Namaste Technologies Announces Proposed Transaction to Take Ownership of CannMart Labs to 100%
November 18th, 2020
~Namaste to acquire remaining 49% of CannMart Labs as it works through the final phase of its application for a processing licence from Health Canada~
TORONTO, Nov. 18, 2020 /CNW/ – Namaste Technologies Inc. (“Namaste” or the “Company”) (TSXV: N) (FRANKFURT: M5BQ) (OTCMKTS: NXTTF), a leading platform for cannabis products, accessories, and education, is pleased to announce it has entered into a share purchase agreement (the “Share Purchase Agreement“) to acquire the remaining 49% interest in CannMart Labs Inc. (“CannMart Labs“), an applicant for a processing licence under the Cannabis Act (Canada) for cannabis extraction activities.
- Namaste to acquire remaining 49% of CannMart Labs to 100% ownership
- CannMart Labs facility in Ontario is completed for BHO extraction using leading extraction technology, making it one of only a few facilities in Canada with such capabilities
- Application in final phase for a processing licence from Health Canada
- Set to produce in-house branded Cannabis 2.0 products for medical channel customers at CannMart.com and recreational customers across Canada through sister company CannMart Inc.’s network of provincial sales partners
- Cannabis 2.0 products initially planned include shatter and live resin with capabilities to expand future distillate product offerings to vape cartridges, gel capsules, tinctures and edibles
In May 2018, Namaste acquired a 51% interest in CannMart Labs and agreed to finance the construction of its facility in Etobicoke, Ontario, a purpose-built oil extraction facility which incorporates a leading extraction technology facility designed to meet EU Good Manufacturing Practice (EU-GMP) certification requirements.
“Acquiring the remaining interest in CannMart Labs is another important milestone achieved in establishing Namaste as a leading company within the Canadian cannabis sector,” said Meni Morim, Chief Executive Officer of Namaste. “CannMart Labs is in the final stage of its application for an important processing licence from Health Canada. It has installed state-of-the-art extraction technology in its facility, which when granted a licence, will be able to produce an array of cannabis products including shatter and live resin, as well as future distillate products such as vape cartridges, gel capsules, tinctures and edibles.”
Mr Morim added: “This transaction is advantageous to Namaste shareholders as the Vendors will continue to provide management services and will receive earn-out payments in the form of Namaste common shares or cash only upon the successful achievement of certain revenue and gross profit targets and if the targets are met, the cash payment option allows Namaste to minimize dilution associated with the acquisition. We are working hard towards receiving our processing licence from Health Canada and look forward to producing in house branded Cannabis 2.0 products, for our medical channel customers at CannMart.com and recreational consumers across Canada through our network of provincial sales partners.”
Under the terms of the proposed transaction (the “Proposed Transaction“), Namaste will acquire the remaining 49% interest of CannMart Labs from MKD Holdings Inc. and JLLS Holdings Inc. (together, the “Vendors“) in exchange for a purchase price of $4,034,000 (the “Purchase Price“). A first tranche of the Purchase Price of $1,608,500 will be paid to the Vendors in common shares of Namaste issued at a deemed price equal to the seven day volume weighted average price of Namaste’s common shares on the TSX Venture Exchange (the “VWAP“) on the closing date of the Proposed Transaction. The remaining Purchase Price of $2,425,500 is payable to the Vendors in equal tranches over the next nine fiscal quarters beginning on the fiscal quarter ending February 28, 2021, at the VWAP on the date of issuance required within 5 days of the end of the applicable fiscal quarter.
The Vendors are also entitled to earn-out payments in the form of Namaste common shares, on a sliding scale, upon the achievement of pre-determined revenue targets (the “Earn-Out Payments“) which are also payable over the next nine fiscal quarters beginning on the fiscal quarter ended February 28, 2021. The maximum amount of each Earn-Out Payment payable to the Vendors in aggregate is capped at approximately $1.94M of Namaste common shares at the VWAP on the date of issuance required 15 days from publication of Namaste’s applicable quarterly financial statements. There is no minimum quarterly Earn-Out Payment.
Namaste has the option of paying any of the Purchase Price and any Earn-Out Payment (if any), in cash, subject to a five percent discount. Under the terms of the Share Purchase Agreement, the maximum number of common shares which may be issued to the Vendors is 64,466,942 (the “Maximum Share Number“) being 19.9% of Namaste’s currently outstanding common shares. In the event Namaste wishes to issue common shares in excess of the Maximum Share Number in satisfaction of the Purchase Price or the Earn-Out Payments, Namaste would be required to seek further approvals from the TSX Venture Exchange.
MKD Holdings Inc., one of the Vendors, is controlled by a director and officer of CannMart Labs and the CannMart Labs’ shares held by this entity are beneficially owned by his wife. Accordingly, the Proposed Transaction is considered to be a Non-Arm’s Length Transaction under the policies of the TSX Venture Exchange.
Closing of the Proposed Transaction is subject to customary closing conditions, including final approval of the TSX Venture Exchange.
About Namaste Technologies Inc.
