~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.
Transaction Highlights:
- 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.
Information on the Company and its many products can be accessed
through the links below:
NamasteTechnologies.com
NamasteMD.com
Cannmart.com
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.
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SOURCE Namaste Technologies Inc.