Author: Newsdesk

Third Quarter Total Revenues of
$1.11
Billion, Up
17.9%
Year Over Year

Subscription Revenue
of
$968.5
Million, Up
21.3%
Year Over Year

Subscription Revenue Backlog
of $8.87 Billion, Up 23.
4
%
Year Over Year

PLEASANTON, Calif., Nov. 19, 2020 (GLOBE NEWSWIRE) — Workday, Inc. (NASDAQ: WDAY), a leader in enterprise cloud applications for finance and human resources, today announced results for the fiscal 2021 third quarter ended Oct. 31, 2020.

Fiscal 2021 Third Quarter Results

• Total revenues were $1.11 billion, an increase of 17.9% from the third quarter of fiscal 2020. Subscription revenue was $968.5 million, an increase of 21.3% from the same period last year.
• Operating loss was $14.1 million, or negative 1.3% of revenues, compared to an operating loss of $110.3 million, or negative 11.8% of revenues, in the same period last year. Non-GAAP operating income for the third quarter was $268.1 million, or 24.2% of revenues, compared to a non-GAAP operating income of $142.6 million, or 15.2% of revenues, in the same period last year.¹
• Net loss per basic and diluted share was $0.10, compared to a net loss per basic and diluted share of $0.51 in the third quarter of fiscal 2020. Non-GAAP net income per diluted share was $0.86, compared to a non-GAAP net income per diluted share of $0.53 in the same period last year.²
• Operating cash flows were $293.8 million compared to $258.0 million in the prior year.
• Cash, cash equivalents, and marketable securities were $2.95 billion as of Oct. 31, 2020.

Comments on the News

“It was another strong quarter across our product portfolio with continued momentum in financial management – which has now reached 1,000 customers. We also had some of our largest Workday Human Capital Management go-lives to-date and record customer demand on the strategic sourcing front,” said Aneel Bhusri, co-founder and co-CEO, Workday. “In this rapidly changing environment, the value of Workday in helping businesses drive and support change is clear, as more organizations focus on digital acceleration in order to meet the demands of the year and beyond. I continue to be so impressed and appreciative of our employees and customers – who are stepping up in such encouraging ways to navigate these challenging times.”

“In addition to several strategic wins in HR and finance, we also saw continued momentum selling into our existing customer base,” said Chano Fernandez, co-CEO, Workday. “Whether our employees were helping to innovate, drive awareness, close deals, or successfully supporting deployments – all in a fully virtual way – their commitment to our customers this quarter is evident, and I couldn’t be prouder. As we look ahead, I remain confident in our ability to capitalize on the growth opportunity in front of us while helping to take our customers to new heights.”

“We executed well in an uncertain environment and delivered strong results, with subscription revenue growth of 21.3% and non-GAAP operating margin of 24.2%,” said Robynne Sisco, president and chief financial officer, Workday. “Based on our strong third quarter, we are raising our fiscal 2021 subscription revenue guidance to a range of $3.773 billion to $3.775 billion. As we enter Q4, we are increasing our pace of investments to capitalize on the long-term opportunity that we see ahead.”

Recent Highlights

• Workday had more than 190 virtual customer go-lives – consisting of organizations using Workday as the core system of record for finance and human resources – in the third quarter. This includes Accenture, a leading global professional services company and Workday strategic partner, which is now live on Workday HCM, with more than 500,000 employees gaining greater visibility and simplified experiences as part of the organization’s ongoing digital business and HR transformation efforts.
• Workday 2020 Release 2 included the availability of Workday Accounting Center and machine learning-driven predictive forecasts for Workday Adaptive Planning, helping to bring new levels of visibility and control to the office of the chief financial officer. In addition, Workday made Workday Talent Marketplace available, which delivers skills-based talent matching that connects people with relevant work and growth opportunities.
• To further support equity in the workplace and in communities, Workday shared its commitments to social justice, and introduced two new offerings, VIBE Central^TM and VIBE Index^TM, to help organizations advance belonging and diversity initiatives.
• Workday was positioned by Gartner, Inc. in the Leaders quadrant of the 2020 Gartner Magic Quadrant for Cloud Financial Planning & Analysis Solutions³ for the fourth year in a row.
• Workday hosted a virtual conference, Conversations for a Changing World, which featured global changemakers, visionary CEO speakers, and sessions highlighting how customers can navigate the changing world with Workday.
• Scout RFP, a Workday company, is now Workday Strategic Sourcing, reflecting Workday’s commitment to elevate and help transform the office of procurement.
• Workday continues to support its employees through the COVID-19 pandemic with additional benefits, including modified schedules, caregiver flexibility, and financial aid through an employee relief fund. In addition, the majority of employees will not be required to return to their regular Workday office prior to Aug. 2, 2021. 

Earnings Call Details

Workday plans to host a conference call today to review its fiscal 2021 third quarter financial results and to discuss its financial outlook. The call is scheduled to begin at 1:30 p.m. PT/4:30 p.m. ET and can be accessed via webcast. The webcast will be available live, and a replay will be available following completion of the live broadcast for approximately 90 days.

Workday uses the Workday Blog as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

1		Non-GAAP operating income excludes share-based compensation expenses, employer payroll tax-related items on employee stock transactions, and amortization expense for acquisition-related intangible assets. See the section titled “About Non-GAAP Financial Measures” in the accompanying financial tables for further details.
2		Non-GAAP net income per share excludes share-based compensation expenses, employer payroll tax-related items on employee stock transactions, amortization expense for acquisition-related intangible assets, non-cash interest expense related to our convertible senior notes, and income tax effects. See the section titled “About Non-GAAP Financial Measures” in the accompanying financial tables for further details.
3		Gartner “Magic Quadrant for Cloud Financial Planning & Analysis Solutions,” by Greg Leiter, Robert Anderson, John Van Decker, 6 October 2020. Previously listed as Adaptive Insights since Workday announced its acquisition of the company in June 2018.

Required Disclaimer

Gartner does not endorse any vendor, product or service depicted in its research publications and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

About Workday

Workday is a leading provider of enterprise cloud applications for finance and human resources, helping customers adapt and thrive in a changing world. Workday applications for financial management, human resources, planning, spend management, and analytics have been adopted by thousands of organizations around the world and across industries – from medium-sized businesses to more than 45 percent of the Fortune 500. For more information about Workday, visit workday.com.

Use of Non-GAAP Financial Measures

Reconciliations of non-GAAP financial measures to Workday’s financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of the tables titled “About Non-GAAP Financial Measures.” A reconciliation of our forward outlook for non-GAAP operating margin with our forward-looking GAAP operating margin is not available without unreasonable efforts as the quantification of share-based compensation expense, which is excluded from our non-GAAP operating margin, requires additional inputs such as the number of shares granted and market prices that are not ascertainable.

Forward-Looking Statements

This press release contains forward-looking statements including, among other things, statements regarding Workday’s fiscal 2021 subscription revenue, investments, and ability to capitalize on growth opportunities, including over the long term. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “seek,” “plan,” “project,” “looking ahead,” “look to,” “move into,” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to risks, uncertainties, and assumptions. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Risks include, but are not limited to: (i) the impact of the ongoing COVID-19 pandemic on our business, as well as our customers, prospects, partners, and service providers; (ii) our ability to implement our plans, objectives, and other expectations with respect to any of our acquired companies; (iii) breaches in our security measures, unauthorized access to our customers’ or other users’ personal data, or disruptions in our data center or computing infrastructure operations; (iv) service outages, delays in the deployment of our applications, and the failure of our applications to perform properly; (v) our ability to manage our growth effectively; (vi) competitive factors, including pricing pressures, industry consolidation, entry of new competitors and new applications, advancements in technology, and marketing initiatives by our competitors; (vii) the development of the market for enterprise cloud applications and services; (viii) acceptance of our applications and services by customers and individuals, including any new features, enhancements, and modifications, as well as the acceptance of any underlying technology such as machine learning, artificial intelligence, and blockchain; (ix) adverse changes in general economic or market conditions; (x) the regulatory, economic, and political risks associated with our domestic and international operations; (xi) the regulatory risks related to new and evolving technologies such as machine learning, artificial intelligence, and blockchain; (xii) delays or reductions in information technology spending; and (xiii) changes in sales, which may not be immediately reflected in our results due to our subscription model. Further information on these and additional risks that could affect Workday’s results is included in our filings with the Securities and Exchange Commission (“SEC”), including our Form 10-Q for the fiscal quarter ended July 31, 2020, and our future reports that we may file with the SEC from time to time, which could cause actual results to vary from expectations. Workday assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release.

Any unreleased services, features, or functions referenced in this document, our website, or other press releases or public statements that are not currently available are subject to change at Workday’s discretion and may not be delivered as planned or at all. Customers who purchase Workday services should make their purchase decisions based upon services, features, and functions that are currently available.

