Namaste Technologies Reports First Quarter 2020 Financial Results

~Firm studies 16% yr over yr web income progress and important enchancment in backside line in comparison with the identical interval final yr~

TORONTO, June 10, 2020 /PRNewswire/ – Namaste Applied sciences Inc. (“Namaste” or the “Firm”) (TSXV: N) (FRANKFURT: M5BQ) (OTCMKTS: NXTTF), a web based platform for hashish merchandise, equipment, and accountable schooling, at present reported its monetary outcomes for the primary quarter ended February 29, 2020. All monetary figures are in Canadian {dollars} except in any other case indicated.

Namaste’s first quarter outcomes mirror the work begun in 2019 and the Firm’s transition to a extra strategic place inside the worth chain. On a yr over yr foundation for the quarter ended February 29, 2020, income elevated and web loss decreased considerably. On a sequential foundation, income, gross margin and the underside line considerably improved. Equally as essential to notice on the income progress is the truth that it was achieved whereas revenue-generating, however non-core, enterprise property have been exited throughout 2019.

CannMart Inc., an entirely owned subsidiary of Namaste Applied sciences, (“CannMart”) continues to draw premium manufacturers, worth added suppliers, and provincial companies because of its experience in e-commerce, manufacturing, packaging, and distribution on this extremely aggressive and controlled trade. As mirrored within the Q1 2020 outcomes, CannMart’s expanded product catalogue grew in each its enterprise to enterprise (“B2B”) and enterprise to client (“B2C”) channels. CannMart continues to strengthen its aggressive place within the Hashish 2.Zero market because the trade shifts into client packaged items.

First quarter highlights:

• Recorded Internet Revenues of $5.Three million, a 16% improve over the identical interval ended February 28, 2019, and the very best quarterly income in two years.
• CannMart, Namaste’s core progress engine, web phase income elevated by roughly 798% to $1.Three million, excluding excise tax, over the comparable interval in 2019.
• On a sequential foundation, CannMart’s income elevated 258% from This fall 2019 to Q1 2020
• Reported Internet lack of $7.Four million in comparison with $10.Three million in the identical quarter final yr. The development displays the restructuring efforts in 2019 and ensuing enterprise enhancements in 2020.
• CannMart continues to extend the quantity and number of merchandise carried on the CannMart web site and out there by means of its B2B channels akin to:
• Premium craft hashish model Kief, a pure craft hashish firm through which Namaste holds a minority place and sure product buying rights, and
• Award profitable Phyto Extractions, a longtime legacy model within the Canadian market providing distinctive merchandise akin to hashish vaporizing pen cartridges and batteries; hashish capsules; and hashish tincture bottles and jars.
• CannMart signed a brand new provide settlement with Alberta Gaming, Liquor & Hashish (AGLC), representing the fifth provincial authorities buyer for Namaste. In accordance with the AGLC there are 465 retail places within the province, extra licensed retailers than in some other province.

“The adjustments in technique and company construction made throughout 2019 are beginning to mirror a optimistic affect in our monetary outcomes,” stated Meni Morim, CEO of Namaste. “Namaste’s revenues jumped this quarter to the very best stage because the first quarter of 2018 with a big contribution from CannMart, a formidable feat considering some exits from non-core companies throughout 2019. We’re gaining traction within the B2B phase with one early buyer, with whom we handed the Proof of Idea stage, driving nearly all of CannMart’s income progress. These are preliminary, but sturdy indicators of traction, as CannMart generated on this quarter alone, 164% of the income generated by CannMart in your entire yr of 2019. CannMart is seeing important progress in its operations as we enter new markets with new and well-known manufacturers and a rising variety of distribution channels.”

“We firmly consider in the way forward for the authorized hashish trade and our worth proposition as a frontrunner in growth, manufacturing and distribution of client packaged items. As producers of hashish merchandise proceed to develop, manufacturers will turn out to be the key driver for product differentiation and in the end gross sales. As evidenced by the strategic relationships with manufacturers like IGNITE and Phyto Extractions, we’re aligning with main manufacturers to assist construct their buyer base inside the authorized Canadian hashish market.”

“The Hashish 2.Zero market continues to be in its infancy.  Nonetheless, we count on this market to achieve momentum as new and progressive merchandise and types are launched. This market options greater gross margins and a bigger addressable buyer base than leaf-based merchandise and is a crucial addition to our product choices. Main manufacturers perceive the worth that we provide and belief us to symbolize them.”

Abstract of Consolidated Monetary Outcomes

Internet income for the primary quarter ended February 29, 2020 was $5.Three million, an enchancment of 16% in comparison with $4.6 million for the primary quarter of 2019. Gross margin as a share of web income (earlier than stock adjustment) for the quarter ended February 29, 2020 was 14% in comparison with 17% for the earlier interval. As illustrated on the chart under, hashish income is demonstrating sturdy progress and changing into a serious element of whole revenues.

https://mma.prnewswire.com/media/1178766/Revenue_Shifting_towards_Cannabis.jpg?p=original

Adjusted EBITDA for the primary quarter ended February 29, 2020 was a lack of $6.Zero million, in comparison with a lack of $5.1 million for the primary quarter ended February 28, 2019. Internet loss for the primary quarter ended February 29, 2020 was $7.Four million in comparison with $10.Three million in the identical interval final yr. The development within the web loss is primarily attributed to decreases in share-based compensation and restructuring and different non-recurring bills.

