Namaste Technologies Archives - Green Market Report

Namaste Technologies Inc.  (OTCMKTS: NXTTF) reported its financial results for the year ended November 30, 2020. Gross revenue for the fourth quarter ended November 30, 2020, was $8.0 million versus $4.0 million in the same period last year. Namaste trimmed its net losses in the fourth quarter to $6.4 million versus a net loss of $29.7 million for the fourth quarter in 2019. The company attributed the  $3.3 million improvements in net revenue for the fourth quarter to the increased revenues from the sale of cannabis products.

For the full fiscal year, the company had revenue of $27.1 million versus $16.4 million in the 2019 fiscal year, representing an increase of  65% from the prior year, respectively. The net loss for the fiscal year was $26.4 million versus a net loss of $63.2 million in the 2019 fiscal year. The company said in a statement that it is committed to maintaining these positive trends.

“We are pleased with the progress made by the team to achieve the highest recorded quarterly revenue for the company to date,” said Meni Morim, CEO of Namaste. “We achieved significant year-over-year growth of revenue as cannabis sales through CannMart’s distribution channels made an important contribution to the revenue stream. The Company is in a strong financial position today made possible from the considerable work undertaken in 2020 to lay the foundation for long term growth as Namaste continues its evolution to be the world’s foremost personalized wellness marketplace.”

The company’s working capital position remains strong at $16.5 million as of November 30, 2020. Since the year-end, Namaste successfully closed a $23 million bought deal offering.

Namaste also noted in a statement that it has launched CannMart.com into the USA offering Americans hemp-derived CBD and smoking accessories. It announced the addition of leading licensed producers to the CannMart.com platform: Auxly Cannabis Group, Hexo Corp and The Green Organic Dutchman Holdings (TGOD). Plus, it received a standard processing license from Health Canada for CannMart Labs Inc., its state-of-the-art BHO extraction facility.

Cannabis online platform company Namaste Technologies Inc. (OTCMKTS: NXTTF) reported that its net revenue for the year ending November 30, 2019 was $16.3 million, versus $23.8 million for the fifteen months ended November 30, 2018. The company said the change in revenue primarily reflected the sale/closure of non-core assets. The revaluation of assets and non-recurring costs associated with restructuring and legacy issues impacted the current year’s results by $32.7 million resulting in a net loss of $63.2 million compared to $41.6 million in the prior fiscal year.

“We made significant changes to the Company in 2019 which included key investments in new business segments, settlement of outstanding class actions, replacement of executive-level positions with top talent, and restructuring legacy businesses to reposition the business to compete over the long term,” said Meni Morim, CEO of Namaste. The company’s working capital position remains strong at $39.4 million with no debt obligations.

Class Action Suit Settled

The company said in a statement, “On March 16, 2020, with respect to the settlement of the Namaste Securities Class Action lawsuit and its approval by the Ontario Superior Court of Justice, the class action is formally closed as courts in Canada and the United States have approved the settlement.”

“The class action was a distraction and weight on our expenses,” added Mr. Morim. “We were able to settle the outstanding claims allowing us to refocus our efforts on changing the Company for the better in the long term.”

New COO

Mr. Faraaz Jamal was appointed to the position of Chief Operating Officer. Mr. Jamal has been with Namaste since May 2019. Mr. Jamal replaces Mr. David Giardino who is leaving the company to pursue other interests. Mr. Giardino has agreed to stay on with the Company until May to assist with operations through the transition period.

Share Compensation Drops

Share-based compensation, as part of total compensation, for the twelve months ended November 30, 2019, decreased by $19.9 million to $2.0 million compared to the fifteen months ended November 30, 2018. This reflects management’s efforts to realign and reduce its cost structure and demonstrate its increased focus on governance and related shareholder value.

Adjusted EBITDA for the twelve months ended November 30, 2019, was a loss of $23.1 million, compared to a loss of $17.9 million for the fifteen months ended November 30, 2018.

Namaste currently expects to file its Interim Filings for the first quarter ended February 29th on or by May 21, 2020.

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.

Stock Performance

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.