© 2020 Workday, Inc. All rights reserved. Workday, VIBE Central, VIBE Index, Adaptive Insights, Scout, and the Workday Logo are trademarks or registered trademarks of Workday, Inc. registered in the United States and elsewhere. All other brand and product names are trademarks or registered trademarks of their respective holders.

Workday, Inc. Condensed Consolidated Balance Sheets (in thousands) (unaudited)
	October 31, 2020				January 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	1,067,038			$	731,141
Marketable securities	1,880,772				1,213,432
Trade and other receivables, net	742,744				877,578
Deferred costs	110,024				100,459
Prepaid expenses and other current assets	157,664				172,012
Total current assets	3,958,242				3,094,622
Property and equipment, net	976,610				936,179
Operating lease right-of-use assets	415,547				290,902
Deferred costs, noncurrent	232,413				222,395
Acquisition-related intangible assets, net	262,603				308,401
Goodwill	1,819,625				1,819,261
Other assets	179,987				144,605
Total assets	$	7,845,027			$	6,816,365
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	54,949			$	57,556
Accrued expenses and other current liabilities	129,794				130,050
Accrued compensation	264,443				248,154
Unearned revenue	2,000,417				2,223,178
Operating lease liabilities	84,552				66,147
Debt, current	1,091,050				244,319
Total current liabilities	3,625,205				2,969,404
Debt, noncurrent	701,178				1,017,967
Unearned revenue, noncurrent	68,874				86,025
Operating lease liabilities, noncurrent	352,900				241,425
Other liabilities	18,816				14,993
Total liabilities	4,766,973				4,329,814
Stockholders’ equity:
Common stock	240				231
Additional paid-in capital	6,184,070				5,090,187
Treasury stock	(269,083		)		—
Accumulated other comprehensive income (loss)	1,110				23,492
Accumulated deficit	(2,838,283		)		(2,627,359		)
Total stockholders’ equity	3,078,054				2,486,551
Total liabilities and stockholders’ equity	$	7,845,027			$	6,816,365

Workday, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share data) (unaudited)
	Three Months Ended October 31,								Nine Months Ended October 31,
	2020				2019				2020				2019
Revenues:
Subscription services	$	968,547			$	798,516			$	2,782,201			$	2,256,695
Professional services	137,413				139,584				404,111				394,212
Total revenues	1,105,960				938,100				3,186,312				2,650,907
Costs and expenses (1) :
Costs of subscription services	152,396				122,305				442,666				355,935
Costs of professional services	142,785				148,625				442,422				424,548
Product development	419,962				401,742				1,282,127				1,127,695
Sales and marketing	302,870				286,794				897,924				839,930
General and administrative	102,024				88,884				296,461				258,932
Total costs and expenses	1,120,037				1,048,350				3,361,600				3,007,040
Operating income (loss)	(14,077		)		(110,250		)		(175,288		)		(356,133		)
Other income (expense), net	(8,846		)		(4,136		)		(31,272		)		2,899
Loss before provision for (benefit from) income taxes	(22,923		)		(114,386		)		(206,560		)		(353,234		)
Provision for (benefit from) income taxes	1,417				1,343				4,164				(518		)
Net loss	$	(24,340	)		$	(115,729	)		$	(210,724	)		$	(352,716	)
Net loss per share, basic and diluted	$	(0.10	)		$	(0.51	)		$	(0.89	)		$	(1.56	)
Weighted-average shares used to compute net loss per share, basic and diluted	238,059				228,461				235,685				226,071

(1) Costs and expenses include share-based compensation expenses as follows:
Costs of subscription services	$	16,767			$	13,634			$	45,484			$	36,050
Costs of professional services	27,349				22,249				74,467				57,390
Product development	128,423				118,215				378,950				315,210
Sales and marketing	54,077				47,142				150,881				128,686
General and administrative	33,216				29,762				97,958				88,122

Workday, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited)
	Three Months Ended October 31,								Nine Months Ended October 31,
	2020				2019				2020				2019
Cash flows from operating activities:
Net loss	$	(24,340	)		$	(115,729	)		$	(210,724	)		$	(352,716	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	73,864				72,233				218,556				201,152
Share-based compensation expenses	259,832				231,002				747,740				625,149
Amortization of deferred costs	28,732				23,015				82,141				65,897
Amortization of debt discount and issuance costs	12,098				13,512				41,466				39,400
Non-cash lease expense	22,141				17,081				60,389				49,155
Other	(8,760		)		2,744				8,040				(8,953		)
Changes in operating assets and liabilities, net of business combinations:
Trade and other receivables, net	(53,923		)		2,197				127,663				86,139
Deferred costs	(41,823		)		(34,415		)		(101,724		)		(81,107		)
Prepaid expenses and other assets	25,898				7,463				36,738				677
Accounts payable	3,762				1,938				(9,313		)		4,488
Accrued expenses and other liabilities	(5,037		)		41,716				(46,378		)		6,595
Unearned revenue	1,358				(4,755		)		(239,899		)		(68,392		)
Net cash provided by (used in) operating activities	293,802				258,002				714,695				567,484
Cash flows from investing activities:
Purchases of marketable securities	(806,713		)		(375,144		)		(1,963,244		)		(1,429,046		)
Maturities of marketable securities	427,910				494,023				1,282,324				1,339,830
Sales of marketable securities	—				—				5,279				55,499
Owned real estate projects	(1,072		)		(21,832		)		(5,323		)		(95,615		)
Capital expenditures, excluding owned real estate projects	(78,197		)		(55,163		)		(204,692		)		(196,274		)
Business combinations, net of cash acquired	—				—				—				(12,885		)
Purchases of non-marketable equity and other investments	(4,618		)		(9,577		)		(63,218		)		(17,293		)
Sales and maturities of non-marketable equity and other investments	24				252				6,223				252
Other	—				—				—				(9		)
Net cash provided by (used in) investing activities	(462,666		)		32,559				(942,651		)		(355,541		)
Cash flows from financing activities:
Proceeds from borrowings on term loan, net	—				—				747,795				—
Payments on convertible senior notes	—				(3		)		(249,946		)		(30		)
Payments on term loan	(9,375		)		—				(9,375		)		—
Proceeds from issuance of common stock from employee equity plans	3,650				1,780				78,167				63,320
Other	(181		)		(175		)		(2,436		)		(375		)
Net cash provided by (used in) financing activities	(5,906		)		1,602				564,205				62,915
Effect of exchange rate changes	40				48				546				(204		)
Net increase (decrease) in cash, cash equivalents, and restricted cash	(174,730		)		292,211				336,795				274,654
Cash, cash equivalents, and restricted cash at the beginning of period	1,246,246				624,646				734,721				642,203
Cash, cash equivalents, and restricted cash at the end of period	$	1,071,516			$	916,857			$	1,071,516			$	916,857

Workday, Inc. Reconciliation of GAAP to Non-GAAP Data Three Months Ended October 31, 2020 (in thousands, except percentages and per share data) (unaudited)
	GAAP				Share-Based Compensation Expenses				Other Operating Expenses  (2)				Amortization of Convertible Senior Notes Debt Discount and Issuance Costs				Income Tax and Dilution Effects (3)				Non-GAAP
Costs and expenses:
Costs of subscription services	$	152,396			$	(16,767	)		$	(7,811	)		$	—			$	—			$	127,818
Costs of professional services	142,785				(27,349		)		(824		)		—				—				114,612
Product development	419,962				(128,423		)		(4,006		)		—				—				287,533
Sales and marketing	302,870				(54,077		)		(8,352		)		—				—				240,441
General and administrative	102,024				(33,216		)		(1,355		)		—				—				67,453
Operating income (loss)	(14,077		)		259,832				22,348				—				—				268,103
Operating margin	(1.3		)%		23.5		%		2.0		%		—		%		—		%		24.2		%
Other income (expense), net	(8,846		)		—				—				11,988				—				3,142
Income (loss) before provision for (benefit from) income taxes	(22,923		)		259,832				22,348				11,988				—				271,245
Provision for (benefit from) income taxes	1,417				—				—				—				50,119				51,536
Net income (loss)	$	(24,340	)		$	259,832			$	22,348			$	11,988			$	(50,119	)		$	219,709
Net income (loss) per share (1)	$	(0.10	)		$	1.09			$	0.09			$	0.05			$	(0.27	)		$	0.86

(1)		GAAP net loss per share is calculated based upon 238,059 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 254,176 diluted weighted-average shares of common stock.
(2)		Other operating expenses include amortization of acquisition-related intangible assets of $14.2 million and total employer payroll tax-related items on employee stock transactions of $8.1 million.
(3)		We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2021, we determined the projected non-GAAP tax rate to be 19%. Included in this is a dilution impact of $0.06 from the conversion of basic net income (loss) per share to diluted net income (loss) per share.

