to disclose the existence, terms and content of this agreement, as well as the transactions contemplated hereby and thereby, among other matters.

From and after the Effective Date until the second (2nd) anniversary of the Effective Date, the Released KD Parties shall not interfere with any relationship, contractual or otherwise, between the Company and any supplier, distributor, co-venturer or joint-venturer of the Company to discontinue or reduce its business with the Company.

Permitted Transfers. From and after the Effective Date through and including the six (6) months anniversary thereof, the Released KD Parties shall not sell Common Stock other than: (i) to any trust, partnership, corporation or other entity formed for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that prior to such transfer a duly authorized officer, representative or trustee of such transferee agrees in advance in writing to be bound by and the Shares are subject to, the provisions of this Agreement; (ii) to any of the equity owners of the undersigned or the equity owners of such parties, provided that prior to such transfer the transferee executes an agreement stating that the transferee is receiving and holding the Shares subject to the provisions of this Agreement; (iii) in a private transaction effected outside of the facilities of the principal trading market for the Common Stock provided that such transferee agrees in advance in writing to be bound by and the Common Stock is subject to, the provisions of this Agreement; (iv) to any bidder(s) in an offer to purchase a majority of the outstanding equity securities of the Company made in a tender offer or similar offer made to holders of Common Stock generally; or (v) pursuant to the Option Agreement. On after the six (6) months anniversary of the Effective Date, the Released KD Parties shall not have any restriction on the offer and sale of Common Stock in open market transactions.

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EX-99.1

Exhibit 99.1

Exactus, Inc. Announces 2021 Debt Reduction and Settlement of Claims

- Settlements of over $1,250,000 in Liabilities - - Preferred Stock Conversions -

DELRAY BEACH, FL / January 25, 2020 / Exactus, Inc. (OTCQB: EXDI) (the “Company”) provides a series of announcements including 1) overall debt reduction of approximately $1,250,000; 2) settlement of outstanding claims for license and consulting fees; 3) termination of Ceed2Med affiliation & Series E Preferred Stock cancelation; and 4) conversion of Series A, Series B-1, Series B-2, and Series D Preferred.

As the company continues its restructuring process, it has dramatically cut costs, improved operational capabilities, built its digital sales infrastructure Marketing Automation & Sales System (“MASS”), entered into a manufacturing agreement, launched its private label division, and settled the majority of its liabilities and claims.

Executive Chairman of the Board, Larry Wert commented, “Since the initiation of the restructuring process, the company has worked hard to improve our path to grow shareholder value. We have significantly cleaned up our balance sheet and resolved several issues and obligations as we continue to operate. The company is exploring several opportunities both in and outside the CBD sector. We anticipate that we will have more exciting news in the near future as we are engaged in various growth initiatives.”

The Company took these additional steps as part of its previously announced efforts to reduce operating costs and streamline operations in order to position the Company for future acquisitions.

1)

Following an extensive review, the Company’s outstanding payables and obligations were reduced as follows:

Approximately $1,250,000 in liabilities and payables were eliminated consisting of approximately $575,000 in liabilities previously recorded on the balance sheet for payment to a licensor for Fibrilizer and Matrilizer technology; in addition, liabilities associated to consultants, unpaid loans, advances, bonuses and compensation payable to management of the Company were converted into shares of common stock.

2)

KDI Innoviation Ltd. / Dr. Krassen Dimitrov Arbitration Settlement and Release:

Dr. Krassen stated “I am pleased that our disputes have been fully resolved and I look forward to the continued success of Exactus.”

During September 2019 an arbitration had been commenced against the Company by its former director Dr. Krassen Dimitrov alleging breach of a consulting agreement and for license fees claimed to be due and owing to KDI Innovation, Ltd., his affiliate. The Company asserted various counterclaims and during 2020 the parties agreed to voluntarily dismiss the arbitration in order to enter into direct negotiations for settlement. During January 2021, the parties reached agreement as to a resolution of all issues and are pleased to announce the settlement of their disputes. The terms of the settlement are confidential other than no cash was paid.

3)

Termination of Ceed2Med, LLC Affiliation / Series E Preferred Stock Cancellation:

On July 31, 2019 we granted 10,000 shares of our Series E Preferred Stock to Ceed2Med, LLC in connection with our efforts to enter into a seed to sale strategy for our hemp-derived CBD business and secure farming rights and expertise. In addition, between 2018-2019 we entered into a series of agreements for product and funding with Ceed2Med, LLC. On January 21, 2021 we entered into a Settlement Agreement with Ceed2Med, LLC and its principals cancelling all agreements, obligations and claims and providing full mutual releases of the Company and such persons. In connection with the settlement, Ceed2Med, LLC agreed to assignment of all rights to convert its outstanding shares of Series E Preferred Stock at a price of $1.60 per share to third parties in connection with settlement and releases of third party claims, resulting in no further dilution from issuances of settlement shares other than the right for Ceed2Med to have received such shares upon conversion and thereupon the Series E Preferred Stock was simultaneously converted into shares of common stock.

4)

Series A / Series B-1 / Series B-2 / Series D Preferred Conversions:

The Company has extended a limited period of time for all holder of Series A, Series B-1, Series B-2, and Series D Preferred stock to convert their shares into Common Stock in order to secure releases, eliminate claims, and simplify the cap table. The Company expects to secure full conversion of all shares and exchange mutual releases with the holders.

About Exactus:

Exactus Inc. (OTCQB:EXDI) is a leading producer and supplier of hemp-derived ingredients. Exactus specializes in hemp-derived ingredients (CBD & CBG) that meet the highest standards of quality and traceability. The Company strives to stay ahead of market trends and regulations. 

For more information about Exactus: www.exactushemp.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