Namaste Technologies Inc. ('Namaste' or the 'Company') (TSXV: N) (FRANKFURT: M5BQ) (OTCMKTS: NXTTF), an online platform for cannabis products, accessories, and responsible education, today reported its financial results for the third quarter ended August 31, 2020.
Namaste's third quarter results continue to build on the revenue growth success on a year-over-year basis as the Company solidifies its position within the cannabis value chain. Namaste's wholly-owned subsidiary, CannMart Inc. ('CannMart'), through its distribution channels, continues to make a significant contribution to Namaste's revenue stream as the Company seeks to expand product lines, improve operational efficiencies, grow revenue, and increase gross margins. In this third quarter, the Company continued to drive internal changes, improvements, and investments to strengthen its foundation for long term growth. As a result of these efforts, and subsequent to quarter end, the Company launched VendorLink, a proprietary platform that connects consumers with cannabis brands, vendors, and retailers forming a true cannabis marketplace experience.
Third Quarter Highlights
Net Revenue increased 49%, to $5.6 million in the third quarter ended August 31, 2020 compared to $3.8 million in the same period last year.
The net segment revenue for CannMart, Namaste's core growth engine, increased approximately 1586% to $2.3 million in the third quarter ended August 31, 2020 compared to the comparable period in 2019, excluding excise tax.
Cannabis revenue represented 40.6% of net consolidated revenues for the third quarter ended August 31, 2020 versus 3.6% for the third quarter ended August 31, 2019.
Reported third quarter ended August 31, 2020 net loss of $7.8 million compared to $14.7 million in the same quarter last year. The improvement reflects, in part, CannMart Inc.'s introduction of new distribution channels, restructuring efforts, and resulting business improvements. Included in the net loss for the third quarter ended August 31, 2020 was $1.7 million in unrealized, non-cash, foreign exchange losses. Subsequent to the end of the third quarter, the Company introduced: VendorLink, a proprietary scalable platform for brands and vendors to upload and sell their cannabis accessories products through CannMart.com and The facilitation of online recreational sales by a licensed retailer in Saskatchewan.
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 the Company seeking to expand product lines, improve operational efficiencies, grow revenue, and increase gross margins, 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 management's perceptions of Namaste's standing in the online marketplace for cannabis products, the Company's continued transition into a growth phase with a focus on increasing revenues and gross margins while reducing costs, Namaste's beliefs regarding the quality of its management, the Company's continued focus on growing the business profitably, increasing revenues and reducing operational burn, 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: risks relating to the Company's ability to execute its business strategy and the benefits realizable therefrom, risks specifically related to the Company's operations, and risks relating to the market price of Namaste's common shares. 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.