Workday, Inc. Reconciliation of GAAP to Non-GAAP Data Three Months Ended October 31, 2019 (in thousands, except percentages and per share data) (unaudited)
	GAAP				Share-Based Compensation Expenses				Other Operating Expenses  (2)				Amortization of Convertible Senior Notes Debt Discount and Issuance Costs				Income Tax and Dilution Effects (3)				Non-GAAP
Costs and expenses:
Costs of subscription services	$	122,305			$	(13,634	)		$	(7,593	)		$	—			$	—			$	101,078
Costs of professional services	148,625				(22,249		)		(569		)		—				—				125,807
Product development	401,742				(118,215		)		(4,420		)		—				—				279,107
Sales and marketing	286,794				(47,142		)		(7,820		)		—				—				231,832
General and administrative	88,884				(29,762		)		(1,453		)		—				—				57,669
Operating income (loss)	(110,250		)		231,002				21,855				—				—				142,607
Operating margin	(11.8		)%		24.6		%		2.4		%		—		%		—		%		15.2		%
Other income (expense), net	(4,136		)		—				—				13,511				—				9,375
Income (loss) before provision for (benefit from) income taxes	(114,386		)		231,002				21,855				13,511				—				151,982
Provision for (benefit from) income taxes	1,343				—				—				—				24,494				25,837
Net income (loss)	$	(115,729	)		$	231,002			$	21,855			$	13,511			$	(24,494	)		$	126,145
Net income (loss) per share (1)	$	(0.51	)		$	1.01			$	0.10			$	0.06			$	(0.13	)		$	0.53

(1)		GAAP net loss per share is calculated based upon 228,461 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 240,041 diluted weighted-average shares of common stock.
(2)		Other operating expenses include amortization of acquisition-related intangible assets of $15.9 million and total employer payroll tax-related items on employee stock transactions of $5.9 million.
(3)		We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2020, the projected non-GAAP tax rate was 17%. Included in the per share amount is a dilution impact of $0.02 from the conversion of basic net income (loss) per share to diluted net income (loss) per share.

Workday, Inc. Reconciliation of GAAP to Non-GAAP Data Nine Months Ended October 31, 2020 (in thousands, except percentages and per share data) (unaudited)
	GAAP				Share-Based Compensation Expenses				Other Operating Expenses  (2)				Amortization of Convertible Senior Notes Debt Discount and Issuance Costs				Income Tax and Dilution Effects (3)				Non-GAAP
Costs and expenses:
Costs of subscription services	$	442,666			$	(45,484	)		$	(26,298	)		$	—			$	—			$	370,884
Costs of professional services	442,422				(74,467		)		(4,843		)		—				—				363,112
Product development	1,282,127				(378,950		)		(20,710		)		—				—				882,467
Sales and marketing	897,924				(150,881		)		(26,841		)		—				—				720,202
General and administrative	296,461				(97,958		)		(5,111		)		—				—				193,392
Operating income (loss)	(175,288		)		747,740				83,803				—				—				656,255
Operating margin	(5.5		)%		23.5		%		2.6		%		—		%		—		%		20.6		%
Other income (expense), net	(31,272		)		—				—				41,209				—				9,937
Income (loss) before provision for (benefit from) income taxes	(206,560		)		747,740				83,803				41,209				—				666,192
Provision for (benefit from) income taxes	4,164				—				—				—				122,412				126,576
Net income (loss)	$	(210,724	)		$	747,740			$	83,803			$	41,209			$	(122,412	)		$	539,616
Net income (loss) per share (1)	$	(0.89	)		$	3.17			$	0.36			$	0.17			$	(0.66	)		$	2.15

(1)		GAAP net loss per share is calculated based upon 235,685 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 251,517 diluted weighted-average shares of common stock.
(2)		Other operating expenses include amortization of acquisition-related intangible assets of $45.8 million and total employer payroll tax-related items on employee stock transactions of $38.0 million.
(3)		We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2021, we have determined the projected non-GAAP tax rate to be 19%. Included in the per share amount is a dilution impact of $0.14 from the conversion of basic net income (loss) per share to diluted net income (loss) per share.

Workday, Inc. Reconciliation of GAAP to Non-GAAP Data Nine Months Ended October 31, 2019 (in thousands, except percentages and per share data) (unaudited)
	GAAP				Share-Based Compensation Expenses				Other Operating Expenses (2)				Amortization of Convertible Senior Notes Debt Discount and Issuance Costs				Income Tax and Dilution Effects (3)				Non-GAAP
Costs and expenses:
Costs of subscription services	$	355,935			$	(36,050	)		$	(31,992	)		$	—			$	—			$	287,893
Costs of professional services	424,548				(57,390		)		(5,261		)		—				—				361,897
Product development	1,127,695				(315,210		)		(23,431		)		—				—				789,054
Sales and marketing	839,930				(128,686		)		(31,103		)		—				—				680,141
General and administrative	258,932				(88,122		)		(6,772		)		—				—				164,038
Operating income (loss)	(356,133		)		625,458				98,559				—				—				367,884
Operating margin	(13.4		)%		23.6		%		3.7		%		—		%		—		%		13.9		%
Other income (expense), net	2,899				—				—				39,399				—				42,298
Income (loss) before provision for (benefit from) income taxes	(353,234		)		625,458				98,559				39,399				—				410,182
Provision for (benefit from) income taxes	(518		)		—				—				—				70,249				69,731
Net income (loss)	$	(352,716	)		$	625,458			$	98,559			$	39,399			$	(70,249	)		$	340,451
Net income (loss) per share (1)	$	(1.56	)		$	2.77			$	0.44			$	0.17			$	(0.41	)		$	1.41

(1)		GAAP net loss per share is calculated based upon 226,071 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 240,657 diluted weighted-average shares of common stock.
(2)		Other operating expenses include amortization of acquisition-related intangible assets of $54.8 million and total employer payroll tax-related items on employee stock transactions of $43.7 million.
(3)		We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2020, the projected non-GAAP tax rate was 17%. Included in the per share amount is a dilution impact of $0.10 from the conversion of basic net income (loss) per share to diluted net income (loss) per share.

About Non-GAAP Financial Measures

To provide investors and others with additional information regarding Workday’s results, we have disclosed the following non-GAAP financial measures: non-GAAP operating income (loss) and non-GAAP net income (loss) per share. Workday has provided a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. Non-GAAP operating income (loss) differs from GAAP in that it excludes share-based compensation expenses, employer payroll tax-related items on employee stock transactions, and amortization expense for acquisition-related intangible assets. Non-GAAP net income (loss) per share differs from GAAP in that it excludes share-based compensation expenses, employer payroll tax-related items on employee stock transactions, amortization expense for acquisition-related intangible assets, non-cash interest expense related to our convertible senior notes, and income tax effects.

Workday’s management uses these non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short- and long-term operating plans, and to evaluate Workday’s financial performance. Management believes these non-GAAP financial measures reflect Workday’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in Workday’s business. Management also believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating Workday’s operating results and prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies.

Management believes excluding the following items from the GAAP Condensed Consolidated Statements of Operations is useful to investors and others in assessing Workday’s operating performance due to the following factors:

• Share-based compensation expenses. Although share-based compensation is an important aspect of the compensation of our employees and executives, management believes it is useful to exclude share-based compensation expenses to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies. Share-based compensation expenses are determined using a number of factors, including our stock price, volatility, and forfeiture rates, that are beyond our control and generally unrelated to operational decisions and performance in any particular period. Further, share-based compensation expenses are not reflective of the value ultimately received by the grant recipients.

• Other operating expenses. Other operating expenses includes employer payroll tax-related items on employee stock transactions and amortization of acquisition-related intangible assets. The amount of employer payroll tax-related items on employee stock transactions is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of the business. For business combinations, we generally allocate a portion of the purchase price to intangible assets. The amount of the allocation is based on estimates and assumptions made by management and is subject to amortization. The amount of purchase price allocated to intangible assets and the term of its related amortization can vary significantly and are unique to each acquisition and thus we do not believe it is reflective of ongoing operations.

• Amortization of convertible senior notes debt discount and issuance costs. Under GAAP, we are required to separately account for liability (debt) and equity (conversion option) components of the convertible senior notes that were issued in private placements in June 2013 and September 2017. Accordingly, for GAAP purposes we are required to recognize the effective interest expense on our convertible senior notes and amortize the issuance costs over the term of the notes. The difference between the effective interest expense and the contractual interest expense, and the amortization expense of issuance costs are excluded from management’s assessment of our operating performance because management believes that these non-cash expenses are not indicative of ongoing operating performance. Management believes that the exclusion of the non-cash interest expense provides investors an enhanced view of Workday’s operational performance.

• Income tax effects. We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. In projecting this long-term non-GAAP tax rate, we utilize a three-year financial projection that excludes the direct impact of share-based compensation and related employer payroll taxes, amortization of acquisition-related intangible assets, and amortization of debt discount and issuance costs. The projected rate considers other factors such as our current operating structure, existing tax positions in various jurisdictions, and key legislation in major jurisdictions where we operate. For fiscal 2020, we determined the projected non-GAAP tax rate to be 17%. For fiscal 2021, we determined the projected non-GAAP tax rate to be 19%, which reflects currently available information, as well as other factors and assumptions. We will periodically re-evaluate this tax rate, as necessary, for significant events, based on our ongoing analysis of the 2017 U.S. Tax Cuts and Jobs Act, relevant tax law changes, material changes in the forecasted geographic earnings mix, and any significant acquisitions.

