Namaste Technologies Inc (OTCMKTS:NXTTF) signed a share purchase accord to clinch a balance 49% stake in CannMart Labs Inc.
As per the terms of the pact, Namaste took over the balance stake in CannMart for $4.034 million from JLLS Holdings Inc and MKD Holdings Inc (together known as vendors). Namaste will issue its common shares to the vendors in place of the first $1,608,500. It will release the balance payments of $2,425,500 to the vendors in the next nine quarters in equal amounts with the first quarter that ends on February 28, 2021.
The vendors can also earn additional payments in the form of common shares of Namaste on meeting the set revenue targets. They will receive the earn-out payments in the next nine quarters. It caps the maximum earn-out payment at $1.94 million.
Under the terms of the share purchase accord, Namaste may issue maximum common shares of 64.46 million common shares to the vendors. It accounts for 19.9% of outstanding shares of Namaste. Approval from TSX is required if Namaste wishes to offer more shares to the Vendors. Following the takeover, CannMart became a wholly-owned subsidiary of Namaste.
Oil extraction facility with cutting edge technology
Namaste previously acquired a 51% stake in CannMart Labs Inc in May 2018. The company agreed to support the construction of an oil extraction facility based in Etobicoke, Ontario. It incorporates cutting-edge extraction technology and complies with EU-GMP (EU Good Manufacturing Practice) certification requirements.
CEO of Namaste, Meni Morim said the takeover of the balance stake in CannMart will position Namaste as a leading player in the Cannabis space in Canada. CannMart awaits a processing license from the regulator Health Canada and will apply for the same. The company already equipped its facility with state-of-the-art technology. It can produce a variety of cannabis products such as live resin, shatter, and distillate products like edibles, tinctures, gel capsules, and vape cartridges.
Shareholders to receive incentives
The shareholders of Namaste will receive cash or common shares upon meeting set targets and generating profits. CannMart is working to receive a processing license and commence production of cannabis 2.0 products to suit the needs of medical use customers. It can also satisfy the demand of recreational customers in Canada using the services of sales partners.