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Tuesday, December 1, 2020

Are We Close to Support in Namaste Technologies Inc (OTCMKTS:NXTTF)?

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Shares of Namaste Technologies Inc (OTCMKTS:NXTTF) have been trekking lower in a clear downward trend despite some pretty interesting bullish catalysts, which suggests some market discounting of an underlying process that continues to trouble major shareholders. But the table could turn as the catalysts mount. An interesting example of the type of shift that could spell support is the company’s recent announcement that it has entered into a share purchase agreement to acquire 49% of the issued and outstanding shares of Calgary, AB based Choklat Inc. for $1.5 million in cash consideration.

According to the release, “Choklat is a premium chocolate manufacturer with existing sales through its online eCommerce site and through a network of distributors across Canada. Choklat has recently entered into a supply relationship with Sobeys and already has product in 25 stores in Alberta with a goal to roll out in Western Canada and beyond in the coming months.”

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 NamasteMD.com, 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 just announced that it has entered into a share purchase agreement to acquire 49% of the issued and outstanding shares of Calgary, AB based Choklat Inc. for $1.5 million in cash consideration.

While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action NXTTF shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -29% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.

Namaste Technologies Inc (OTCMKTS:NXTTF) pulled in sales of $1.9M in its last reported quarterly financials, representing top line growth of 173.1%.

“Choklat is a great acquisition for us with a vast offering of existing products that can be easily infused with THC or CBD and sold as edibles,” said Meni Morim, Interim CEO of Namaste Technologies Inc. “Their small batch manufacturing model is a great fit within the new proposed regulations for edible cannabis products. This transaction provides the security of supply and manufacturing for our medicinal cannabis customers and provides capacity for the recreational market in the event proposed regulations are passed.”

Earning a current market cap value of $174.22M, NXTTF has a store ($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%. You can bet we will update this one again as new information comes into view. 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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