The use of non-GAAP operating income (loss) and non-GAAP net income (loss) per share measures have certain limitations as they do not reflect all items of income and expense that affect Workday’s operations. Workday compensates for these limitations by reconciling the non-GAAP financial measures to the most comparable GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, measures prepared in accordance with GAAP. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. Management encourages investors and others to review Workday’s financial information in its entirety and not rely on a single financial measure.

Investor Relations Contact:

Justin Furby
[email protected]

Media Contact:

Nina Oestlien
[email protected]

 

       Ottawa, Illinois, Nov. 19, 2020 (GLOBE NEWSWIRE) — Ottawa Bancorp, Inc. (OTCQX: OTTW) (the “Company”), the holding company for Ottawa Savings Bank, FSB (the “Bank”), announced today that it has approved a stock repurchase program authorizing the purchase of 297,047 shares, representing 10% of the Company’s outstanding shares of common stock.  As of September 30, 2020, the Company has repurchased a total of 524,341 shares of its common stock at an average price of $12.93 per share as part of the stock repurchase program approved on November 20, 2019 and its previous stock repurchase programs that expired in November 2018 and November 2019.  Repurchases will be conducted through open market purchases, which may include purchases under a trading plan adopted pursuant to Securities and Exchange Commission Rule 10b5-1, or through privately negotiated transactions.  Repurchases will be made from time to time depending on market conditions and other factors. 

About Ottawa Bancorp, Inc.

      Ottawa Bancorp, Inc. is the holding company for Ottawa Savings Bank, FSB which provides various financial services to individual and corporate customers in the United States. The Bank offers various deposit accounts, including checking, money market, regular savings, club savings, certificate, and various retirement accounts. Its loan portfolio includes one-to-four family residential mortgage, multi-family and non-residential real estate, commercial, and construction loans as well as auto loans and home equity lines of credit. Ottawa Savings Bank, FSB was founded in 1871 and is headquartered in Ottawa, Illinois. For more information about the Company and the Bank, please visit www.ottawasavings.com.

Cautionary Statement Regarding Forward-Looking Statements

      The foregoing material may contain forward-looking statements concerning the financial condition, results of operations and business of the Company.  We caution that such statements are subject to a number of uncertainties and actual results could differ materially and, therefore, readers should not place undue reliance on any forward-looking statements.  The Company does not undertake, and specifically disclaims, any obligation to publicly release the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

Contact:     
    
Craig M. Hepner
President and Chief Executive Officer
(815) 366-5437

Completed


Successful $


8


0


million


Public


Offering

Presented


Encouraging Data


for NUC-3373 and NUC-7738


at


the


ESMO


Virtual Congress 2020

EDINBURGH, United Kingdom, Nov. 19, 2020 (GLOBE NEWSWIRE) — NuCana plc (NASDAQ: NCNA) announced financial results for the third quarter ended September 30, 2020 and provided an update on its broad clinical program with its transformative ProTide therapeutics.

As of September 30, 2020, NuCana had cash and cash equivalents of £100.7 million compared to £47.8 million at June 30, 2020 and £52.0 million at December 31, 2019. This cash balance includes the net proceeds from NuCana’s public offering in September 2020. NuCana continues to advance its various clinical programs and reported a net loss of £8.4 million for the quarter ended September 30, 2020, as compared to £3.9 million for the quarter ended September 30, 2019. Basic and diluted loss per share was £0.24 for the quarter as compared to £0.12 per share for the prior-year quarter.

“We are very pleased with our achievements during the third quarter,” said Hugh S. Griffith, NuCana’s Founder and Chief Executive Officer. “We significantly augmented our financial position with the successful completion of this public offering, supporting our progress towards several important milestones. These milestones include filing a New Drug Application (“NDA”) for Acelarin in biliary tract cancer, filing an NDA for NUC-3373 in colorectal cancer, and completing a Phase II clinical study for NUC-7738, in each case subject to regulatory feedback and clinical outcomes.”

Mr. Griffith continued: “We also presented encouraging data at the ESMO Virtual Congress 2020, including a poster highlighting interim data from the ongoing Phase Ib study of NUC-3373 in combination with other agents typically combined with 5-FU in patients with advanced colorectal cancer (NuTide:302) and a poster detailing the first-ever clinical data from the ongoing Phase I study of NUC-7738 in patients with advanced solid tumors (NuTide:701). We believe the data from the NuTide:302 study support the potential of NUC-3373 to improve progression-free survival in patients who had relapsed or were refractory to prior 5-FU-containing regimens. We also believe these data show NUC-3373’s potential to offer enhanced efficacy, an improved safety profile and a more convenient dosing regimen as compared to 5-FU. With respect to NUC-7738, we believe the interim data from the NuTide:701 study demonstrate that NUC-7738 has a favorable pharmacokinetic and tolerability profile and is showing encouraging anti-cancer activity.”

Mr. Griffith concluded, “We continue to drive recruitment in all of our ongoing studies and remain focused on our mission of developing safer and more effective medicines for patients with cancer.”

Anticipated
2021
Milestones

• Acelarin is a ProTide transformation of gemcitabine. In 2021, NuCana expects to:

  °  Complete recruitment to enable the first interim analysis of the Phase III study of Acelarin combined with cisplatin as a first-line treatment for patients with advanced biliary tract cancer.

• NUC-3373 is a ProTide transformation of the active anti-cancer metabolite of 5-FU. In 2021, NuCana expects to:

  °  Report data from the Phase Ib study (NuTide:302) of NUC-3373 in combination with other agents with which 5-FU is typically combined, such as leucovorin, oxaliplatin and irinotecan in patients with advanced colorectal cancer.
  °  Initiate and report data from a Phase Ib expansion / Phase II study of NUC-3373 in combination with other agents for patients with colorectal cancer.
  °  Initiate a Phase III study of NUC-3373 in combination with other agents for patients with colorectal cancer.
  °  Report data from the ongoing Phase I study (NuTide:301) of NUC-3373 in patients with advanced solid tumors.

• NUC-7738 is a ProTide transformation of a novel nucleoside analog, 3’-deoxyadenosine. In 2021, NuCana expects to:

  °  Report data from the Phase I study (NuTide:701) of NUC-7738 in patients with advanced solid tumors.
  °  Initiate a Phase II study of NUC-7738 in patients with solid tumors.

About NuCana plc

NuCana is a clinical-stage biopharmaceutical company focused on significantly improving treatment outcomes for cancer patients by applying our ProTide technology to transform some of the most widely prescribed chemotherapy agents, nucleoside analogs, into more effective and safer medicines. While these conventional agents remain part of the standard of care for the treatment of many solid and hematological tumors, their efficacy is limited by cancer cell resistance mechanisms and they are often poorly tolerated. Utilizing our proprietary technology, we are developing new medicines, ProTides, designed to overcome key cancer resistance mechanisms and generate much higher concentrations of anti-cancer metabolites in cancer cells. NuCana’s robust pipeline includes three ProTides in clinical development. Acelarin and NUC-3373, are new chemical entities derived from the nucleoside analogs gemcitabine and 5-fluorouracil, respectively, two widely used chemotherapy agents. Acelarin is currently being evaluated in four clinical studies, including a Phase III study for patients with biliary tract cancer, a Phase Ib study for patients with biliary tract cancer, a Phase II study for patients with platinum-resistant ovarian cancer and a Phase III study for patients with metastatic pancreatic cancer for which enrollment has been suspended. NUC-3373 is currently in a Phase I study for the potential treatment of a wide range of advanced solid tumors and a Phase Ib study for patients with metastatic colorectal cancer. Our third ProTide, NUC-7738, is a transformation of a novel nucleoside analog (3’-deoxyadenosine) and is in a Phase I study for patients with advanced solid tumors.

Forward-Looking Statements

This press release may contain “forward‐looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on the beliefs and assumptions and on information currently available to management of NuCana plc (the “Company”). All statements other than statements of historical fact contained in this press release are forward-looking statements, including statements concerning
the sufficiency of the Company’s current cash and cash equivalents;
the Company’s planned and ongoing clinical studies for the Company’s product candidates and the potential advantages of those product candidates, including Acelarin, NUC-3373 and NUC-7738; the initiation, enrollment, timing, progress, release of data from and results of those planned and ongoing clinical studies;
the impact of COVID-19 on its preclinical studies, clinical
studies
, business, financial condition and results of operations
;
the Company’s goals with respect to the development and potential use, if approved, of each of its product candidates;
and the utility of prior non-clinical and clinical data in determining future clinical results. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to,
the fact that the Company’s expectations as to the sufficiency of the Company’s current cash and cash equivalents to fund its planned operations excludes any potential costs related to pre-commercial activities or, if approved, commercialization costs, as well as
the risks and uncertainties set forth in the “Risk Factors” section of the Company’s Annual Report on Form 20-F for the year ended December 31,
2019 filed with the Securities and Exchange Commission (“SEC”) on March 10, 2020, and subsequent repo
rts that the Company files with the SEC. Forward-looking statements represent the Company’s beliefs and assumptions only as of the date of this press release. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, the Company assumes no obligation to publicly update any forward‐looking statements for any reason after the date of this press release to conform any of the forward-looking statements to actual results or
to changes in its expectation
s.