The Firm has taken a conservative method and made provisions towards monetary property together with however not restricted to accounts receivable and deposits. These non-cash, conservative measures symbolize roughly $0.9 million of the $7.Four million loss.

For additional particulars, the entire Monetary Statements for the primary quarter ended February 29, 2020 and the associated Administration’s Dialogue & Evaluation will be accessed on the Firm’s SEDAR profile at www.sedar.com.

COVID-19 UPDATE

Covid-19 is an unprecedented problem for the worldwide group. In response to this severe well being danger, administration employed procedures to mitigate its results on the enterprise and make sure the well being and security of its workers, distributors, companions and clients as the primary quarter was coming to an in depth. Though these challenges nonetheless persist, administration believes that acceptable actions have been taken and the enterprise is nicely positioned to function with restricted disruption.

NON IFRS FINANCIAL MEASURES

Administration evaluates the Firm’s efficiency utilizing quite a lot of measures, together with “EBITDA” and “Adjusted EBITDA”. The non-IFRS measures mentioned under shouldn’t be construed as a substitute for different monetary measures decided in accordance with IFRS. These measures don’t have a standardized that means prescribed by IFRS and subsequently they will not be corresponding to equally titled measures introduced by different publicly traded firms.

The Firm believes these non-IFRS monetary measures present helpful data to each administration and traders in measuring the monetary efficiency and monetary situation of the Firm.

Administration makes use of these and different non-IFRS monetary measures to exclude the affect of sure bills acknowledged underneath IFRS when analyzing underlying working efficiency and money affect. Every now and then, the Firm could exclude extra objects if it believes doing so would end in a more practical evaluation. The exclusion of sure objects doesn’t suggest they’re non-recurring.

About Namaste Applied sciences Inc.
With headquarters in Toronto, ON, and workplaces in each B.C. and across the globe, Namaste Applied sciences is a number one on-line platform for hashish merchandise, equipment, and accountable schooling. The corporate’s ‘all the pieces hashish retailer’, CannMart.com, offers clients with a various choice of hand-picked merchandise from a mess of federally-licensed cultivators, all on one handy website. Namaste’s international know-how and steady innovation handle native wants in a burgeoning hashish trade requiring sensible options.

Info on the Firm and its many merchandise will be accessed by means of the hyperlinks under:

NamasteTechnologies.com
NamasteMD.com
Cannmart.com
NamasteVapes.ca

Everyonedoesit.ca

FORWARD-LOOKING INFORMATION – This information launch incorporates “forward-looking data” inside the that means of relevant securities legal guidelines. All statements contained herein that aren’t historic in nature comprise forward-looking data. Ahead-looking data will be recognized by phrases or phrases akin to “could”, “count on”, “doubtless”, “ought to”, “would”, “plan”, “anticipate”, “intend”, “potential”, “proposed”, “estimate”, “consider” or the destructive of those phrases, or different comparable phrases, expressions and grammatical variations thereof, or statements that sure occasions or circumstances “could” or “will” occur. The forward-looking data contained herein is made as of the date of this press launch and relies on assumptions administration believed to be affordable on the time such statements have been made, together with administration’s perceptions of Namaste’s standing within the on-line market for hashish merchandise, the Firm’s transition right into a progress part with a give attention to rising revenues and gross margins whereas lowering prices, the Firm’s aim of changing into a number one procurement, processing and distribution firm specializing in the Canadian hashish market, Namaste’s beliefs relating to the standard of its administration, the strides the Firm has taken in its operations and the standard of the manufacturers provided by CannMart, the Firm’s give attention to rising the enterprise profitably, lowering operational burn and persevering with to grasp the mechanism of shifting hashish into the market, safely and reliably and the outcomes of operations, operational issues, historic developments, present circumstances and anticipated future developments, in addition to different concerns which might be believed to be acceptable within the circumstances. Whereas we take into account these assumptions to be affordable primarily based on data presently out there to administration, there isn’t any assurance that such expectations will show to be appropriate. By their nature, forward-looking data is topic to inherent dangers and uncertainties that could be basic or particular and which give rise to the likelihood that expectations, forecasts, predictions, projections or conclusions is not going to show to be correct, that assumptions will not be appropriate and that goals, strategic objectives and priorities is not going to be achieved. Quite a lot of components, together with recognized and unknown dangers, lots of that are past our management, might trigger precise outcomes to vary materially from the forward-looking data on this press launch. Such components embrace, with out limitation: dangers regarding the Firm’s skill to execute its enterprise technique and the advantages realizable therefrom, dangers particularly associated to the Firm’s worldwide operations, and dangers regarding the market worth of Namaste widespread shares. Extra danger components may also be discovered within the Firm’s present MD&A which has been filed underneath the Firm’s SEDAR profile at www.sedar.com. Readers are cautioned to not put undue reliance on forward-looking data. The Firm undertakes no obligation to replace or revise any forward-looking data, whether or not on account of new data, future occasions or in any other case, besides as required by relevant legislation. Ahead-looking statements contained on this information launch are expressly certified by this cautionary assertion.

Neither the TSX Enterprise Change nor its Regulation Companies Supplier (as that time period is outlined within the insurance policies of the TSX Enterprise Change) accepts duty for the adequacy or accuracy of this launch or has in any manner accepted or disapproved of the contents of this press launch.

SOURCE Namaste Applied sciences Inc.