| EQUITY TRANSACTIONS | Recapitalization
and Change in Control On
February 29, 2016, Exactus, Inc., formerly Spiral Energy Tech, Inc. (the Company) entered into a Share Exchange
Agreement (the Agreement) with Exactus BioSolutions, Inc. (Exactus BioSolutions), a Delaware corporation.
Under the terms of the Agreement, the Company acquired all of the issued and outstanding capital stock of Exactus BioSolutions,
Inc. in exchange for our issuance of a total of 30 million shares of our newly-designated Series B-1 Preferred Stock to the former
shareholders representing approximately 87% of voting control of the Company upon consummation of the Agreement in exchange
for 100% of Exactus BioSolutions common stock. The Company initially reported an issuance of 32 million shares of Series
B-1 Preferred Stock being issued in exchange for the capital stock of Exactus Bio Solutions. Due to an anticipated pre-acquisition
investment in Exactus BioSolutions that was not made, however, the final total issued shares of Series B-1 Preferred Stock was
30 million. The consummation of the Agreement resulted in a change in control of the Company. As part of this transaction, the
Company acquired a $50,000 license agreement and $1,292 in cash. The Company also assumed liabilities of $51,000. Exactus
BioSolutions is a life science company, formed in December 7, 2015 and owns a license to develop and commercialize Point-of-Care
(POC) diagnostics for measuring proteolytic enzymes in the blood based on a proprietary detection platform. The Company has considered
the guidance pursuant to Rule 11-01(d) of Regulation S-X and related interpretations and has concluded the acquisition of Exactus BioSolutions
is the acquisition of an asset and not of a business. The license agreement and shareholder loans have been accounted
for and recorded at historical cost. Concurrently
with the closing of the Agreement, the Company closed a private offering of our Series B-2 Preferred Stock. The Company
sold a total of 2,084,000 shares of Series B-2 Preferred Stock at an offering price of $0.25 per share, for an aggregate subscription
price of $521,000. The Company originally reported a total of 2,884,000 shares of Series B-2 preferred stock being issued in the
offering. Due to: (i) an anticipated investment for 1,000,000 shares which was not made, and (ii) an additional subscription for
200,000 shares for which documentation had not been completed, however, the final total issued shares of Series B-2 Preferred
Stock was 2,084,000. The shares sold in the offering included 400,000 shares of Series B-2 preferred stock issued to
extinguish $100,000 loan and 204,000 shares of Series B-2 preferred stock issued to former creditors of Exactus BioSolutions in
exchange for their release of $51,000 in debt owed by Exactus. After accounting for these issuances, our net cash proceeds
from the offering were $370,000. No underwriting discounts or commissions have been or will be paid in connection with
the sale of our Series B-2 Preferred Stock. Also on February
29, 2016, the Company entered into Exchange Agreements with certain holders of our common stock holding an aggregate of 393,314
post-split (11,636,170 pre-split) shares of common stock. Under the Exchange Agreements, these shareholders exchanged
their common stock for a total of 4,558,042 shares of our Series A Preferred Stock. These exchanges consisted of: (i) thirteen
common stock holders holding 10,894,070 (pre-split) shares of common stock who exchanged their common stock for 3,458,042 shares
Series A Preferred Stock, resulting in a (pre-split) exchange ratio of approximately 1 for 3.15, and (ii) one shareholder who,
under a separately negotiated agreement, exchanged 742,100 (pre-split) shares common stock for 1,100,000 shares of Series A Preferred
Stock, resulting at a (pre-split) exchange ratio of approximately 1.48 for 1. Immediately following such share exchanges,
the Company repurchased 50,000 shares of Series A Preferred Stock from a shareholder for a total price of $50,000. Reverse
Stock Split Effective
March 22, 2016, the Company performed a reverse split of our common stock on a 1 for 29.5849 basis, pursuant to the prior approval
by our Board of Directors and a majority of our shareholders. On March 22, 2016, the effective date of the reverse
split, we had approximately 121,978 shares of common stock issued and outstanding. The par value of the common stock was unchanged
at $0.0001 per share, post-split. All per share information in the condensed financial statements gives retroactive effect to
the 1 for 29.5849 reverse stock split that was effected on March 22, 2016. Preferred
Stock The
Companys authorized preferred stock consists of 50,000,000 shares with a par value of $0.0001. On February 17,
2016, our Board of Directors voted to designate a class of preferred stock entitled Series A Preferred Stock, consisting of up
to five million (5,000,000) shares, par value $0.0001. The shares of Series A Preferred Stock were automatically converted
to 4,508,042 shares of common stock thirty (30) days after the closing of the acquisition and the minimum private offering of
our Series B-2 Preferred Stock. As a result, there are no Series A preferred stock issued and outstanding as of March
31, 2016. Also
on February 17, 2016, our Board of Directors voted to designate a class of preferred stock entitled Series B-2 Convertible Preferred
Stock (Series B Preferred Stock), consisting of up to six million (6,000,000) shares, par value $0.0001, with a
stated value of $0.25 per share. With respect to rights on liquidation, winding up and dissolution, holders of Series
B-2 Preferred Stock will be paid in cash in full, before any distribution is made to any holder of common or other classes of
capital stock, an amount of $0.25 per share. Shares of Series B-2 Preferred Stock have no dividend rights except as may be declared
by the Board in its sole and absolute discretion, out of funds legally available for that purpose. Shares of Series B-2 Preferred
Stock are convertible, at the option of the holder, into shares of our common stock on a one (1) for one (1) basis. Holders
of Series B-2 Preferred Stock have the right to vote as-if-converted to common stock all matters submitted to a vote of holders
of the Companys common stock. On
February 29, 2016, our Board of Directors voted to designate a class of preferred stock entitled Series B-1 Convertible Preferred
Stock (Series B-1 Preferred Stock), consisting of up to thirty-two million (32,000,000) shares, par value $0.0001. With
respect to rights on liquidation, winding up and dissolution, the Series B-1 Preferred Stock ranks pari passu to the
class of common stock. Shares of Series B-1 Preferred Stock have no dividend rights except as may be declared by the Board in
its sole and absolute discretion, out of funds legally available for that purpose. Shares of Series B-1 Preferred Stock are convertible,
at the option of the holder, into shares of our common stock on a one (1) for one (1) basis. Holders of Series B-1 Preferred Stock
have the right to vote as-if-converted to common stock on all matters submitted to a vote of holders of the Companys common
stock. As
of March 31, 2016, 2,084,000 Preferred Series B-2 were issued and outstanding and 30,000,000 of Preferred Series B-1 were issued
and outstanding. As of December 31, 2015, no shares of Preferred Stock were issued or outstanding. Common
Stock The
Companys authorized common stock consists of 200,000,000 shares with a par value of $0.0001. The
Company automatically converted Preferred Series A shares to common stock as of March 30, 2016. As a result, 4,508,042
shares of common stock were issued in exchange of 4,508,042 shares of Series A Preferred Stock. With
the reverse stock split and conversion of Series A Preferred Stock shares to common stock, there were 4,630,018 and 515,290 common
shares issued and outstanding at March 31, 2016 and December 31, 2015,, respectively. Warrants
and Options There
are no warrants or options outstanding to acquire any additional shares of common stock of the Company. |
