GlobeNewswire Inc | Aug 20, 2020 10:52AM EDT

August 20, 2020

Second Quarter 2020 Highlights

-- Total Net Revenue of $531,240 -- Continuation of Sales & Marketing Buildout -- White Label Division Launch -- European Sales Expansion -- Strengthened the Balance Sheet

DELRAY BEACH, Fla., Aug. 20, 2020 (GLOBE NEWSWIRE) -- Exactus, Inc. (OTCQB: EXDI) (the Company) a leading supplier of hemp-derived ingredients (CBD/CBG) and feminized hemp genetics, reported its financial results for the second quarter 2020 and conference call dial-in information.

During the second quarter of 2020, Exactus continued to generate year over year revenue growth through a time of pandemic.

Focusing on core competencies of bulk raw ingredients, the company has built a solid pipeline of potential opportunities and has been successful in selling into the European market.

The company has continued to attract top talent with the additions Daniel Alberttis as Chief Operating Officer, Mark Alouf as Director of Sales, and recruited Sonya Bain as Sales Manager and Product Specialist to facilitate the growth and manage large scale accounts.

With these additions, the Company will be directing its efforts to specialty ingredients, and white label business to expand its customer base and leverage its relationships to drive more profitable and scalable revenue.

Emiliano Aloi, Interim CEO of Exactus stated, "We are happy to see that our strategic shift is bringing fundamental and tangible results. Our board and management team have worked closely and diligently to achieve this transition. We feel that we are coming together as a company and bringing forth the solutions that our clients and shareholders want. Our year over year sales are up, our burn is down, and our debt is shrinking. Specifically, we are very proud of our new integrated CRM, sales, and E-commerce integration that Mark Alouf and his team have put together, and of Sonya Bains leadership in launching our white label division. These are the results that we need to strengthen our position in the market and to enable Exactus to engage in its M&A growth strategy.

Second Quarter 2020 Financial Summary

Total net revenue for the second quarter 2020 was $531,240 versus $139,683 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 -$1,529,070 versus -$955,226 million in the prior year. The net loss for the second quarter 2020 was due, primarily, to non-cash expenses for stock-based compensation.

Conference Call

Management will hold a conference call on Thursday, August 20, 2020 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss its second 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 13708862.

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 13708862.

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=141347.

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.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

Condensed Balance Sheets (Unaudited) - USD Jun. 30, 2020 Dec. 31, 2019($)Current Assets: Cash and cash equivalents $298,754 $18,405 Accounts receivable, net 42,895 55,725 Accounts receivable - related party 107,660 18,860 Inventory 340,528 1,337,809 Prepaid expenses and other current assets 60,114 248,776 - currentPrepaid expenses and other current assets 622,159 622,160 - related party - currentDue from related parties 0 127,500 Total current assets 1,472,110 2,429,235 Other Assets: Deposits 0 80,000 Prepaid expenses and other current assets 9,589 0 - long termPrepaid expenses and other current assets 2,175,000 2,492,045 - related party - long-termProperty and equipment, net 405,775 477,433 Intangible assets, net 1,656,894 2,147,311 Operating lease right-of-use assets, net 310,694 390,810 Total other assets 4,557,952 5,587,599 TOTAL ASSETS 6,030,062 8,016,834 Current Liabilities: Accounts payable 2,026,841 1,442,409 Accounts payable - related party 454,511 454,511 Accrued expenses 589,148 238,010 Unearned revenue -related party 0 215,000 Notes payable - current portion 90,755 0 Note payable - related parties 78,017 55,556 Subscription payable 250,000 250,000 Convertible notes, net of discounts 575,979 85,906 Derivative liability 468,387 880,410 Interest payable 39,332 16,677 Due to related party 84,500 0 Operating lease liabilities, current 178,541 169,869 portionTotal current liabilities 4,836,011 3,808,348 Long Term Liabilities: Convertible notes payable 0 100,000 Notes payable - long-term portion 244,755 0 Operating lease liabilities, long-term 132,154 220,942 portionTotal long term liabilities 376,909 320,942 TOTAL LIABILITIES 5,212,920 4,129,290

CondensedStatements of 3 Months Ended 6 Months EndedOperations andComprehensiveLoss(Unaudited) - Jun. 30, 2020 Jun. 30, 2019 Jun. 30, 2020 Jun. 30, 2019USD ($)

