Mr. Mr. Sean Dollinger re

NAMASTE ANNOUNCES THIRD QUARTER FINANCIAL RESULTS

Namaste Technologies Inc. has released financial results for the third quarter and nine-month period, each ending May 31, 2016. The financial statements and management's discussion and analysis for the period can be accessed on SEDAR.

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-per-cent gross profit margin. For the nine-month period, revenue was $2,611,871 and gross profit was $1,058,154, representing a 40.5-per-cent 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, 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-per-cent decline over Q3 2015 and sequential increase of 5.7 per cent over second quarter 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-per-cent gross profit margin for Q3 2016 versus 42.3 per cent for Q3 2015. While gross profit declined versus Q3 2015 by 23.1 per cent, gross profit sequentially increased by 11.6 per cent compared with Q2 2016 and gross profit margin improved from 45.3 per cent to 47.9 per cent. The sequential improvement in margin is indicative of the company's increased focus on price controls and more favourable terms from manufacturers.
• Operating costs of $716,855 represent a 97-per-cent increase over Q3 2015 and a 19.4-per-cent sequential decrease over Q2 2016. The majority of the increase in operating costs compared with Q3 2015 is due to non-recurring costs associated with taking the company public and share-based compensation.
• Pretax loss of $363,494 is reflective of the increased operating costs during the period, being primarily due to listing costs and share-based compensation.

Third quarter operational highlights:

• Transitioned from pay-per-click advertising to inbound organic e-commence growth strategies focused on domain authority, best-in-class natural rankings, trust of brand growth, client population expansion and sales conversion optimization. Organic inbound marketing increases the recurring nature of sales and places less dependence of major search engines;
• Maintained No. 1 brand trust ranking in the vaporizer space, as ranked by Trust Pilot, and achieved approximately a 3-per-cent conversion ratio over the period;
• Entered binding letter of intent for the acquisition of VaporSeller, an e-commerce platform for the distribution of vaporizers and accessories with an unaudited revenue of $3.4-million (U.S.) in 2015. Subsequent to the quarter ended May 31, 2016, the company closed the acquisition on July 15, 2016;
• Placed commercial order qualities for the Guru, the company's first proprietary vaporizer capable of seamlessly vaporizing dry herbs, concentrates and liquids.

Sean Dollinger, president and chief executive officer of Namaste, commented: "The first nine months of the company's fiscal 2016 has been transformational. When I reflect back at the accomplishments of our team over this period, including taking our company public, completing our first external capital raises, securing our first acquisition, and implementing long-term and sustainable e-commerce marketing strategies, my personal sense of optimism and excitement for the future of Namaste is confirmed. As always, I would like to thank all the stakeholders of Namaste for their support as we continue to move forward with our objective of creating the leading international vaporizer and accessories company globally."

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