Headquartered in Toronto, Canada, Namaste Technologies is a leading online platform for cannabis products, accessories, and responsible education. The Company’s ‘everything cannabis store’, CannMart.com, provides medical customers with a diverse selection of hand-picked products from a multitude of federally-licensed cultivators, all on one convenient site. The Company also distributes licensed and in-house branded cannabis and cannabis derived products to recreational consumers in Canada through a number of provincial government control boards and retailing bodies and facilitates licensed cannabis retailer sales online in Saskatchewan. Namaste’s global technology and continuous innovation address local needs in a burgeoning cannabis industry requiring smart solutions.
FORWARD-LOOKING INFORMATION – This news release contains “forward-looking information” within the meaning of applicable securities laws. All statements contained herein that are not historical in nature contain forward-looking information. Forward-looking information can be identified by words or phrases such as “may”, “expect”, “likely”, “should”, “would”, “plan”, “anticipate”, “intend”, “potential”, “proposed”, “estimate”, “believe” or the negative of these terms, or other similar words, expressions and grammatical variations thereof, or statements that certain events or conditions “may” or “will” happen.
The forward-looking information contained herein, including, without limitation, statements related to completion of the Proposed Transaction, the issuance of a processing license by Health Canada to CannMart Labs, the production of cannabis products by CannMart Labs, the impact of the acquisition of CannMart Labs on the growth of the Company’s business and the benefits of the Proposed Transaction to Namaste shareholders, is made as of the date of this press release and is based on assumptions management believed to be reasonable at the time such statements were made, including, without limitation, the granting of a processing license to CannMart Labs, management’s perceptions of its ability to successfully produce cannabis products at the CannMart Labs’ facility, integrate CannMart Labs’ products into its business and Namaste’s standing in the online marketplace for cannabis products, Namaste’s beliefs regarding the quality of CannMart Labs’ management, the expected demand for Cannabis 2.0 products and the expected growth of that market, the Company’s ability to add to its product line, results of operations, operational matters, historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances. While we consider these assumptions to be reasonable based on information currently available to management, there is no assurance that such expectations will prove to be correct. By its nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, including known and unknown risks, many of which are beyond our control, could cause actual results to differ materially from the forward-looking information in this press release. Such factors include, without limitation: regulatory risk, risks relating to the Company’s ability to execute its business strategy and the benefits realizable therefrom and risks specifically related to the Company’s operations. Additional risk factors can also be found in the Company’s current MD&A and annual information form, both of which have been filed under the Company’s SEDAR profile at www.sedar.com. Readers are cautioned not to put undue reliance on forward-looking information. The Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable law. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release or has in any way approved or disapproved of the contents of this press release.
SOURCE Namaste Technologies Inc.
For further information: Incite Capital Markets, Eric Negraeff / Darren Seed, Meni Morim, CEO, Namaste Technologies Inc.,Ph: 604.493.2004, Email: [email protected]
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
Follow Us on Social Media
About CFN Media Group
CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.
Disclaimer: Matters discussed on this website contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time-to-time have a position in the securities mentioned herein and will increase or decrease such positions without notice. The Information contains forward-looking statements, i.e. statements or discussions that constitute predictions, expectations, beliefs, plans, estimates, or projections as indicated by such words as "expects", "will", "anticipates", and "estimates"; therefore, you should proceed with extreme caution in relying upon such statements and conduct a full investigation of the Information and the Profiled Issuer as well as any such forward-looking statements. Any forward looking statements we make in the Information are limited to the time period in which they are made, and we do not undertake to update forward looking statements that may change at any time; The Information is presented only as a brief "snapshot" of the Profiled Issuer and should only be used, at most, and if at all, as a starting point for you to conduct a thorough investigation of the Profiled Issuer and its securities and to consult your financial, legal or other adviser(s) and avail yourself of the filings and information that may be accessed at www.sec.gov, www.pinksheets.com, www.otcmarkets.com or other electronic sources, including: (a) reviewing SEC periodic reports (Forms 10-Q and 10-K), reports of material events (Form 8-K), insider reports (Forms 3, 4, 5 and Schedule 13D); (b) reviewing Information and Disclosure Statements and unaudited financial reports filed with the Pink Sheets or www.otcmarkets.com; (c) obtaining and reviewing publicly available information contained in commonlyknown search engines such as Google; and (d) consulting investment guides at www.sec.gov and www.finra.com. You should always be cognizant that the Profiled Issuers may not be current in their reporting obligations with the SEC and OTCMarkets and/or have negative signs at www.otcmarkets.com (See section below titled "Risks Related to the Profiled Issuers, which provides additional information pertaining thereto). For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity-based compensation in the companies it writes about, or a combination of the two. For full disclosure, please visit: https://www.cannabisfn.com/legal-disclaimer/. A short time after we acquire the securities of the foregoing company, we may publish the (favorable) information about the issuer referenced above advising others, including you, to purchase; and while doing so, we may sell the securities we acquired. In addition, a third-party shareholder compensating us may sell his or her shares of the issuer while we are publishing favorable information about the issuer. Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time to time have a position in the securities mentioned herein and will increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity- based compensation in the companies it writes about, or a combination of the two. For full disclosure please visit: https://www.cannabisfn.com/legal-disclaimer/.