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Xtraction Services Reports Third Quarter 2019 Financial Results

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Not for Distribution to U.S. Newswire Servicers or For Dissemination in the United States

LOS ANGELES–(BUSINESS WIRE)–Xtraction Services Holding Corp., (“Xtraction Services”, “XS” or the “Company“) (CSE:XS), a specialty finance company engaged in equipment leasing in the United States, announced today results for the quarter ending September 30, 2019 (“Q3/19”). The Company’s unaudited interim condensed Financial Statements (“FS”) and Management Discussion & Analysis (“MDA”) are available under the Company’s profile on www.sedar.com. All figures are expressed in United States dollars ($) unless otherwise stated.

Q3/19 Highlights:

  • Commenced trading on the Canadian Securities Exchange (“CSE”) upon the successful completion of the reverse takeover transaction (“RTO”) with Caracara Silver and listed on the CSE under the symbol “XS”
  • Increased Revenues to $0.96 million in the quarter, compared to $63.9 thousand for the same period of the previous year (“Q3/18”)
  • Improved Gross Profits of $0.12 million in the quarter, compared to a gross loss of $0.18 million in Q3/18
  • Reduction in Operating Expenses to $0.62 million in the quarter, compared to $1.71 million for Q3/18
  • Improvement in Realized Losses of $0.41 million in the quarter, compared to a loss of $2.30 million for Q3/18
  • Cash on hand at September 30, 2019, of $4.93 million (working capital of $2.21 million)

Additional Highlights:

  • Puritix LLC Lease Agreement: The Company amended its lease terms with Puritix, a Kentucky-based cannabidiol processor, and was able to start invoicing four (4) months ahead of schedule
  • Insider Buying: Archytas Ventures LLC (“Archytas”, an investment company controlled by insiders of XS) purchased common shares of XS in the open market
  • Halo Labs Inc. (“Halo”) Sale-Leaseback Agreement: The Company signed a sale-leaseback agreement with Halo, a leading cannabis extraction company that develops and manufactures quality cannabis oils and concentrates operating in California, Oregon and Nevada

David Kivitz, Chief Executive Officer of XS, commented, “We are pleased to report our Q3/19 financials which show increased revenues, improved results and a reduction in operating expenses as a result of streamlining the cost structure of the business. With the majority of costs associated with the RTO transaction realized in Q3/19, we should continue to see financial and operational improvements into the fourth quarter.”

“We were also very pleased to complete the leasing agreement with Puritix, a Kentucky based hemp biomass processor and a sale-leaseback agreement with Halo Labs, a leading cannabis extraction company operating in California, Oregon and Nevada. We continue to work closely with potential customers on new lease initiatives and look to provide updates on our business development strategy as we progress.”

Outlook

Xtraction Services continues to assess numerous leasing opportunities and intends to focus on pursuing those that align with its growth objectives, primarily in the United States. Target leasing opportunities will mainly consist of leases to businesses underpinned by recurring, predictable revenues, sound balance sheets, and experienced management teams. The Company believes accretive opportunities exist as many companies throughout the United States lack sufficient access to capital or are burdened with restrictive sources of capital with many leading to excessive dilution. As well, the recent signing in the United States of the Agriculture Improvement Act of 2018 creates significant opportunities in Cannabidiol extraction through hemp, and as a result has bolstered Xtraction Services pipeline.

Key Financial Results

Results of Operations

The Company has established key customer relationships, some of which became revenue generating in 2018, with the remainder of its established customers generating revenue in 2019. Revenues increased by $0.90 million in Q3/19 compared to Q3/18, mainly due to the recognition of the present value of non-cancelable rentals associated with financing leases recorded in the quarter.

The Company realized a gross profit of $0.12 million for Q3/19, compared to a loss of $0.18 million for Q3/18. The Company anticipates further gross margin improvement due to the curtailment of excess equipment sales and new leasing activity.

Operating expenses decreased by $1.11 million in Q3/19 when compared to Q3/18, as a result of decreases in administrative and selling and marketing expenses, as well as streamlined professional fees, marketing and trade show expenses. The decrease in these areas were mainly due to an overall Company initiative starting in 2019 to scale back on marketing activities, specifically trade shows and the use of third-party advertising firms.

The Company realized a loss of $0.41 million compared to a loss of $2.30 million for Q3/18. The improvement over Q3/18 was directly related to the significant reduction in costs due to the completion of the RTO, streamlining of the Company’s future cost structure and stabilization of operating activities.