Unaudited Condensed
Consolidated Statement
s
of Operations

	For the three months ended September 30,					For the nine months ended September 30,
	2020		201 9			2020		201 9
	(in thousands, except per share data)
	£		£			£		£
Research and development expenses	(6,117	)	(4,845	)		(17,918	)	(14,551	)
Administrative expenses	(1,906	)	(1,423	)		(5,144	)	(4,231	)
Net foreign exchange (losses) gains	(1,601	)	1,227			610		1,191
Operating loss	( 9,624	)	( 5,041	)		( 22,452	)	( 17,591	)
Finance income	26		252			234		867
Loss before tax	( 9,598	)	( 4,789	)		( 22,218	)	( 16,724	)
Income tax credit	1,204		912			3,797		3,020
Loss for the period	( 8,394	)	( 3,877	)		(1 8,421	)	( 13,704	)
Basic and diluted loss per share	(0.24	)	(0.12	)		(0.55	)	(0.42	)

Unaudited Condensed
Consolidated Statements of Financial Position

	September 30 , 2020		December 31, 201 9
	(in thousands)
	£		£
Assets
Non-current assets
Intangible assets	4,686		3,960
Property, plant and equipment	1,281		1,109
Deferred tax asset	34		46
	6,001		5,115
Current assets
Prepayments, accrued income and other receivables	5,065		4,710
Current income tax receivable	8,140		8,481
Cash and cash equivalents	100,678		51,962
	113,883		65,153
Total assets	119,884		70,268
Equity and liabilities
Capital and reserves
Share capital and share premium	142,937		80,840
Other reserves	65,740		62,737
Accumulated deficit	(98,403	)	(80,055	)
Total equity attributable to equity holders of the Company	110, 274		63,522
Non-current liabilities
Provisions	46		26
Lease liabilities	441		538
	4 87		564
Current liabilities
Trade payables	4,190		2,412
Payroll taxes and social security	138		160
Lease liabilities	278		268
Accrued expenditure	4,517		3,342
	9, 123		6,182
Total liabilities	9, 610		6,746
Total equity and liabilities	119,884		70,268

Unaudited Condensed
Consolidated Statement
s
of Cash Flows

	For the nine months ended September 30,
	2020		201 9
	(in thousands)
	£		£
Cash flows from operating activities
Loss for the period	(18,421	)	(13,704	)
Adjustments for:
Income tax credit	(3,797	)	(3,020	)
Amortization and depreciation	667		522
Finance income	(234	)	(867	)
Interest expense on lease liabilities	20		–
Share-based payments	3,069		2,191
Net foreign exchange gains	(619	)	(1,228	)
	(19,315	)	(16,106	)
Movements in working capital:
Increase in prepayments, accrued income and other receivables	(408	)	(3,593	)
Increase (decrease) in trade payables	1,778		(300	)
Increase in payroll taxes, social security and accrued expenditure	1,153		8
Movements in working capital	2,523		(3,885	)
Cash used in operations	(1 6, 792	)	(1 9,991	)
Net income tax received	4,152		20
Net cash used in operating activities	( 12,6 40	)	(1 9,971	)
Cash flows from investing activities
Interest received	300		915
Payments for property, plant and equipment	(350	)	(29	)
Payments for intangible assets	(1,079	)	(988	)
Net cash used in investing activities	( 1,129	)	(1 02	)
Cash flows from financing activities
Payments of lease liabilities	(223	)	(146	)
Proceeds from issue of share capital – exercise of share options	15		117
Proceeds from issue of share capital	66,581		–
Share issue expenses	(4,499	)	–
Net cash from ( used in ) financing activities	61, 874		( 2 9	)
Net increase (decrease) in cash and cash equivalents	48,105		(20,102	)
Cash and cash equivalents at beginning of period	51,962		76,972
Effect of exchange rate changes on cash and cash equivalents	611		1,221
Cash and cash equivalents at end of period	100,678		58,091

For more information, please contact:

NuCana plc
Hugh S. Griffith
Chief Executive Officer
T: +44 131 357 1111
E: [email protected]

Westwicke, an ICR Company
Chris Brinzey
T: +1 339-970-2843
E: [email protected]

RooneyPartners
Marion Janic
T: +1 212-223-4017
E: [email protected]

 

WAUWATOSA, Wis., Nov. 19, 2020 (GLOBE NEWSWIRE) — On November 17, 2020 the Board of Directors of Waterstone Financial, Inc. (NASDAQ: WSBF) declared a special dividend of $0.30 per common share.

“This special dividend reflects our strong performance thus far during 2020, as well as our continued strong financial condition,” said Doug Gordon, CEO of Waterstone Financial, Inc. “While we have historically declared and paid a special dividend following the conclusion of a successful year, the magnitude of our year-to-date earnings has allowed us to accelerate the timing of this dividend, which would have otherwise been a component of our fiscal 2021 dividend plan. Our dedication to a robust dividend payout ratio demonstrates our commitment to delivering shareholder value and our continued efforts to actively manage our capital.”

The dividend is payable on December 8, 2020, to shareholders of record at the close of business on December 1, 2020.

About
Waterstone
Financial, Inc.

Waterstone Financial, Inc. is the savings and loan holding company for WaterStone Bank. WaterStone Bank was established in 1921 and offers a full suite of personal and business banking products. The Bank has branches in Wauwatosa/State St, Brookfield, Fox Point/North Shore, Franklin/Hales Corners, Germantown/Menomonee Falls, Greenfield/Loomis Rd, Milwaukee/Oklahoma Ave, Oak Creek/27^th St, Oak Creek/Howell Ave, Oconomowoc/Lake Country, Pewaukee, Waukesha, West Allis/Greenfield Ave, and West Allis/National Ave, Wisconsin. WaterStone Bank is the parent company to Waterstone Mortgage, which has the ability to lend in 48 states. For more information about WaterStone Bank, go to http://www.wsbonline.com.

Contact:

Mark R. Gerke
Chief Financial Officer
414.459.4012
[email protected] 

Third Quarter
and Recent
Highlights:

• Net revenues of $18.2 million, up 135.3% year-over-year
• Gross systems shipped of 10,077, up 91.7% year-over-year
• Return accrual rate of 25.2%, a 10.1 percentage point improvement year-over-year
• Gross margin of 70.1%, up 16.5 percentage points year-over-year
• Sales and marketing expense as a percent of net revenues of 67.9%, a 52.3 percentage point improvement year-over-year
• Loss from operations of ($7.6) million, compared to ($12.0) million in the third quarter of 2019
• Completed initial public offering of 9,029,629 shares of common stock on October 20, 2020, raising approximately $148 million in net proceeds

SAN JOSE, Calif., Nov. 19, 2020 (GLOBE NEWSWIRE) — Eargo, Inc. (Nasdaq: EAR), a medical device company on a mission to improve the quality of life of people with hearing loss, today reported its financial results for the third quarter ended September 30, 2020.

Christian Gormsen, President and CEO, said, “By all financial and operational measures, our performance in the third quarter of 2020 was very strong. Most importantly, we are helping more people hear better by offering both a revolutionary product and customer experience. Consumers continued to rapidly adopt our virtually invisible, rechargeable, completely-in-canal solution for hearing loss and our differentiated telecare model, which provides education, purchase and clinical support from the comfort and safety of home.”

“During the third quarter, we executed our strategy of efficient revenue growth through multi-channel marketing targeted at a diverse mix of consumers across cash pay, insurance and repeat customers. We expanded our national TV advertising, which built increased consumer awareness of Eargo while complementing our digital marketing to drive 91.7% year over year growth in gross systems shipped while leveraging sales and marketing spend. In addition, we delivered an improved customer return accrual rate and gross margin of 70.1%, all of which contributed to the continued scalability of our business.”

“We were also pleased to see hearing aid volumes sold through traditional brick and mortar clinics return to year-over-year growth in the third quarter, but even more pleased to see continued acceleration in our year-over-year gross systems shipped growth even as the clinics’ operations began to recover. We expect strong demand for Eargo as we head into the fourth quarter and holiday buying season, driving our expectation of approximately 97% full year 2020 net revenue growth. With approximately 43 million adults in the U.S. with hearing loss but only approximately 27% owning hearing aids, we believe we have barely scratched the surface of this large and underpenetrated market,” concluded Mr. Gormsen.

