~New structure focuses on UK License versus distribution~
VANCOUVER, Feb. 1, 2019 /CNW/ - Namaste Technologies Inc. ("Namaste" or the "Company") (TSXV: N) (FRANKFURT: M5BQ) (OTCMKTS: NXTTF) today announced an update to its previously announced intention to acquire UK based AF Trading Ltd. (operating as "Access Fulfillment" or "accessfulfilment.com"). Under the previously announced terms, Namaste's wholly-owned subsidiary, Namaste Bahamas Inc. ("Namaste Bahamas") expected to acquire all of the issued and outstanding shares of Access Fulfillment for US $5 million (CAD $6,550,000) which was intended to enable Namaste to retain Access Fulfillment to operate as Namaste's exclusive distribution center for CBD and cannabis products in the UK. Namaste has since elected to use another provider. However, under the terms of the new letter of intent with the principal shareholders of Access Fulfillment (the "AF Principals"), Namaste Bahamas will now acquire 100% of the issued and outstanding shares of CannMart Ltd. ("CannMart UK"), a subsidiary formed by the AF Principals for purposes of holding the pharmaceutical distribution license previously filed by Access Fulfillment, which is essential to pursue an amendment (the "License Amendment") to be granted a level 2 controlled substances license that will enable the sale and distribution of cannabis products in the UK. In addition, Namaste will procure that CannMart UK enters into a consulting agreement with the AF Principals to secure their services for a minimum of two years.
Key Terms of the new letter of intent include:
- Namaste Bahamas will acquire CannMart UK for aggregate consideration of CAD $1,500,000, comprised of $500,000 in cash consideration and $1,000,000 in shares of common stock of Namaste provided the share purchase transaction closes and the License Amendment is filed;
- Namaste shall also procure that CannMart UK, following closing of the share purchase transaction, retains the AF Principals to provide consulting services over a two year period to facilitate the License Amendment and to further the business objectives of CannMart UK for aggregate consideration of CAD $2,000,000, comprised of $500,000 in cash consideration payable over the term of the consulting agreement in monthly equal instalments and $1,500,000 in shares of common stock of Namaste payable in two equal installments upon filing of the License Amendment and receipt of final approvals, respectively.
"As part of our 2019 strategy to re-prioritize our capital investments, we were able to successfully reduce the overall acquisition price of the Access Fulfillment transaction and acquire the net assets we see as adding the most value to Namaste," said Sean Dollinger, CEO of Namaste Technologies Inc. "The UK market represents a significant growth opportunity and this acquisition remains an integral part of this growth."
The acquisition of CannMart UK and share issuances is subject to approval by the Toronto Venture Exchange ("TSXV" or the "Exchange"). Unless extended by agreement of the parties, the letter of intent will expire on the earlier to occur of ninety (90) days after its execution or the execution and delivery of the Definitive Agreement.
So, to put it simply folks, they now own the CannMart UK (for a bargain) which is a subsidiary created by Access Fulfillment. CannMart UK (via AF) has a pharmaceutical distribution license. Now we wait for the UK government to amend that license to facilitate level 2 controlled substance. It's also risk-free as this deal only goes through if the license is amended. It's beautiful!
I have only one question, "Namaste has since elected to use another provider." This is in reference to their initial plans to use AF as their distribution center. Wouldn't that now be CannMart? Hmm, perhaps they are referencing a delivery service. Anyone smell Pineapples?...
Anyhoo, this is a fantastic update all round. Progress. Good job team.