Exactus Inc (OTCQB:EXDI), a supplier of hemp-derived ingredients and feminized hemp genetics, revealed tenfold revenue growth and its first profitable quarter in its third-quarter results released after the bell Thursday.
In the three months ended September 30, Exactus brought in revenue of $678,050, up from $60,153 in the third quarter of 2019. The increase was primarily attributable to a new customer who represented approximately 24% of the company's net sales in the quarter. Gross profit for the quarter was $114,529.
The company attributed its first profits in part to a growing digital sales infrastructure and increased investment into its back-end systems. The company recently launched the Exactus Alibaba storefront, which has helped the company automate sales processes for scalable revenue growth.
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Exactus believes the hemp ingredient sector is maturing and taking a turn for the positive. The industry as a whole has experienced a major influx of investment into the space resulting in a recent departure of overleveraged companies, the company said. An increase in demand has led to new opportunities for Exactus, including distressed assets and underserved markets.
"We see renewed energy in the space, from investors to consumer markets,” CEO Emiliano Aloi said in a statement. “Our processes are streamlined from outreach all the way to fulfillment. With these new tools in place, our team can scale up sales and plug in new skus in a much faster, cost efficient, and organized manner. We have a clear direction, expanding supply chain, and growing sales. We look forward to ending the year strong, and on track with our M&A growth strategy as we make Exactus healthier, leaner, and more profitable."
Net loss for the quarter was $3 million compared to $2 million in the same period last year. The net loss was primarily due to a non-cash impairment of intangible assets related to farm leases after the company decided not to pursue further farm operations in Oregon.
Exactus specializes in hemp-derived ingredients (Read: CBD, CBG, CBC, CBN) and feminized seeds that meet the highest standards of quality and traceability. The company is focused on being at the forefront of product development for the beverage, food, pets, cosmetics, wellness, and pharmaceutical industries.
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