According to data collected by the Hearing Industries Association (HIA), private/commercial sector hearing aid unit sales in the third quarter of 2020 increased by 0.5% year-over-year, following 58.6% year-over-year decline in the second quarter of 2020. Despite the improvement in traditional clinic-based distribution, Eargo saw expanded awareness and continued consumer adoption of its telecare model, which eliminates the need for cumbersome visits to the clinic by offering an easy-to-use purchasing interface and convenient access to a highly trained clinical support team consisting of licensed hearing professionals.

Third


Quarter 2020 Financial Results


Net revenue was $18.2 million for the third quarter of 2020, compared to $7.7 million in the third quarter of 2019. The increase was driven by an increase in consumer adoption of the Eargo hearing aid system and a decrease in sales return accrual rate.

Gross profit for the third quarter of 2020 was $12.8 million compared to $4.2 million for the third quarter of 2019. Gross margin increased to 70.1% for the third quarter of 2020, compared with 53.6% for the third quarter of 2019. The increase was primarily due to higher average selling prices, driven by the shift in mix to our latest product innovation, Neo HiFi, and a decrease in sales returns as a percentage of gross systems shipped.

Total operating expenses were $20.4 million or 112.1% of net revenues, for the third quarter of 2020, compared with $16.2 million or 209.5% of net revenues, for the third quarter of 2019. The increase was primarily due to higher sales and marketing investments, personnel investments to scale the organization for continued growth, and expenses related to being a public company.

Sales and marketing expenses were $12.4 million or 67.9% of net revenues, for the third quarter of 2020, compared with $9.3 million or 120.2% of net revenues, for the third quarter of 2019.

Research and development expenses were $2.9 million or 15.8% of net revenues, for the third quarter of 2020, compared with $3.2 million or 41.6% of net revenues, for the third quarter of 2019.

General and administrative expenses were $5.2 million or 28.4% of net revenues for the third quarter of 2020, compared with $3.7 million or 47.6% of net revenues, for the third quarter of 2019.

Total stock-based compensation expenses were $1.4 million for the third quarter of 2020, compared with $0.5 million for the third quarter of 2019.

Loss from operations was ($7.6) million for the third quarter of 2020 compared with ($12.0) million for the third quarter of 2019.

Cash and cash equivalents were $70.2 million as of September 30, 2020, compared to $25.3 million as of September 30, 2019.

Initial Public Offering


Eargo closed its initial public offering of 9,029,629 shares of its common stock at a public offering price of $18.00 per share, which included 1,177,777 shares of common stock issued upon the exercise in full by the underwriters of their option to purchase additional shares, for total net proceeds from the offering of approximately $148 million. All of the shares of common stock were offered by Eargo. Eargo’s common stock began trading on The Nasdaq Global Select Market on October 16, 2020, under the ticker symbol “EAR.”

Full Year 2020 Financial Guidance


Eargo expects revenue for the full year 2020 of approximately $64.5 million, which represents approximately 97% growth over the company’s prior year revenue.

Conference Call and Web Cast Information


Eargo will host a conference call to discuss the third quarter financial results after market close on Thursday, November 19, 2020 at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time. The conference call can be accessed live over the phone (833) 649-1234 for U.S. callers or (914) 987-7293 for international callers, using conference ID: 2826509. The live webinar can be accessed at ir.eargo.com.

About Eargo

Eargo is a medical device company dedicated to improving the quality of life of people with hearing loss. Our innovative product and go-to-market approach address the major challenges of traditional hearing aid adoption, including social stigma, accessibility and cost. We believe our Eargo hearing aids are the first and only virtually invisible, rechargeable, completely-in-canal, FDA regulated, exempt Class I device for the treatment of hearing loss. Our differentiated, consumer-first solution empowers consumers to take control of their hearing. Consumers can purchase online or over the phone and get personalized and convenient consultation and support from licensed hearing professionals via phone, text, email or video chat. The Eargo solution is offered to consumers at approximately half the cost of competing hearing aids purchased through traditional channels in the United States.

The company’s 4^th generation product, the Eargo Neo HiFi, was launched in January and features improved capabilities across audio fidelity and bandwidth. The Eargo Neo HiFi is available for purchase here.

Related Links
http://eargo.com

Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. All statements other than statements of historical fact contained in this press release are forward-looking statements. These forward-looking statements include, but are not limited to, statements about: our 2020 revenue guidance; consumer adoption of our hearing loss solution and telecare model; the continued scalability of our business; expectations regarding strong demand for Eargo during the fourth quarter and holiday buying season; and the size of the hearing loss market and our ability to penetrate the market. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results and events to differ materially from those anticipated, including, but not limited to, risks and uncertainties related to: our expectations concerning additional orders by existing customers; our expectations regarding the potential market size and size of the potential consumer populations for our products and any future products, including our ability to increase insurance coverage of Eargo hearing aids; our ability to release new hearing aids and the anticipated features of any such hearing aids; developments and projections relating to our competitors and our industry, including competing products; our ability to maintain our competitive technological advantages against new entrants in our industry; the pricing of our hearing aids; our expectations regarding the ability to make certain claims related to the performance of our hearing aids relative to competitive products; our expectations with regard to changes in the regulatory landscape for hearing aid devices, including the implementation of the pending over-the-counter hearing aid pathway regulatory framework; and our estimates regarding the COVID-19 pandemic, including but not limited to, its duration and its impact on our business and results of operations. These and other risks are described in greater detail under the section titled “Risk Factors” contained in Eargo’s prospectus filed with the Securities and Exchange Commission (SEC) on October 19, 2020 pursuant to Rule 424(b) under the Securities Act and the company’s other filings with the SEC. Any forward-looking statements in this press release are made pursuant to the Private Securities Litigation Reform Act of 1995, as amended, and speak only as of the date of this press release. Except as required by law, the company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Contact

Nick Laudico
Vice President of Investor Relations
[email protected]

Media Contact

Brad Sheets
[email protected]

Eargo, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
(In thousands, except share and per share amounts)
		Three months ended September 30,								Nine months ended September 30,
			2020				2019				2020				2019
Revenue, net		$	18,186			$	7,730			$	46,776			$	22,175
Cost of revenue			5,434				3,583				15,295				11,033
Gross profit			12,752				4,147				31,481				11,142
Operating expenses:
Research and development			2,871				3,219				7,888				8,781
Sales and marketing			12,354				9,290				34,041				24,698
General and administrative			5,163				3,683				14,498				8,781
Total operating expenses			20,388				16,192				56,427				42,260
Loss from operations			(7,636	)			(12,045	)			(24,946	)			(31,118	)
Other income (expense), net:
Interest income			3				136				26				555
Interest expense			(279	)			(218	)			(1,422	)			(492	)
Other income (expense), net			(187	)			(30	)			(87	)			(84	)
Loss on extinguishment of debt			(1,627	)			—				(1,627	)			—
Total other income (expense), net			(2,090	)			(112	)			(3,110	)			(21	)
Loss before income taxes			(9,726	)			(12,157	)			(28,056	)			(31,139	)
Income tax provision			—				—				—				—
Net loss and comprehensive loss		$	(9,726	)		$	(12,157	)		$	(28,056	)		$	(31,139	)
Net income (loss) attributable to common stockholders, basic and diluted		$	—			$	(12,157	)		$	(18,216	)		$	(31,139	)
Net income (loss) per share attributable to common stockholders, basic and diluted		$	—			$	(46.26	)		$	(57.73	)		$	(122.74	)
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic and diluted			398,895				262,785				315,546				253,701

Eargo, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share and per share amounts)
		September 30,				December 31,
			2020				2019
ASSETS
Current assets:
Cash and cash equivalents			70,224				13,384
Accounts receivable, net			2,576				2,051
Inventories			3,289				2,880
Prepaid expenses and other current assets			1,379				1,598
Total current assets			77,468				19,913
Operating lease right-of-use assets			1,369				—
Property and equipment, net			6,946				5,400
Other assets			2,304				1,992
Total assets		$	88,087			$	27,305
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable		$	6,658			$	5,428
Accrued expenses			10,809				9,939
Long-term debt, current portion			—				4,800
Other current liabilities			2,079				1,717
Deferred revenue, current			441				406
Lease liability, current portion			1,097				—
Total current liabilities			21,084				22,290
Lease liability, noncurrent portion			412				—
Deferred revenue, noncurrent portion			17				269
Long-term debt, noncurrent portion			14,502				7,446
Convertible preferred stock warrant liability			544				396
Other liabilities			—				127
Total liabilities			36,559				30,528
Commitments and contingencies (Note 5)
Convertible preferred stock, $0.0001 par value; 73,108,323 and 36,269,166 shares authorized as of September 30, 2020 and December 31, 2019, respectively; 24,229,281 and 11,825,812 issued and outstanding as of September 30, 2020 and December 31, 2019, respectively			223,125				152,880
Stockholders’ deficit:
Common stock; $0.0001 par value; 110,000,000 and 55,190,000 shares authorized as of September 30, 2020 and December 31, 2019, respectively; 534,599 and 265,943 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively			—				—
Additional paid in capital			15,662				3,100
Accumulated deficit			(187,259	)			(159,203	)
Total stockholders’ deficit			(171,597	)			(156,103	)
Total liabilities, convertible preferred stock and stockholders’ deficit		$	88,087			$	27,305

