Point-of-care diagnostics tools healthcare company which has diversified into Cannabidol (CBD) products
Engaged in producing industrial hemp from two farms in southwestern Oregon
Forecasts final production per acre from September harvest to exceed 2,000 pounds of dry flower biomass
What it does:
Exactus Inc (OTCMKTS:EXDI) is an established point-of-care diagnostics tools healthcare company which diversified in January 2019 to pursue opportunities in hemp derived Cannabidiol (CBD) products.
The company sells its CBD products through its own Exactus brand and white label products to third-party resellers.
It is also engaged in producing industrial hemp from farms in Oregon and plans to extract and manufacture directly through certified good manufacturing practice (cGMP) facilities.
Exactus One World is the name of the group’s farming and production initiative, which the firm says captures “the expansive and inclusive nature of the vision of a comprehensive seed to sale consumer program.”
The seeds (genetics) used at Exactus One World are sourced from Oregon CBD, founded by Seth and Eric Crawford, who are believed to have developed superior strains of hemp seeds and are thought to be one of the world's leading breeding, research and production facilities for CBD seed.
Exactus farms and processes industrial hemp to be manufactured into CBD related products using, as much as possible, their facilities and cGMP resources at every step of the supply chain.
The group also has Point-of-Care diagnostic tools which use patented technology to analyze biometric markers in a single drop of blood, revealing important insights into patient health.
The FibriLyzer is intended to provide a simple and affordable solution to assess the fibrinolytic status of patients in a broad range of applications - including surgery, trauma, orthopedics, heart, stroke and chronic coronary disease management – and could provide the basis for improved management of patients who are at-risk of uncontrolled bleeding.
The MatriLyzer will be developed to detect the initial occurrence or the recurrence of cancer during routine office visits. The appearance of elevated levels of collagenase, the enzyme that degrades collagen, have been proven to be an early hallmark of cancer.
How’s it doing:
In January 2019, Exactus entered into a Master Product Development and Supply Agreement with Ceed2Med, a hemp and hemp-derivative supply sourcing, production, distribution and development company.
Ceed2Med utilizes cGMP facilities and, under the agreement, Exactus has been allotted a minimum of 50 kilograms and up to 300 kilograms per month, and up to 2,500 kilograms annually, of active phyto-cannabinoid (CBD) rich ingredients for resale.
The company offers tinctures, edibles, capsules, and topical solution products manufactured for use by Ceed2Med.
As part of the deal, Exactus issued 67 million shares to Ceed2Med, giving the firm 51% ownership of the company on a fully-diluted basis. As part of the transaction, Emiliano Aloi of Ceed2Med was appointed President of Exactus.
Ceed2Med has been working on developing production systems for the processing and extraction of cannabinoids since 2014.
During March 2019, Exactus acquired a majority interest in two industrial hemp farms, totaling approximately 200 leased acres, from highly regarded hemp farmers located in Southwest Oregon - approximately 100 acres in the Rogue Valley and approximately 100 acres in the Illinois Valley.
Ceed2Med developed the farms at the request of the company so it can produce its own CBD biomass, isolate and distillate in 2019 and thereafter.
The minority holders are experienced farmers who have successfully produced industrial hemp with Ceed2Med in Southwest Oregon.
At the start of July, Exactus revealed it had made significant progress on the two 100 acre industrial hemp farms located in Southwest Oregon.
The group said farming operations are ahead of schedule and, following the mid-September harvest of the top flower, it is forecasting final production per acre to exceed 2,000 pounds of dry flower biomass, yielding over 40,000,000 mg of active cannabinoids.
It added that end consumer product stock keeping units (SKUs) range from 200mg up to 6,000mg and average around 750mg per sellable unit.
What the boss says:
Philip Young, Exactus’s chief executive officer said in an announcement at the start of July: “We are investing ahead of our harvest to establish multiple commercial distribution channels and sales verticals.
“The successful planting of the seedlings gives us confidence that we will be able to realize significant crop value which we plan on converting into over forty SKU’s of consumer products which would be valued at multiples of the harvested biomass.”
A third party evaluation of Exactus One World’s enterprise value was $31.050 million, according to a Fairness Opinion report published by Scalar in April, which also noted that the firm has a clean balance sheet and cap table and has successfully raised $4 million in capital from family and friends.
The Scalar report provided management’s projection for the group’s total revenues to be $32.557 million in the year to 31 December 2019, rising to $65.113 million in 2020, and to $95.288 million by 2021.
Underlying earnings (EBITDA) are seen rising from $28.916 million in 2019, to $57.932 million in 2020, and $84.826 million in 2021, according to numbers provided by Exactus’s management to Scalar, with an EBITDA margin of 88.8% in 2019, rising to 89.0% for the following years.
Scalar said the Exactus management also stated that the genetic variant of hemp it is growing is expected to yield 15% -18% CBD per pound, which will be sold at an expected price of $3.50 per percentage of CBD per pound of biomass.
Exactus has a current market cap of around $40 million, with its shares currently trading at $1.17 each on the OTC Market.