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Exactus unveils closing of $2M convertible note

Last updated: 10:49 04 Dec 2019 EST, First published: 09:49 04 Dec 2019 EST

Exactus, Inc -
CEO Emiliano Aloi expects the hemp company's 4Q revenue to exceed $750,000

Exactus Inc (OTCMKTS:EXDI), the Florida-based hemp farm operator, has closed the first tranche of a $2 million senior secured convertible note financing from a single undisclosed institutional investor. 

The aggregate net proceeds from the note are about $1.94 million, post the deduction of the investor’s discount as well as commissions and other expenses.

The note is made up of three tranches. The initial financing consists of the issuance of a note in the principal amount of $833,333 that will be followed by a $277,777 tranche upon the filing of an S1. Lastly, the remaining $833,333 will be distributed once the S1 becomes effective.

READ: Exactus inks Cool & Dre endorsement and co-branding deal

The maturity of the note is 12 months from issuance and it bears an interest rate of 8% per year. Its conversion price is $0.50 per share and its proceeds will be used for working capital and other business purposes.

“We are pleased to have successfully completed this financing which we believe has strengthened our balance sheet and provided us with growth capital to complete the processing of flower from our successful harvest, the buildout of our manufacturing facility, the expansion of our salesforce, as well as the launching of new products,” said Emiliano Aloi, president and CEO of Exactus.

Aloi expects Exactus’s fourth-quarter revenue to exceed $750,000 as the hemp company continues to build out its product lines.

“Looking out to 2020, we expect to see continued momentum with the growth of product sales and anticipate working capital to be a source of cash,” Aloi concluded.

Exactus shares slipped 2% to close Wednesday at $0.58.

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