Namaste Technologies Inc. (NXTTF) entered into a letter of engagement with Eight Capital to purchase, as co-lead underwriter and joint bookrunner with Canaccord Genuity Corp., 15,000,000 units of Namaste, on a “bought deal” basis pursuant to a filing of a short form prospectus, subject to all required regulatory approvals, at a price per unit of $3.00 for gross proceeds of $45,000,000. The deal is expected to close on or about October 17.
Namaste plans on using the net proceeds to fund inventory and for working capital and general purpose.
Namaste has also agreed to grant an over-allotment option to purchase up to an additional 15% of the units at $3.00, exercisable in whole or in part, at any time on or prior to the date that is 30 days following the closing of the offering. If this option is exercised in full, an additional approximately $6,750,000 will be raised pursuant to the Offering and the aggregate proceeds of the offering will be approximately $51,750,000.
In addition to doing the $45 million deal, Namaste announced that RMMI Corp.’s (CSE: RMMI) wholly-owned subsidiary, Rocky Mountain Marijuana Inc. signed a medical cannabis supply agreement with Cannmart, which is a wholly-owned subsidiary. Cannmart will purchase medical cannabis from Rocky Mountain to offer in its online medical-cannabis marketplace.
Cannmart received its Access to Cannabis for Medical Purposes Regulations medical cannabis “sales-only” license with no cultivation, which is the first of its kind to be issued by Health Canada earlier this week. With this license, Cannmart will be allowed to buy pre-packaged, labeled and tested cannabis products. It will eliminate the need for buying in bulk, testing, and packaging which will significantly reduce overhead costs for Cannmart and thus increase gross profit margins and profitability.
“We are extremely pleased to have been chosen as a supplier to Cannmart. RMMI’s goal of supplying the highest organic-quality cannabis products by “Blending Science with Nature” and using aeroponics cultivation systems, complements Namaste’s approach to employing advanced technology to best serve its rapidly-growing customer base,” said Earl Connors, President, and CEO of RMMI. “RMMI looks forward to exceeding Cannmart’s expectations and expanding its relationship with Namaste.”
Namaste Technologies calls itself “Your Everything Cannabis Store.” According to the company statement, it operates the largest global cannabis e-commerce platform with over 30 websites in 20+ countries under various brands. Namaste’s product offering through its subsidiaries includes vaporizers, glassware, accessories, CBD products.
On Tuesday, Namaste named PricewaterhouseCoopers LLP as its new auditor. PWC will replace MNP LLP as Namaste’s auditor.
The stock was lately trading at $2.25, falling over 7% on news of the bought deal. This is down from the 52-week high of $3.27, but above its year low of 16 cents. Last week, Namaste was included in the Horizons HMMJ ETF. Still, the company also found itself in hot water when Tilray canceled its contract with Namaste over a marketing event featuring models in nurse costumes.