Namaste Technologies Inc. announced its interim financial results for the second quarter ended May 31, 2019. All financial figures are in Canadian dollars unless otherwise indicated.
SECOND QUARTER 2019 HIGHLIGHTS
- Consolidated revenue remains consistent at $4.0 million compared with $4.1 million for the same period last year reflecting the Company’s resilience in light of exiting certain businesses and markets
- Gross margin of 21%, consistent with the second quarter of 2018
- Finished the quarter with positive working capital of $63.3 million, including $55.8 million in cash and cash equivalents
- Acquired an additional 34% of Pineapple Express Delivery Inc. (“Pineapple Express”), for a total equity position of 49% of the issued and outstanding common shares of Pineapple Express
- Entered into a share purchase agreement to acquire 49% of the issued and outstanding shares of Choklat Inc. (“Choklat”) for $1.75 million (cash consideration of $1.5 million; $0.25 million in stock options)
- Appointed independent directors Kenneth Jones and Andrew Wilczynski to the company’s Board of Directors, strengthening its composition
- Established an Advisory Board with inaugural member, Andrew Buckman, bringing extensive industry experience and leadership skills
- Increased data-driven sales and marketing efforts through the strategic hire of Faraaz Jamal to Vice President, Marketing & Strategy
- Made technology advancements to NamasteMD, further streamlining the patient approval process and improved operational execution at CannMart
- Completed and submitted CannMart Labz Health Canada application for oil extracting and processing
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“We have improved the Company’s foundations to build the world’s most customer focused cannabis marketplace”, stated Meni Morim, Interim CEO of Namaste. “From here, we are reprioritizing and refining our investments towards scalability, gaining marketshare and working capital management. We expect to see these results take shape over the next three to six months with a balanced approach between working capital optimization and the right investments to help the Company grow. This is an exciting time in the cannabis market overall and we want to make sure that we’re maximizing our opportunities.”
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“During the quarter, we made technological improvements in our online platform, acquisitions in Pineapple Express and Choklat, and expanded our list of licensed producers on CannMart. As recently announced, we have increased our access to medical cannabis patients through our relationship with ARBR. As part of our strategy to improve the access to and interactivity with license producers, we expect to announce additional producers under our new fee-based or consignment model. This new model allows licensed producers to see Namaste’s online marketplace as complementary to their business versus competition. We believe this shift with help drive future expansion of our product categories and related SKU’s and highlight our commitment to enhancing the customer experience from education to consumption. From a financial standpoint, this system helps reduce the burden on working capital too.”
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