Quarterly report pursuant to Section 13 or 15(d)

SUBSEQUENT EVENTS

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SUBSEQUENT EVENTS
9 Months Ended
Sep. 30, 2018
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

On October 8, 2018, the Company filed with the Secretary of State of the State of Nevada a Certificate of Amendment to its Articles of Incorporation increasing its authorized capital stock from 250,000,000 to 700,000,000 shares divided into common stock and preferred stock and increasing the total number of authorized shares of common stock from 200,000,000 to 650,000,000.

 

On November 1, 2018 (the “Effective Date”) Exactus, Inc., a Nevada corporation (the “Company”) entered into a securities purchase agreement with an investor (the “First Investor”), effective October 23, 2018, pursuant to which the Company issued and sold the First Investor a convertible promissory note (the “First Note”) in the aggregate principal amount of $35,250 (the “First Principal”). The First Note matures on October 23, 2019. The First Note bears interest at 12% per annum. Subject to beneficial ownership limitations, the First Investor may elect to convert the First Note into shares of common stock of the Company at a conversion price equal to the lower of $0.04 or 60% of the lowest closing or bid price of the Company’s common stock for the 20 trading days prior to, and including, the date of the applicable conversion, subject to adjustment. The Company has the option to prepay the First Note in full until April 23, 2019 by paying amounts equal to 135% and 150% of the First principal plus interest on the 90th and 180th day following October 23, 2018, respectively. The First Note provides the holder with purchase rights in the event the Company issues convertible securities while the First Note is outstanding. The holder of the First Note has price protection in the event the Company subsequently issues securities on terms more favorable than those to the First Investor. In connection with First Note, the Company granted the First Investor piggyback rights. 

 

On the Effective Date the Company entered into a securities purchase agreement with an investor (the “Second Investor”), effective October 26, 2018, pursuant to which the Company issued and sold the Second Investor a convertible promissory note (the “Second Note”, collectively with the First Note the “Notes”) in the aggregate principal amount of $35,250 (the “Second Principal”). The Second Note matures on October 26, 2019. The Second Note bears interest at 12% per annum. Subject to beneficial ownership limitations, the Second Investor may elect to convert the Second Note into shares of common stock of the Company at a conversion price equal to the lower of (i) the lowest trading price of the Company’s common stock for the 20 trading days prior to October 26, 2018, and (ii) 60% of the lowest price of the Company’s common stock for the 20 trading days prior to the date of the applicable conversion, subject to adjustment. The Company has the option to prepay the Second Note in full until April 26, 2019 by paying amounts equal to 135% and 150% of the Second principal plus interest on the 90th and 180th day following October 26, 2018, respectively. The Second Note provides the holder with participation rights in the event the Company issues convertible securities while the Second Note is outstanding. The Company granted the Second Investor rights of first refusal in the event of future offerings of the Company’s securities.