VANCOUVER, BRITISH COLUMBIA -- February 24, 2017 -- InvestorsHub
NewsWire -- Namaste Technologies Inc. ("Namaste" or the "Company")
(CSE:N)(OTC:NXTTF)(FRANKFURT:M5BQ)
is pleased to report that it has entered into a definitive
agreement (the "Agreement") with Australian Vaporizers PTY Limited
("Australian Vaporizers") to acquire all of the issued and
outstanding shares of Australian Vaporizers in exchange for a
combination of cash, common shares and an earn-out payment. Upon
the completion of the transaction, Namaste further solidifies its
position as the leading e-commerce company in the vaporizers and
accessories space with significant market positions in the North
America, Europe, South America and now Asia Pacific.
Australian Vaporizers was founded in 2010 and has grown to
become the largest online retailer of vaporizers in Australia. The
company's website www.australianvaporizers.com.au has
approximately 80% of the market share. The company's customer
database has over 48,000 individuals that have made upwards of
77,000 orders during the lifespan of the company. For the period
ended June 30, 2016, the company produced approximately $4.5
million of revenue and $1.1 million of EBITDA. Gross margins for
the period were over 45%. The financial results for the period have
been audited by Grant Thornton Australia Ltd.
Strategic rationale for the transaction as follows:
- Positions Namaste as the leading vaporizer and accessories
company in Australia, a country with a population of 24.3 million
people;
- Expands customer database to well-over 300,000 individuals
globally. This further positions the Company with one of the
largest databases of cannabis consumers globally and spans all
major markets. Namaste will enter commercial arrangements to
further monetize these customers;
- Positions the Company with over $18.0 million of run rate
revenue and moves the Company into profitability. The higher
margins of Australian Vaporizers are beneficial to the margins of
the combined entity;
- Provides full Australian distribution center and additional
technical staff; and
- Attractive valuation at approximately 1x sales and 5x
EBITDA.
Transaction terms and conditions are as follows:
- Purchase price of 1.0x 12-month trailing sales of $5.0 million,
plus the value of inventory acquired within six (6) months
preceding the closing, and 50% of the value of the inventory
acquired prior to six (6) months preceding the closing, less all
liabilities and plus trade debt and cash. The total purchase price
is estimated to be approximately $5.5 million;
- Consideration of 75% cash on closing, 10% in common shares
based on the 20-day volume weighted average price upon signing of
definitive agreement and 15% earn-out based on sales and
integration milestones; and
- Receipt of all director and requisite regulatory approvals
relating to the transaction, including without limitation, CSE
approval, if required.
Bought Deal Financing
The Company is also pleased to announce that it has entered into
a letter of engagement with Eight Capital and Canaccord Genuity
Corp. as co-lead underwriters and joint bookrunners, and including
Beacon Securities Limited. (together, the "Underwriters"), under
which the Underwriters have agreed to purchase 24,000,000 units of
the Company (the "Units"), on a "bought deal" private placement
basis, subject to all required regulatory approvals, at a price per
Unit of $0.25 (the "Offering Price"), for total gross proceeds of
$6,000,000 (the "Offering"). Each Unit shall consist of one common
share of the Company (a "Share") and one-half of one common share
purchase warrant (a "Warrant"). Each Warrant shall entitle the
holder thereof to acquire one Share at a price of $0.35 for a
period of 24 months following the Closing Date.
In the event that the closing sale price of the Company's Shares
on the Canadian Securities Exchange is greater than $0.70 per Share
for a period of 10 consecutive trading days at any time after the
closing of the Offering, the Company may accelerate the expiry date
of the Warrants by giving notice to the holders thereof and in such
case the Warrants will expire on the 30th day after the date on
which such notice is given by the Company.
The Company has granted the Underwriters an over-allotment
option to purchase up to an additional 3,600,000 Units at the
Offering at the Offering Price, exercisable in whole or in part, at
any time on or prior to 48 hours prior to the closing of the
Offering. If this option is exercised in full, an additional
$900,000 will be raised pursuant to the Offering and the aggregate
proceeds of the Offering will be up to approximately
$6,900,000.
The Company intends to use the net proceeds of the Offering will
be used for the acquisition of Australian Vaporizers PTY Limited
and for working capital and general corporate purposes.
The closing date of the Offering is scheduled to be on or about
March 9, 2017 and is subject to certain conditions including, but
not limited to, the receipt of all necessary approvals, including
the approval of the Canadian Securities Exchange and the applicable
securities regulatory authorities.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of the
securities in any State in which such offer, solicitation or sale
would be unlawful. The securities being offered have not been, nor
will they be, registered under the United
States Securities Act of 1933, as amended, and may
not be offered or sold in the United States absent registration or
an applicable exemption from the registration requirements of the
United States Securities Act of 1933, as amended, and
applicable state securities laws.
Management Commentary
Mr. Sean Dollinger, President and CEO of Namaste, comments: "The
acquisition of Australian Vaporizers completes the geographical
profile of Namaste and puts us in a very strong position in all
four corners of the globe. This acquisition also further builds the
critical mass of Namaste, instantly moves us into profitability and
expands our database of high value customers. We look forward to
further advancing our relationship with Australian Vaporizers and
completing the proposed transaction."
About Namaste Technologies Inc.
Namaste Technologies Inc. is an emerging leader in vaporizer and
accessories space. Namaste has 26 ecommerce retail stores in 20
countries, offers the largest range of brand name vaporizers
products on the market and is actively manufacturing and launching
multiple unique proprietary products for retail and wholesale
distribution. The Company is currently focused on expanding its
product offering, acquisitions and strategic partnerships, and
entering new markets globally.
On behalf of the Board of Directors
Sean Dollinger
Chief Executive Officer
Further information on the Company and its products can be
accessed through the links below:
www.namastetechnologies.com
www.namastevaporizers.com
www.namastevaporizers.co.uk
www.vaporseller.com
www.everyonedoesit.com
www.everyonedoesit.co.uk
FORWARD-LOOKING INFORMATION This press release contains
forward-looking information based on current expectations. These
statements should not be read as guarantees of future performance
or results. Such statements involve known and unknown risks,
uncertainties and other factors that may cause actual results,
performance or achievements to be materially different from those
implied by such statements. Although such statements are based on
management's reasonable assumptions, Namaste assumes no
responsibility to update or revise forward looking information to
reflect new events or circumstances unless required by law.
Although the Company believes that the expectations and assumptions
on which the forward-looking statements are based are reasonable,
undue reliance should not be placed on the forward-looking
statements because the Company can give no assurance that they will
prove to be correct. Since forward looking statements address
future events and conditions, by their very nature they involve
inherent risks and uncertainties. These statements speak only as of
the date of this press release. Actual results could differ
materially from those currently anticipated due to a number of
factors and risks including various risk factors discussed in the
Company's disclosure documents which can be found under the
Company's profile on www.sedar.com. This press release contains
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E the
Securities Exchange Act of 1934, as amended and such forward
looking statements are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. The CSE
has neither reviewed nor approved the contents of this press
release.