How to View the Pullback in Namaste Technologies Inc (OTCMKTS:NXTTF)

How to View the Pullback in Namaste Technologies Inc (OTCMKTS:NXTTF)


Shares of Namaste Technologies Inc (OTCMKTS:NXTTF) have been pulling back in recent days to test support inside of a largely bullish chart pattern, with range support in the $1.85/share area, and rising major moving averages coming up under the price with confluence in the $1.50-1.60/share zone. The stock has been one of our recent favorites given its transition from a medical marijuana specialty play into a potential powerhouse for the retail adult-use cannabis market.

To further beef up that narrative, the company just announced that it has pushed for more funding by entering into a letter of engagement with Eight Capital, under which Eight Capital has agreed to purchase, as co-lead underwriter and joint bookrunner with Canaccord Genuity Corp., 15,000,000 units of the Company, on a “bought deal” basis pursuant to a filing of a short form prospectus, subject to all required regulatory approvals, at a price per unit of $3.00 for gross proceeds of $45,000,000.

Namaste Technologies Inc (OTCMKTS:NXTTF) promulgates itself an emerging leader in vaporizer and accessories space. Namaste has 30 e-commerce 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.

NXTTF is currently focused on expanding its product offering, acquisitions, and strategic partnerships, and entering new markets globally.

According to company materials, “Namaste Technologies is Your Everything Cannabis Store. Namaste operates the largest global cannabis e-commerce platform with over 30 websites in 20+ countries under various brands. Namaste’s product offering through its subsidiaries includes vaporizers, glassware, accessories, CBD products, and the company will soon be selling medical cannabis in the Canadian market, subject to approval by Health Canada. Namaste has developed and acquired innovative technology platforms including, Canada’s first Health Canada compliant telemedicine application, and in May 2018 the Company acquired a leading e-commerce AI and Machine Learning Company, Findify AB. Findify uses artificial intelligence algorithms to optimize and personalize a consumer’s on-site buying experience. Namaste is focused on leveraging its cutting-edge technology to enhance the user experience throughout its platforms. Namaste will continue to develop and acquire innovative technologies which will provide value to the Company and to its shareholders as well as to the broader cannabis market.”

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As noted above, NXTTF has been undergoing a powerful transition to attempt to position itself as a leading piece of the adult-use cannabis market in Canada ahead of full-scale legalization next month. The company just announced that it has pushed for more funding by entering into a letter of engagement with Eight Capital for a bought deal financing for gross proceeds of $45,000,000.

In all, the chart shows 31% piled on for shareholders of the name during the trailing month. Furthermore, the stock has seen interest climb, with an increase in recent trading volume of nearly 330% above its longer-run average levels.

According to the release, “The Company has agreed to grant the Underwriters an over-allotment option to purchase up to an additional 15% of the Units at the Issue Price, exercisable in whole or in part, at any time on or prior to the date that is 30 days following the closing of the Offering. If this option is exercised in full, an additional approximately $6,750,000 will be raised pursuant to the Offering and the aggregate proceeds of the Offering will be approximately $51,750,000.”

At this time, carrying a capital value in the market of $577.16M, NXTTF has a stash ($471K) of cash on the books, which stands against about $1.1M in total current liabilities. One should also note that debt has been growing over recent quarters. NXTTF is pulling in trailing 12-month revenues of $5.6M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 173.1%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. Sign-up for continuing coverage on shares of $NXTTF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $NXTTF, either long or short, and we have not been compensated for this article.

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