Liquidity and Capital Resources

The Company’s liquidity needs are primarily to finance growth initiatives including equipment acquisition, leasing activities, debt services and for general corporate purposes.

For the nine months ending September 30, 2019 (“YTD/19”), the Company had working capital of $2.21 million (compared to a working capital deficit of $1.50 million at December 31, 2018, “YE/18”), including cash of $4.94 million (compared to $0.53 million as of YE/18). The increase in working capital by $3.71 million, was primarily attributable to the proceeds received from the issuance of Sub Receipt debentures, and the generation of revenues partially offset by the funding of operations and purchase of servicing equipment. The accumulated deficit increased from $6.22 million at YE/18 to $13.50 million for YTD/19, due to funding operations, non-cash charges related to amortization of debt issuance costs and discounts, non-cash compensation and changes in the fair value of the derivative liabilities.

Additional information and disclosure relating to the Company’s financial position for Q3/19 is available within the FS and MDA, both of which are available under the Company’s profile at www.sedar.com.

Recent Developments

Subsequent to the quarter end, Xtraction Services amended the lease agreement with Puritix in October to provide extraction, testing and pre/post processing equipment over a term of 30 months, in exchange for a fixed price per gram of crude oil, or $50,000 per month, whichever is greater (altered from a royalty based on a price per gram of THC free distillate). In addition, Puritix agreed to allow Xtraction Services to invoice for crude oil already produced to date (approximately $60,000 value). Invoicing commenced in October, four (4) months earlier than originally anticipated.

As at October 24, 2019, Archytas purchased a total of 274,500 Subordinate Voting Shares (“Common Shares”), at an average price of CAD$0.2068. Assuming all outstanding Proportionate Voting Shares are converted into Common Shares, Archytas’ total ownership in Xtraction Services would be 11,434,075 Common Shares or approximately 24%.

On November 26th, 2019, the Company announced signing a sale-leaseback agreement with Halo against a variety of existing equipment including but not limited to; extraction, pre and post processing, freezers and security equipment, for $600,000 payable over a 3-year term. The Leaseback Agreement allows Halo to free-up invested capital to put towards their expansion plans with no disruption to their current operations.

XS has entered into debt settlement agreements with certain consultants where pursuant to these agreements, the Company has agreed to use an aggregate of 727,273 Common Shares in the capital of the Company at a deemed price (ranging from CAD$0.20-$1.10 per Common Share) to settle CAD$440,000 of outstanding debt. As well, the Company issued 1,955,000 incentive stock options to acquire common shares of the Company to certain directors, management and consultants, pursuant to the Company’s stock option plan, at an exercise price of CAD$0.34 and which expire five (5) years from the date of issuance.

Business Model and Revenue Streams

Xtraction Services currently provides a number of equipment leasing solutions and purchase options for a variety of equipment through its cultivated relationships with original equipment manufacturers (“OEM”), who are part of the Company’s Preferred Vendor Program.

Equipment Sales & Procurement: Xtraction Services’ team are experienced in identifying and sourcing the right equipment to meet the distinctive needs of each customer. Through the Preferred Vendor Program, the Company has access to an expansive variety of equipment, enabling Xtraction Services to source the right equipment, from the right vendor with attractive payment options.

Equipment Leasing Solutions: Equipment leasing solutions offer customers the ability to defer large upfront capital across manageable monthly payments with flexible terms, affordable down payments and allows for the ability to upgrade equipment as needed. Term lengths range from 12-36 months and are considered on an individual basis.

Sale-Leaseback Solutions: The sale-leaseback offering allows customers the opportunity to leverage existing equipment to unlock working capital for general operating expenses, expansion equipment, and growth initiatives without any disruption to existing operations. The sale-leaseback allows Xtraction Services to diversify and scale its portfolio of customers. Sale-leasebacks are highly complementary to the Company’s existing suite of financing solutions and provide a unique opportunity for OEM partners to leverage their existing client base.

On-Site Support: Xtraction Services’ team is diverse, allowing the Company to sell its consulting services spanning all facets of the business, such as operational best practices, product formulations, staff recruitment and more.

About Xtraction Services

Founded in 2017, XS specializes in providing equipment leasing solutions in the United States to owner/operators of cannabis and hemp companies, including cultivators, oil processors, manufacturers, testing laboratories, among others. In addition, XS provides a full range of consulting services including equipment selection and procurement, through its network of preferred vendor partnerships with original equipment manufacturers and equipment distributors. Further, XS also provides a full range of all on-site support services, including staff recruitment, process development, and product formulation. This powerful dynamic provides an end-to-end solution for customers which results in recurring revenues, strong profit margins, and a proven business model for XS stakeholders.

