Namaste Technologies Inc. (OTCMKTS: NXTTF ) is continuing in its efforts to win back investors. The company announced that it completed its acquisition of CannMart Labs, which has applied for a processing license for extraction. The company has also set up a whistleblower system within the company and appointed a seasoned investor relations person.
“We are pleased by activity this past cyber weekend to see our own CannMart and licensed brands shine alongside our valued partner brands which is a clear validation by consumers that our strategy is working,” said Meni Morim, CEO of Namaste. “Our average order value increased by 42% compared to 2019, demonstrating that our investment into our e-commerce platform is driving solid results. We are clearly focused on the execution of our strategy to position Namaste as a leading cannabis company and look forward to building on this positive momentum as we head into the upcoming holiday season.” The company outlined the following details for its sales:
Cyber Weekend Highlights:
- Average order value increased by 42% compared to 2019 to $192
- Online traffic increased 50% over the 2019 cyber weekend
- 40% more giveaway entries than expected. These entries generated email newsletter sign-ups, increased social media visits and interactions
- Best sales in Dried Flower: Sage n Sour and Sensi Star, both under the CannMart brand
- Best sales in Cartridges: Disposable Cart Bundle and Pink Kush 0.5g Cart, both under the CannMart licensed Phyto Extractions brand
- Best sales in Edibles: Strawberry Lemonade 1:1 Sour Gummies and Watermelon Hybrid Sour Gummies, both under the Wana brand supplied by Indiva
- Best sales in Infused Oils: Treasure Island CBD Tincture under the CannMart brand and CBD Soft Gels under the brand and supplied by Indiva
Namaste confirmed the purchase price of $4,034,000 and earn-out payments in the form of Namaste common shares for CannMart Labs. The payments are on a sliding scale and upon the achievement of pre-determined revenue targets payable over 9 fiscal quarters at a maximum of approximately $1.94M per Earn-Out Payment, payable in Namaste common shares or, at Namaste’s option, in cash with a 5% discount. The company said that a first tranche of the Purchase Price of $1,608,500 has been paid to the Vendors by way of issuance of 7,123,560 Namaste common shares, issued at a deemed price of $0.2258, being the 7-day VWAP up to and including December 1, 2020.
At one point in 2019 Namaste came under a short-seller attack by Citron Research, which among other accusations, claimed that Sean Dollinger, who was then CEO of Namaste, lied to shareholders. Dollinger claimed to have sold Dollinger Enterprises US, a subsidiary of Namaste, to an arm’s length party, when in fact he had sold it to company insiders. Consequently, Namaste hired a special investigator to examine Citron’s claims, which ultimately led to Dollinger’s ousting and a $1.9 million bill for the investigation. Further compounding the scandal was news that its auditor PricewaterhouseCoopers, LLP resigned as well as claims of “irregular advertising” by the Brazilian government. As a result of losing its auditor, the company was also late in filing its financial statements. Morim was named interim CEO and then later took on the role officially.
Namaste said it has launched a Whistle-blower Program that allows employees to anonymously and confidentially report cases of workplace misconduct. The program is supported by ClearView Connects, a Canadian-based reporting solution provided by an independent, third-party supplier. The company also announced the appointment of Edward Miller as Vice President, Investor Relations effective November 16, 2020. Mr. Miller brings more than 20 years of experience as a seasoned investor relations professional in the pharmaceutical and cannabis industry. Subject to Exchange approval, Namaste has granted Mr. Miller options to acquire 170,000 common shares in the capital of the Company at a price of CAD$0.23 per share that vest quarterly over 3 years and have a four-year term.