Namaste Announces Third Quarter Financial Results

TORONTO, ONTARIO--(Marketwired - Aug. 3, 2016) - Namaste Technologies Inc. (CSE:N)(OTC PINK:NXTTF)(FRANKFURT:M5BQ) ("Namaste" or the "Company") has reported financial results for the third quarter and nine month period, each ending May 31, 2016. The financial statements and management discussion & analysis for the period can be accessed on SEDAR at www.sedar.com.

During the quarter, the Company focused efforts on transitioning from pay-per-click advertising to inbound organic e-commence growth strategies, which generated Q3 2016 e-commerce revenue of $738,199 and gross profit was $353,361, representing a 47.9% gross profit margin. For the nine month period, revenue was $2,611,871 and gross profit was $1,058,154, representing a 40.5% gross profit margin. For the 2015 fiscal year, the comparable Q3 revenue was $1,087,256 and the comparable revenue for the nine month period was $3,471,420.

Looking forward to the last quarter of 2016 and first half of 2017, the Company anticipates revenue and gross profit to increase significantly due to further traction with its current inbound e-commerce market initiatives, commercialization of the Guru^tm, acquisition of VaporSeller, and seasonal increase of sales activities during Black Friday, Cyber Monday and the holiday season.

Third Quarter Financial Highlights

• Revenue of $738,199 represents a 32.1% decline over Q3 2015 and sequential increase of 5.7% over Q2 2016. The variance in revenue is indicative of the Company's transition from expensive pay-per-click advertising to inbound organic e-commence growth strategies which should result in stable revenue performance and decreased advertising spending.
  
  
• Gross profit of $353,361 represents a 47.9% gross profit margin for Q3 2016 versus 42.3% for Q3 2015. While gross profit declined versus Q3 2015 by 23.1%, gross profit sequentially increased by 11.6% compared to Q2 2016 and gross profit margin improved from 45.3% to 47.9%. The sequential improvement in margin is indicative of the Company's increased focus on price controls and more favorable terms from manufacturers.
  
  
• Operating costs of $716,855 represent a 97% increase over Q3 2015 and a 19.4% sequential decrease over Q2 2016. The majority of the increase in operating costs compared to Q3 2015 is due to nonrecurring costs associated with taking the Company public and share-based compensation.
  
  
• Pre-tax loss of $363,494 is reflective of the increased operating costs during the period, being primarily due to listing costs and share-based compensation.