Neither the Canadian Securities Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Information

This press release contains “forward-looking information” and may also contain statements that may constitute “forward-looking statements”, collectively “forward-looking information”, within the meaning of applicable Canadian securities legislation. Such forward-looking information is not representative of historical facts or information or current condition, but instead represent the beliefs and expectations regarding future events about the business and the industry and markets in which Xtraction Services operates, as well as plans or objectives of management, many of which, by their nature, are inherently uncertain. Generally, such forward-looking information can be identified by the use of 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 may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. Forward-looking information contained herein may include but is not limited to, the ability to improve on the financial and operating performance of the Company in the fourth quarter; the ability to sign and collect on additional leasing agreements, and the timing thereof; and the ability for the Company to acquire additional funding to significantly expand its current leasing portfolio.

Forward-looking information does not guarantee future performance and involve risks, uncertainties and assumptions which are difficult to predict. Accordingly, readers should not place undue reliance on forward-looking information, which are qualified in their entirety by this cautionary statement. Xtraction Services does not undertake any obligation to release publicly any revisions for updating any voluntary forward-looking information, except as required by applicable securities law.

This press release does not constitute an offer to sell nor a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. Not for distribution to U.S. newswire services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities laws.

Contacts

David Kivitz

Chief Executive Officer

Antony Radbod
Chief Marketing Officer

Tel: 1-407-900-4737 Ext. 5

Email: ir@xtractnow.com
www.xtractnow.com

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Business and Management

QInsure Goes Live with FINEOS Claims

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DUBLIN–(BUSINESS WIRE)–#AdminSuiteFINEOS Corporation (ASX:FCL), the market-leading provider of group and individual core systems for life, accident and health insurance, today announced that QInsure, the insurance arm of QSuper, one of Australia’s largest and most respected superannuation funds, has successfully gone live with FINEOS Claims.

The QInsure and FINEOS partnership will bring about changes focused on foundational operational uplift including improved, integrated and automated processes and workflow for claims covering life, TPD and income protection. Key highlights of the program included automatic payment calculations and FSC Code of Practice solutions that help case managers deliver on the insurance promise and meet regulatory obligations. The overarching philosophy focussed on member-centric claims outcomes including automated claims management with FINEOS embedded analytics and integrated generation of correspondence to members.

Speaking about the project, Chief of QInsure, Phil Fraser said, “We ran a comprehensive RFP and completed a lot of due diligence to choose FINEOS as our partner. The collaborative partnership has been extremely positive, and the project has delivered high quality results. We achieved this by both parties providing strong leadership and governance, working very closely across business and IT, and sticking assiduously to FINEOS’ comprehensive out of the box solutions. We are already seeing one of the key objectives of this program come to life in our streamlined claims processes, enabling our Claim Managers, to be freed up from routine administrative tasks to focus on providing even more excellent outcomes to QSuper members.”

Michael Kelly, CEO, FINEOS added, “This has been an exciting project for us in Australia and we have enjoyed working with QInsure to assist them improve their service even further. FINEOS has the market leading product and a very strong local team that has established trusted relationships with some of the largest and most respected insurers across the ANZ region – with well over 10,000 licensed users locally, our product helps process millions of claims each year. We pride ourselves on a laser-like focus on adding business value and are delighted to add Qinsure to the growing and thriving FINEOS community.”

About FINEOS Corporation Limited

FINEOS is a leading provider of core systems for life, accident and health insurers globally with 6 of the 10 largest group life and health carriers in the US as well as 6 of the largest life insurers in Australia. With employees and offices throughout the world, FINEOS continues to scale rapidly, working with innovative progressive insurers in North America, Europe, and Asia Pacific.

The FINEOS Platform provides clients full end to end core insurance administration and includes the FINEOS AdminSuite core product suite as well as add-on products, FINEOS Engage to support digital engagement and FINEOS Insight for analytics and reporting.

For more information, visit www.FINEOS.com

About QInsure

QInsure was established to exclusively provide Group Life Insurance policies for QSuper, so life insurance benefits can be provided to QSuper members as part of their superannuation membership.

QInsure, the first insurance company set up by a superannuation fund in Australia, was established on 29 July 2015 as a wholly owned subsidiary of QSuper Limited and commenced issuing life insurance policies from 1 July 2016. The company has ASFL and APRA licenses to operate as an insurance company, as well as an independent Board of Directors and Executive Leadership Team.