Eargo, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
		Nine months ended September 30,
			2020				2019
Operating activities:
Net loss		$	(28,056	)		$	(31,139	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			1,805				1,011
Stock-based compensation			2,363				997
Non-cash interest expense and amortization of debt discount			1,178				200
Non-cash operating lease expense			838				—
Bad debt expense			2,135				44
Loss on extinguishment of debt			1,627				—
Change in fair value of warrant liability			(122	)			84
Change in fair value of derivative liability			206				—
Changes in operating assets and liabilities:
Accounts receivable			(2,660	)			(113	)
Inventories			(409	)			(1,110	)
Prepaid expenses and other current assets			219				(199	)
Other assets			963				(311	)
Accounts payable			579				(585	)
Accrued expenses			147				1,750
Other current liabilities			362				(172	)
Deferred revenue			(217	)			409
Operating lease liabilities			(883	)			—
Other liabilities			(127	)			(59	)
Net cash used in operating activities			(20,052	)			(29,193	)
Investing activities:
Purchases of property and equipment			(844	)			(1,616	)
Capitalized software development costs			(2,601	)			(1,017	)
Net cash used in investing activities			(3,445	)			(2,633	)
Financing activities:
Proceeds from stock options exercised			359				40
Proceeds from debt financing			15,000				5,000
Proceeds from convertible preferred stock issuance, net of issuance costs			67,867				865
Proceeds from issuance of convertible notes, net of issuance costs			10,053				—
Proceeds from PPP loan			4,574				—
Repayment of PPP loan			(4,574	)			—
Debt repayments			(12,720	)			—
Payments of deferred offering costs			(222	)			—
Net cash provided by financing activities			80,337				5,905
Net increase (decrease) in cash and cash equivalents and restricted cash			56,840				(25,921	)
Cash and cash equivalents and restricted cash at beginning of period			13,384				51,201
Cash and cash equivalents and restricted cash at end of period		$	70,224			$	25,280
Supplemental disclosure of cash flow information:
Cash paid for interest		$	253			$	275
Non-cash operating activities:
Lease liability obtained in exchange for right-of-use asset		$	2,392			$	—
Non-cash investing and financing activities:
Property and equipment and capitalized software costs in accounts payable and accrued liabilities		$	421			$	307
Deferred offering costs in accounts payable and accrued liabilities		$	1,053			$	—
Convertible preferred stock issuance costs included in accounts payable		$	600			$	—
Derivative liability in connection with issuance of convertible promissory notes on issuance		$	2,879			$	—
Issuance of Series E convertible preferred stock upon extinguishment of convertible notes		$	12,818			$	—
Settlement of derivative liability in connection with extinguishment of convertible notes		$	3,085			$	—
Issuance of convertible preferred stock warrants in connection with debt financing		$	270			$	41

 

 

 

TORONTO, Nov. 19, 2020 (GLOBE NEWSWIRE) — Golden Leaf Holdings Ltd. (CSE:GLH) (OTCQB:GLDFF) (“Golden Leaf” or the “Company”), a premier consumer-driven cannabis company specializing in retail, production, processing, wholesale, and distribution, today announced financial results for the third quarter ended September 30, 2020. All financial results are stated in US dollars, unless otherwise noted.

“Rallying off our strong performance in the second quarter, the third quarter reflects the results of continued revenue growth and cost reductions, exceptional vendor management and operational excellence,” stated Jeff Yapp, Chief Executive Officer of GLH. “In addition to this being our first cashflow-positive quarter, we have surpassed the total revenue generated in all of fiscal 2019 in just three quarters.”

The increase was led by another record quarter of Oregon revenues and heightened contribution from the Company’s out-of-state partnerships, primarily in California.

“Starting in the fall of 2019, GLH faced a slew of challenges including the loss of its primary vape line in 2019 during the vape ban,” said Yapp. “A widespread global pandemic, the ongoing period of social unrest in Portland and unprecedented wildfire activity in Western Oregon resulted in the temporary closure and evacuation of some of the Company’s facilities, as well as the evacuation of a handful of staff members from their homes. This provides even greater context for the performance that the GLH team has achieved throughout the year, now highlighted in this record third quarter performance. Today, I am proud to formally say, we’ve turned the corner.”

Q3 Financial Highlights:

• For the first time in its history, GLH reports positive cash flow from operations of $0.4M.
• Record quarterly revenues from continuing operations of $6.2M, an increase of 42% versus the third quarter of 2019 and 11% greater than the second quarter of 2020.
• Adjusted EBITDA loss of $173,000 for the three months ended September 30, 2020, an improvement of 78% over the prior quarter. Adjusted EBITDA is a non-IFRS measure, which the Company considers important in assessing operations. For a reconciliation of Adjusted EBITDA (non-IFRS) to income (loss) before income taxes, please see below.
• Record year-to-date revenue of $16.3M, an increase of 34% compared to the nine months ended September 30, 2019, surpassing total revenue for the entirety of 2019 in only three quarters.
• Adjusted EBITDA loss of $1.7M for the nine months ended September 30, 2020 compared to $5.1M for the nine months ended September 30, 2019, a 68% improvement.
• Gross profit before biological asset adjustments of $2.2M, an improvement of $0.7M or 47% compared to the prior quarter, and $0.7M or 49% compared to the 3 months ended September 30, 2019.
• Total operating expenses down 22% compared to the nine months ended September 30, 2019 and 3% compared to the 2^nd quarter of 2020, demonstrating continued cost containment while growing revenues. The Company has implemented additional cost savings measures beginning in the fourth quarter of 2020 which should result in incremental cost savings during the fourth quarter with no impact to revenues.
• Same store sales growth increased 26% compared to the third quarter of 2019 and 8% compared to the second quarter of 2020.
• Senior management demonstrated its commitment to the business by taking significant pay-cuts through the end of 2020 to help manage the current cash position.
• Subsequent to the third quarter, the Company announced that it restructured its debt with the founders of Chalice Farms, resulting in a reduction of 50% of the $5M cash obligation due in May of 2022 through a conversion of such amount into shares at US$0.06 per share, a premium to market price, and extension of the payment schedule of the remaining $2.5M over 60 months at a favorable interest rate. This demonstrates the support of our stakeholders and is a vote of confidence in the current management team’s successes and paves the way to addressing our debenture obligations in the coming months.
• Building on the momentum of the third quarter, the Company was Adjusted EBITDA positive in the month of October, based on unaudited results.

“We remain resilient and focused on continued channel growth and cost containment. Optimistically, we await future legislative outcomes that we hope will favor the cannabis industry,” said Yapp.

Disclaimer Regarding Preliminary Financial Information

The financial information presented in this news release for October 2020 is based on preliminary, unaudited financial statements prepared by management. Accordingly, such financial information may be subject to change. Such financial information is qualified in its entirety with reference to the Company’s audited financial statements for the year ended December 31, 2020, which is expected to be filed on SEDAR (www.sedar.com) on or before April 29, 2021. While the Company does not expect there to be any material changes to the October 2020 financial information presented in this news release, to the extent that it is inconsistent with the information contained in the Company’s audited financial statements for the year ended October 30, 2020, the financial information contained in this news release shall be deemed to be modified or superseded by the Company’s audited financial statements. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation for purposes of applicable securities laws.

Investor Conference Call

Golden Leaf Holdings – 2020 Third Quarter Earnings Call +


Virtual


Webinar

Golden Leaf management, led by Mr. John Varghese, Executive Chairman and Mr. Jeff Yapp, Chief Executive Officer, will hold a conference call on Thursday, November 19, 2020 at 4:15pm ET, to report its financial results for Q3 ended September 30, 2020 following immediately with a Virtual Webinar for a corporate update and a summary of Q3. Please click here to register and stream the call and the webinar immediately following, or use the following phone numbers:

Toll Free:		1-877-407-0784
Toll/International:		1-201-689-8560
Conference ID:		13711923

A live audio webcast will be available online on the Company’s website at www.goldenleafholdings.com where it will be archived for one year.

An audio replay of the conference call will be available through midnight Thursday, December 3, 2020 by dialing 1-844-512-2921 from the US or Canada, or 1-412-317-6671 from international locations. The conference ID is: 13711923.

About Golden Leaf Holdings

:

Golden Leaf Holdings is a premier consumer-driven cannabis company specializing in production, processing, wholesale, distribution and retail, with seven dispensaries in Portland, Oregon. The Company is committed to developing a dynamic portfolio built around the recognized brands of Chalice Farms, with a focus on health and wellness. Markets served include Oregon, California, Nevada and Washington. Visit glhmonthly.com for regular updates.

