Panacea Life Sciences Holdings Inc (PLSH)

[tigerpac]

http://archive.fast-edgar.com//20200316/AMBZD62CZ222DZZ2222M2ZZ9BAKGZS22SL22/

Du Chesne replacing Aloi. Gets 1MM shares of restricted stock + repricing of previously awarded 1 MM options. Du Chesne must be expert in this field and perhaps can handle the social marketing of this company better than Aloi.

(For the 250K option shares that were awarded on Feb 18 the price is reduced from .50 to approx. 30 for example).

Company Restructuring Efforts - (LAWSUIT RESPONSE)

Since January 2020, the Company has been re-evaluating its activities during a difficult market in which prices of flower, biomass, isolate and distillate, the Company’s principal products offered for sale, have fallen dramatically in the face of oversupply, diminishing demand and regulatory uncertainty. Considering these market changes, the Company has endeavored to focus on bulk raw ingredient sales as well as a rebrand and redesign of its consumer products for launch. As a result, the Company has accepted the resignations and terminated 9 employees and independent contractors responsible for marketing and sales, including the recently retained Vice President of Sales and Marketing and Chief Information Officer. During this period, the Company also faced challenges that required seeking extension of certain payments to vendors and others, and received waivers and amendments to certain financing agreements, as more fully described in Item 1.01, above. During March 2020, the Company extended offers to each of its terminated employees and independent contractors to pay separation payments that would provide them with full payment of all amounts due and owing. Certain amounts claimed to be due, the compensation rate of certain persons, and terms of employment have been disputed by the Company. The total amounts claimed to be due, whether or not disputed, represent approximately $153,000. On March 3, 2020, the Company received notice of a lawsuit filed by two of its terminated employees entitled Ryan Borcherds and Miriam Martinez v. Exactus, Inc., pending in the circuit court, Palm Beach County, Case No. 890 (February 26, 2020). Mr. Borcherds and Ms. Martinez each seek approximately $10,000 in unpaid wages and have asserted claims including breach of contract and violation of the Fair Labor Standards Act (“FSLA”). One of the named plaintiffs was terminated “for cause” for alleged violations of Company policies and procedures. The Company disputes allegations of existence of any employment agreement and disputes claims under the FLSA, since as a small business ,the Company is not subject to the FLSA.

Entry into a Material Definitive Agreement.

On February 4, 2020, Exactus, Inc. (the “Company”) announced it had entered into a Supply and Distribution Agreement with Hemptown, USA, enabling the Company to purchase and sell Hemptown’s Cannabigerol (CBG) and Cannabidiol (CBD) products, including top flower, biomass and extracts (crude, isolates, distillates, and water soluble). Ceed2Med, LLC, the Company’s largest shareholder, is also a significant investor in Hemptown USA and is party to a distribution agreement with the Company. The Chief Executive Officer and Ceed2Med, LLC will cooperate in developing plans to coordinate the Company’s efforts to introduce CBG and expand its efforts to sell CBD products. During Q1 2020, purchase orders for approximately $950,000 of CBD and CBG products have been received.

On November 27, 2019 the Company entered into a series of agreements (the “Purchase Agreement”) with a single institutional investor (the “Purchaser”), pursuant to which the Company agreed to sell to Purchaser, in a series of 3 closings, up to $1,944,444 in aggregate principal amount of the Company’s senior secured convertible promissory notes (the “Notes”) and warrants to purchase shares of the Company’s Common Stock (the “Warrants”). On November 27, 2019 (the “Initial Closing Date”), the Company issued a Note in the principal amount of $833,333, which is the only borrowing the Company has made under the Notes, as more fully described in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 4, 2019. During March 2020, the Company obtained waivers of certain provisions of the Purchase Agreements in order to defer required registration of Common Stock of the Company and extend payment of amounts of installments of principal and interest, among other things.