Mr. Sean Dollinger reports

NAMASTE ANNOUNCES RECORD-BREAKING QUARTERLY SALES OF $4.9M REPRESENTING A 133% YEAR-ON-YEAR INCREASE

Namaste Technologies Inc. has filed its unaudited quarterly financial statements, management's discussion and analysis, and certification of the quarterly filings for the first quarter of fiscal 2017. The statements for the period can be accessed on SEDAR. The company's sales for the three months ended Nov. 30, 2017, were $4.9-million, representing a $2.8-million or 136-per-cent increase in comparison with the company's quarter ended Nov. 30, 2016. Gross margin also increased to 32 per cent for the three months ended on Nov. 30, 2017, in comparison with 28 per cent for the company's quarter ended Nov. 30, 2016.

During the financial reporting period of Sept. 1, 2017, to Nov. 30, 2017, the company focused on expanding sales in existing territories, as well as in emerging markets, such as Mexico and Brazil, while reducing sales exposure in the United States.

The company also sold its U.S. assets and operations as a strategic decision to eliminate risk related to U.S. market exposure.

The company remains focused on achieving profitability and on launching its medical cannabis marketplace, NamasteMD, through its wholly owned subsidiary, Cannmart Inc.

Quarterly financial highlights:

• The majority of revenues was generated by several key markets. The top-five countries generated 84 per cent of revenues for the three months ended Nov. 30, 2017. In the previous year, the top-five countries generated 79 per cent of revenues. The attached table depicts gross revenues by country.

                   REVENUES BY COUNTRY        
                               
Country                         Nov. 30, 2017       Nov. 30, 2016

Great Britain                      $1,233,983            $547,281
Australia                           1,516,582                   -
United States                         677,552             912,011
Brazil                                354,444             101,923
Canada                                355,632              80,238
New Zealand                           104,484             134,168
Germany                               262,610              23,437
Ireland                                61,820              35,505
Israel                                 62,844              22,236
Other                                 301,160             230,389
Total                               4,931,110           2,087,188

• The company's cost of sales for the three months ended Nov. 30, 2017, was $3.4-million (2016: $1.5-million), which resulted in a gross profit of $1.6-million (2016: $600,000). The gross profit increased by $1.0-million or 167 per cent, which is primarily due to the growth in revenue outside of the United States. The gross profit margin increased year over year from 28 per cent to 32 per cent due to better operating efficiencies.
• Operating costs were $4.7-million (2016: $1.5-million), which is an increase of $3.2-million. The increase in operating costs is primarily due to non-cash charges of $2.6-million, which included share-based compensation, shares for services, amortization of intangible assets and depreciation.
• Selling expenses for the three months ended Nov. 30, 2017, were $1.1-million (2016: $500,000), which is an increase of $600,000. The increase is due in part to an increase in advertising expenses of $100,000 and consulting expenses of $200,000. Advertising expenses relate to on-line search services, as well as other on-line promotional and social media tools utilized by the company to generate sales. These costs further represent the company's significant investment into search engine optimization and its continuing customer acquisition strategy. In addition to this, there were non-cash expenses related to shares for services of $200,000.
• Consulting expenses relate to compensation amounts paid to various companies and individuals for marketing, order fulfilment, customer service activities, e-commerce product development, back-office e-commerce support and sales commissions. The increase in consulting fees is primarily related to information technology to develop current and new revenue channels that the company is working toward.
• Administration expenses for the three months ended Nov. 30, 2017, were $3.3-million (2016: $900,000), which is an increase of $2.4-million. The increase is primarily due to share-based compensation of $2.1-million and shares for services of $100,000.
• Other expenses for the three months ended Nov. 30, 2017, were $300,000 (2016: approximately nil), which is an increase of $300,000. The increase is primarily due to amortization of intangibles of $200,000, which relates to the amortization of the customers list from the acquisition of Australian Vaporizers.

Management commentary

Sean Dollinger, president and chief executive officer of Namaste, commented: "During the first quarter ended Nov. 30, 2017, Namaste embarked on implementing many strategic business initiatives focused on expansion in international markets other than the United States. In addition, posting record-breaking revenues, management remains focused on seeking and securing strong partnerships to further accelerate growth going forward. We expect to see significant upside to Namaste's revenue and profitability as a direct result of the many acquisitions and partnerships that were initiated both during and following this quarter. Management believes there are many more strategic opportunities that exist in the cannabis market that will serve to strengthen Namaste's position moving forward. In particular, the NamasteMD platform will be a key driver of growth. We are extremely excited at where the industry is headed and believe Namaste is well positioned in 2018 and beyond."

About Namaste Technologies Inc.

Namaste is the largest on-line retailer for medical cannabis delivery systems globally. Namaste distributes vaporizers and smoking accessories through e-commerce sites in 26 countries and with five distribution hubs located around the world. Namaste has majority market share in Europe and Australia, with operations in the United Kingdom, Canada and Germany, and has opened new supply channels into emerging markets, including Brazil, Mexico and Chile. Namaste intends to leverage its existing database of Canadian medical cannabis consumers, along with its expertise in e-commerce, to create an on-line marketplace for medical cannabis patients, offering a larger variety of product and a better user experience.

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