Investor Relations:

John Varghese
Executive Chairman
971-371-2685
[email protected]

Disclaimer: This press release contains “forward-looking information” within the meaning of applicable securities legislation. Forward-looking information includes, but is not limited to,
statements with respect to cost savings in the fourth quarter of 2020
,
statements with respect to the Company’s future business operations, the opinions or beliefs of management and future business goals. Generally, forward looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information. These risks include but are not limited to general business, economic and competitive uncertainties, regulatory risks, market risks, risks inherent in manufacturing and retail operations such as unforeseen costs and production shutdowns, difficulties in maintaining brand loyalty, and other risks of the cannabis industry. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking information. Forward-looking information is provided herein for the purpose of presenting information about management’s current expectations relating to the future and readers are cautioned that such information may not be appropriate for other purpose. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws. This press release does not constitute an offer of securities for sale in the United States, and such securities may not be offered or sold in the United States absent registration or an exemption from registration or an exemption from reg
istration.

Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

GOLDEN LEAF HOLDINGS LTD.
Interim Condensed Consolidated Statements of Financial Position (Unaudited)
As at September 30, 2020 and December 31, 2019
(Expressed in U.S. dollars)
		September 30, 2020				December 31, 2019
ASSETS
CURRENT
Cash		$	1,300,954			$	3,531,202
Accounts receivable	Note 5		219,004				167,178
Other receivables	Note 5		1,385,246				447,901
Income tax recoverable			–				74,034
Sales tax recoverable			128,074				271,866
Biological assets	Note 7		217,385				88,078
Inventory	Note 7		2,838,888				2,965,304
Prepaid expenses and deposits			376,075				325,329
Total current assets			6,465,626				7,870,892
Property, plant and equipment	Note 8		2,597,773				3,723,489
Notes receivable	Note 6		919,488				919,488
Right-of-use assets, net	Note 9		4,093,035				4,333,064
Intangible assets	Note 10		10,737,423				10,737,423
Goodwill	Note 10		4,056,172				4,056,172
Total assets			28,869,517				31,640,528
LIABILITIES
CURRENT
Accounts payable and accrued liabilities			3,129,717				1,564,982
Interest payable			540,860				125,900
Income taxes payable			1,465,353				–
Deferred income tax payable			248,852				248,852
Sales tax payable			449,878				187,520
Current portion of long-term debt	Note 12		108,939				82,404
Notes payable	Note 11		186,910				–
Lease liability	Note 12		852,769				843,238
Total current liabilities			6,983,278				3,052,896
Long term debt	Note 12		56,824				29,952
Long term lease liability	Note 12		4,132,024				4,090,806
Convertible debentures carried at fair value	Note 11		5,218,464				4,706,141
Consideration payable – cash portion	Note 12		4,429,880				4,218,866
Consideration payable – equity portion	Note 12		4,838,780				4,940,667
Total liabilities			25,659,250				21,039,328
SHAREHOLDERS’ EQUITY
Share capital	Note 13		148,222,848				147,763,499
Warrant reserve	Note 14		1,554,929				1,980,217
Share option reserve	Note 15		3,729,441				4,181,350
Contributed surplus			59,940				59,940
Deficit			(150,356,891	)			(143,383,806	)
Total shareholders’ equity			3,210,267				10,601,200
Total liabilities and shareholders’ equity		$	28,869,517			$	31,640,528

GOLDEN LEAF HOLDINGS LTD.
Interim Condensed Consolidated Statements of Operations and Comprehensive Loss
For the three and nine months ended September 30, 2020 and 2019
(Expressed in U.S. dollars)
		For the three months ended September 30,									For the nine months ended September 30,
			2020				2019					2020				2019
Revenues
Product sales	Note 20	$	5,765,970			$	4,342,000				$	15,318,207			$	12,002,495
Royalty and other revenue	Note 20		430,086				9,917					1,064,886				220,273
Total Revenue			6,196,056				4,351,917					16,383,093				12,222,768
Inventory expensed to cost of sales	Note 7, 20		4,033,002				2,897,220					11,038,401				7,878,386
Gross margin, excluding fair value items			2,163,054				1,454,697					5,344,692				4,344,382
Fair value changes in biological assets included
in inventory sold	Note 7, 20		(14,125	)			–					(48,483	)			–
Loss on changes in fair value of biological assets	Note 7, 20		98,853				–					295,009				–
Gross profit			2,078,326				1,454,697					5,098,166				4,344,382
Expenses:
General and administration			2,215,291				2,602,470					6,714,321				8,347,065
Share based compensation	Note 15		41,517				155,936					264,793				485,646
Sales and marketing			478,724				446,042					1,552,778				1,452,153
Depreciation and amortization	Note 8, 9		239,751				509,525					775,489				1,586,026
Total expenses			2,975,283				3,713,973					9,307,381				11,870,890
Loss before items noted below			(896,957	)			(2,259,276	)				(4,209,215	)			(7,526,508	)
Interest expense (income)			350,265				559,366					1,449,109				2,043,675
Transaction costs			127				125,612					41,178				133,834
Loss on disposal of assets	Note 8		(10,139	)			4,330					307,700				97,241
Other loss (income)			70,249				(87,856	)				32,029				(104,812	)
Gain on debt modification			–				(312,083	)				–				(312,083	)
Gain on change in fair value of warrant liabilities			–				(23,371	)				–				(605,134	)
Loss on change in fair value of convertible debentures	Note 11		565,328				351,088					565,328				470,365
Loss before income taxes			(1,872,787	)			(2,876,362	)				(6,604,559	)			(9,249,594	)
Current income tax expense			848,379				–					1,511,595				15,924
Net loss from continuing operations			(2,721,166	)			(2,876,362	)				(8,116,154	)			(9,265,518	)
Loss from discontinued operations (Note 6)			–				(213,800	)				–				(310,269	)
Net loss			(2,721,166	)			(3,090,162	)				(8,116,154	)			(9,575,787	)
Other comprehensive loss
Items that will be reclassified subsequently to profit or loss:
Cumulative translation adjustment			–				210,023					–				1,192,068
Comprehensive loss		$	(2,721,166	)		$	(3,300,185	)			$	(8,116,154	)		$	(10,767,855	)
Basic and diluted loss per share		$	(0.00	)		$	(0.00	)			$	(0.01	)		$	(0.02	)
Weighted average number of common shares outstanding			881,420,646				685,518,103					867,567,723				621,050,033

GOLDEN LEAF HOLDINGS LTD.
Interim Condensed Consolidated Statements of Cash Flows (Unaudited)
For the nine months ended September 30, 2020 and 2019 (Expressed in U.S. dollars)
					For the three months ended
Cash from Operating Activities					September 30, 2020
Cash (used in) provided by:
Operating activities:
	Net loss				$	(2,721,166	)
	Depreciation of property, plant and equipment					290,091
	Lease amortization					186,640
	Loss on disposal of assets					(10,139	)
	Interest expense					350,265
	Share-based compensation					41,517
	Loss on fair value adjustment to debt					565,328
	Transaction costs					41,178
	Loss on fair value of biological assets					84,728
	Reserve for obsolete inventory					52,732
	Other non-cash transactions					9,252
Changes in working capital items:
	Accounts receivable					(6,968	)
	Other receivables					(472,837	)
	Income tax payable					848,378
	Sales tax recoverable					199,094
	Accounts payable and accrued liabilities					634,214
	Sales tax payable					240,351
	Biological assets					(68,605	)
	Inventory					97,412
	Prepaid expenses and deposits					56,226
Cash provided by operating activities					$	417,691

Adjusted EBITDA
		For the three months ended							For the nine months ended
		September 30, 2020				September 30, 2019			September 30, 2020					September 30, 2019
Loss before income taxes		$	(1,872,787	)		$	(2,876,362	)	$	(6,604,559	)			$	(9,249,594	)
Adjustments:
Net impact, fair value of biological assets			84,728				–			246,526					–
Depreciation and amortization			476,733				509,525			1,548,121					1,586,026
Fair value changes on debt and equity instruments			565,328				327,717			565,328					(134,769	)
Share based compensation			41,517				155,936			264,793					485,646
Interest expense, net			350,265				559,366			1,449,109					2,043,675
Transaction costs			127				125,612			41,178					133,834
Start-up costs(1)			59,924				–			179,120					–
Extraordinary losses(2)			60,093				–			276,883					–
Impairments and other			70,249				(87,856	)		32,029					(104,812	)
Loss on disposal			(10,139	)			4,330			307,700					97,241
Adjusted EBITDA		$	(173,962	)		$	(1,281,732	)	$	(1,693,772	)			$	(5,142,753	)
(1) Write-off of significant start up costs related to the Company’s California business
(2) Losses experienced in Nevada due to unexpected shut down and facility abandonment due to COVID-19