About QSuper

QSuper started with an Act of Parliament in 1912 creating the entity now known as the QSuper Group.

Over time, QSuper expanded to become the superannuation fund for all current and former Queensland public sector employees and their spouses and is now Queensland’s largest super fund and one of the largest in Australia. QSuper has grown its range of products and services, with its customer base is now numbering more than 585,000 with over $113 billion in funds under administration.

With the passing of legislation in 2016 that removed the restrictions on who is eligible to join the Fund, from 1 July 2017 QSuper was able to welcome more Australians to experience the QSuper feeling.

For more information, visit https://qsuper.qld.gov.au/

Contacts

Victoria Jamison

Marketing Manager

FINEOS Corporation

+ 353 1 639 9700

victoria.jamison@FINEOS.com

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Business and Management

Baidam Solutions Joins CrowdStrike’s Elevate Partner Program

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Partnership delivers next-generation endpoint protection to Indigenous communities, supporting education in Information and Communications Technology (ICT) sector

SYDNEY–(BUSINESS WIRE)–CrowdStrike® Inc. (Nasdaq: CRWD), a leader in cloud-delivered endpoint protection, today announced Baidam Solutions has joined the CrowdStrike Elevate Partner Program. Through this strategic partnership, Baidam Solutions will combine their offerings with CrowdStrike’s industry-leading endpoint protection platform to help customers stop breaches. The CrowdStrike Elevate Partner Program provides technology partners, solutions providers, system integrators and managed service providers with the capability to deliver bespoke solutions to customers.

Through the Elevate Partner Program, Baidam Solutions will offer CrowdStrike’s cloud-native Falcon platform, powered by Artificial Intelligence (AI), unified next-generation antivirus (NGAV), IT hygiene, endpoint detection and response (EDR), cyber threat intelligence, and proactive threat hunting for customers in Australia. Delivered via a single lightweight agent, the solution enables reliable prevention, detection, response and mitigation to all threats, including sophisticated malware-free intrusions, so that customers can spot and stop breaches quickly.

Baidam Solutions is CrowdStrike’s first Australian Indigenous channel partner and offers a unique go-to-market strategy. Phillip Jenkinson, chief executive officer and co-founder, Baidam Solutions, said, “We’re delighted to be working with CrowdStrike to bring the very best cybersecurity solutions to our customers. We are committed to helping to Bridge the Gap of Indigenous diversity and inclusion in the ICT sector. We believe that education, creating role models and pathways of employment for Indigenous ICT students is key to diversifying the IT security industry. Our partnership with CrowdStrike demonstrates how a reseller and a vendor can work together to deliver excellent results, while also creating role models for Indigenous students to follow.”

“We’re pleased to add Baidam Solutions to our roster of channel partners. Baidam’s record of not only delivering industry-leading network security and application security expertise, but of giving back to regional and remote communities through educational scholarships and funding for cybersecurity certification training makes them a perfect partner for both our products and our values,” said Geoff Swaine, regional vice president, Channel and Alliances Asia Pacific and Japan, CrowdStrike.

The CrowdStrike Elevate Partner Program provides technology partners, solution providers, system integrators and managed service providers with the capability to deliver bespoke solutions to customers. Joint customers of Baidam Solutions and CrowdStrike have access to combined, advanced capabilities that leverage all of the existing assets within a customer’s environment, allowing them to operate their security efforts in a more efficient and effective manner responding to security threats faster and with greater accuracy.

About Baidam Solutions

Established in 2018, Baidam Solutions Pty Ltd is an Australian owned and operated, Supply Nation Certified, information technology business. Baidam Solutions delivers industry leading network security and application security expertise, allowing organisations to achieve greater performance, productivity, and protection.

Baidam Solutions gives back to regional and remote communities through educational scholarships and funding for cyber security certification training.

By partnering with some of Australia’s largest employers, the company is able to provide secure employment options through the Baidam Initiative program. This program provides pathways to employment in the ICT security sector for First Nations people.

About CrowdStrike

CrowdStrike® Inc. (Nasdaq: CRWD), a global cybersecurity leader, is redefining security for the cloud era with an endpoint protection platform built from the ground up to stop breaches. The CrowdStrike Falcon® platform’s single lightweight-agent architecture leverages cloud-scale artificial intelligence (AI) and offers real-time protection and visibility across the enterprise, preventing attacks on endpoints on or off the network. Powered by the proprietary CrowdStrike Threat Graph®, CrowdStrike Falcon correlates over two trillion endpoint-related events per week in real time from across the globe, fueling one of the world’s most advanced data platforms for security.