Income StatementNet revenues $531,240 $99,164 $1,051,440 $115,144 Net revenues - 0 40,519 315,800 40,519 related partyNet revenues 531,240 139,683 1,367,240 155,663 Cost of sales 562,270 0 1,604,743 0 Cost of sales - 60,000 103,187 417,783 115,787 related partyTotal cost of 622,270 103,187 2,022,526 115,787 salesGross profit (91,030 ) 36,496 (655,286 ) 39,876 (loss)Operating Expenses:General and 760,306 622,079 1,820,893 1,274,288 administrationSelling andmarketing 132,110 176,602 413,000 228,480 expensesProfessional 552,197 330,891 1,280,068 2,211,038 and consultingResearch and 0 11,975 0 26,975 developmentTotal operating 1,444,613 1,141,547 3,513,961 3,740,781 expensesLoss from (1,535,643 ) (1,105,051 ) (4,169,247 ) (3,700,905 )OperationsOther Income (Expenses):Derivative gain 249,982 0 356,468 (1,454,729 )(loss)Gain onextinguishment 39,142 0 39,142 0 of debt, net(Loss) gain onsettlement of (16,500 ) 0 (23,000 ) 3,007,629 debt, netInterest (420,675 ) (2,519 ) (709,141 ) (369,432 )expenseTotal OtherIncome (148,051 ) (2,519 ) (336,531 ) 1,183,468 (Expenses), netLoss BeforeProvision for (1,683,694 ) (1,107,570 ) (4,505,778 ) (2,517,437 )Income TaxesProvision for 0 0 0 0 income taxNet Loss (1,683,694 ) (1,107,570 ) (4,505,778 ) (2,517,437 )Net Lossattributable to 154,624 152,344 310,443 187,948 non-controllinginterestNet LossAttributable to (1,529,070 ) (955,226 ) (4,195,335 ) (2,329,489 )Exactus, Inc.Deemed dividendon Preferred 0 0 0 (904,450 )StockNet Lossavailable toExactus, Inc. $(1,529,070 ) $(955,226 ) $(4,195,335 ) $(3,233,939 )commonstockholdersNet Loss perCommon Share - $(0.03 ) $(0.03 ) $(0.10 ) $(0.09 )Basic andDilutedNet Lossattributable tonon-controllinginterest per 0 0 (0.01 ) (0.01 )Common Share -Basic andDilutedNet Lossavailable toExactus, Inc.common $(0.03 ) $(0.03 ) $(0.09 ) $(0.12 )stockholdersper CommonShare - Basicand DilutedWeightedAverage Numberof CommonShares 48,203,183 35,203,356 46,757,076 27,227,822 Outstanding:Basic andDiluted

Condensed Consolidated Statements of Cash 6 Months EndedFlows (Unaudited) - USD ($) Jun. 30, 2020 Jun. 30, 2019Cash Flows From Operating Activities: Net loss $(4,505,778 ) $(2,517,437 )Adjustments to reconcile net loss to cash used in operations:Depreciation 53,787 11,851 Derivative (gain) loss (356,468 ) 1,454,729 Gain on extinguishment of debt, net (39,142 ) 0 Stock-based compensation 1,023,303 2,083,638 Bad debt expense 51,470 0 Impairment expense 57,871 0 Inventory reserve 660,000 0 Amortization of prepaid stock-based 378,138 0 expensesAmortization of discount and debt issuance 579,115 339,806 costs for convertible notesAmortization of intangible assets 490,417 299,355 Amortization of operating lease 80,116 0 right-of-use assetsNon-cash interest expense 90,000 0 Loss (gain) on settlement of debt 23,000 (3,007,629 )(Increase) decrease in operating assets: Accounts receivable (38,640 ) (69,914 )Accounts receivable - related party (88,800 ) (40,519 )Inventory 337,281 (1,047,781 )Advance to supplier - related party 0 (820,108 )Prepaid expenses and other current assets - 127,570 (289,227 )currentPrepaid expenses and other current assets - (9,589 ) 0 long termDeposit 40,000 0 Increase (decrease) in operating liabilities:Accounts payable 561,432 105,400 Accounts payable - related party 0 6,762 Accrued expenses 351,138 0 Unearned revenues (215,000 ) 0 Interest payable 28,815 6,746 Operating lease liabilities (80,116 ) 0 Net Cash Used In Operating Activities (400,080 ) (3,484,328 )Cash Flows From Investing Activities: Purchase of membership interest in 0 (1,000,000 )subsidiaryPurchase of property and equipment 0 (385,382 )Net Cash Used In Investing Activities 0 (1,385,382 )Cash Flows From Financing Activities: Advances from related party 97,000 30,000 Repayments on related party advances (12,500 ) 0 Proceeds from sale of Common Stock 350,000 5,478,838 Payments of principal on notes payable 0 (11,129 )Proceeds from issuance of notes payable 355,929 14,229 Payments of principal on convertible notes (110,000 ) (186,443 )Proceeds from issuance of convertible 0 206,900 notes, net of issuance costNet Cash Provided By Financing Activities 680,429 5,532,395 Net increase in cash and cash equivalents 280,349 662,685 Cash and cash equivalents at beginning of 18,405 1,960 periodCash and cash equivalents at end of period 298,754 664,645 Supplemental Cash Flow Information: Cash paid for interest and finance charges 11,211 22,890 Cash paid for taxes 0 0 Non-Cash transactions investing and financing activity:Proceeds from sale of Series A preferred 0 55,090 stock paid directly to settle debtsConvertible notes and interest payable 0 849,360 settled by Series A preferred stock issuedNote payable, accrued expense and interest 83,160 40,616 payable settled by common stock issuedConvertible notes settled by common stock 0 196,000 issuedCommon stock issued for purchase of 0 1,440,000 membership interest in subsidiaryIncrease in intangible assets for 0 1,650,000 subscription payableInitial beneficial conversion feature and 0 206,910 debt discount on convertible notesPreferred deemed dividend 0 904,450 Operating lease right-of-use assets andoperating lease liabilities recorded upon 0 506,506 adoption of ASC 842Reduction of operating lease right-of-use $80,116 $39,470 asset and operating lease liabilities