With CrowdStrike, customers benefit from better protection, better performance and immediate time-to-value delivered by the cloud-native Falcon platform.

There’s only one thing to remember about CrowdStrike: We stop breaches.

Qualifying organizations can gain full access to Falcon Prevent™ by starting a free trial.

Learn more: https://www.crowdstrike.com/

Follow us: Blog | Twitter

© 2019 CrowdStrike, Inc. All rights reserved. CrowdStrike, the falcon logo, CrowdStrike Falcon and CrowdStrike Threat Graph are marks owned by CrowdStrike, Inc. and registered with the United States Patent and Trademark Office, and in other countries. CrowdStrike owns other trademarks and service marks, and may use the brands of third parties to identify their products and services.

Contacts

CrowdStrike Media Contact:
CrowdStrike, Inc.

Megan Guthrie +61407464121

Megan.guthrie@crowdstrike.com

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Business and Management

PRU LOSS ALERT: TOP RANKED ROSEN LAW FIRM Reminds Prudential Financial, Inc. Investors of Important Deadline in Securities Class Action – PRU

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NEW YORK–(BUSINESS WIRE)–Rosen Law Firm, a global investor rights law firm, reminds purchasers of the securities of Prudential Financial, Inc. (NYSE:PRU) between February 15, 2019 and August 2, 2019, inclusive (the “Class Period”) of the important January 27, 2020 lead plaintiff deadline in the securities class action. The lawsuit seeks to recover damages for Prudential investors under the federal securities laws.

To join the Prudential class action, go to http://www.rosenlegal.com/cases-register-1735.html or call Phillip Kim, Esq. toll-free at 866-767-3653 or email pkim@rosenlegal.com or cases@rosenlegal.com for information on the class action.

NO CLASS HAS YET BEEN CERTIFIED IN THE ABOVE ACTION. UNTIL A CLASS IS CERTIFIED, YOU ARE NOT REPRESENTED BY COUNSEL UNLESS YOU RETAIN ONE. YOU MAY RETAIN COUNSEL OF YOUR CHOICE. YOU MAY ALSO REMAIN AN ABSENT CLASS MEMBER AND DO NOTHING AT THIS POINT. AN INVESTOR’S ABILITY TO SHARE IN ANY POTENTIAL FUTURE RECOVERY IS NOT DEPENDENT UPON SERVING AS LEAD PLAINTIFF.

According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (1) Prudential’s reserve assumptions failed to account for adversely developing mortality experience in its Individual Life business segment; (2) Prudential was not over-reserved, but instead, its reported reserves, particularly for the Individual Life business segment, were insufficient to satisfy its future policy benefits liabilities; (3) Prudential had materially understated its liabilities and overstated net income as a result of flawed assumptions in calculating mortality experience; and (4) as a result, Prudential’s public statements were materially false and misleading at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages.

A class action lawsuit has already been filed. If you wish to serve as lead plaintiff, you must move the Court no later than January 27, 2020. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to join the litigation, go to http://www.rosenlegal.com/cases-register-1735.html or to discuss your rights or interests regarding this class action, please contact Phillip Kim, Esq. of Rosen Law Firm toll free at 866-767-3653 or via e-mail at pkim@rosenlegal.com or cases@rosenlegal.com.

Follow us for updates on LinkedIn: https://www.linkedin.com/company/the-rosen-law-firm, on Twitter: https://twitter.com/rosen_firm or on Facebook: https://www.facebook.com/rosenlawfirm/.

Rosen Law Firm represents investors throughout the globe, concentrating its practice in securities class actions and shareholder derivative litigation. Rosen Law Firm was Ranked No. 1 by ISS Securities Class Action Services for number of securities class action settlements in 2017. The firm has been ranked in the top 3 each year since 2013. Rosen Law Firm has secured hundreds of millions of dollars for investors. Attorney advertising. Prior results do not guarantee a similar outcome.

Contacts

The Rosen Law Firm, P.A.

Laurence Rosen, Esq.

Phillip Kim, Esq.

275 Madison Avenue, 40th Floor

New York, NY 10016

Tel: (212) 686-1060

Toll Free: (866) 767-3653

Fax: (212) 202-3827

lrosen@rosenlegal.com
pkim@rosenlegal.com
cases@rosenlegal.com
www.rosenlegal.com

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