Namaste Technologies Inc. (“Namaste” or the “Company“) (TSXV: N) (FRANKFURT: M5BQ) (OTCMKTS: NXTTF), a leading online platform for cannabis products, accessories, and responsible education, today announced that it has entered into a secured convertible loan agreement (the “Loan Agreement“) with Choklat Inc. (“Choklat“), a private chocolate manufacturer in Alberta to advance $300,000 to Choklat.
“We’re investing in Choklat to ensure they’re able to maximize the pending market opportunity for edibles,” said Meni Morim, CEO of Namaste Technologies Inc.
As consideration for the advance of funds, Namaste is entitled to interest at a rate of 12% per annum on all amounts outstanding under the loan. The principal and all accrued interest thereon is repayable in full by Choklat at any time prior to December 31, 2020 (the “Maturity Date“). In the event that Choklat fails to repay any principal or interest outstanding under the Loan Agreement on or prior to the Maturity Date, all such outstanding amounts will automatically convert into common shares in the capital of Choklat (each, a “Choklat Share“) at a deemed value of $0.152 per Choklat Share. In connection with the Loan Agreement, Namaste and Choklat entered into a general security agreement, pursuant to which Choklat granted to Namaste a security interest in all present and after acquired property of Choklat for a period of five years. Namaste currently holds a 49% interest in the issued and outstanding share capital of Choklat.
Choklat is a premium chocolate manufacturer with existing sales through its online eCommerce site and through a network of distributors across Canada. Choklat has entered into a supply relationship with Sobeys and already has product in 25 stores in Alberta with a goal to roll out in Western Canada and beyond in the coming months.
Choklat completed and submitted its evidence package to Health Canada in July 2019. Choklat has seen significant expansion while preparing for the legalization of edibles, with non-infused products now available in over 150 retail outlets across Canada, including an increasing number of Safeway and Sobeys’s stores in Western Canada. Choklat is making every effort to ensure that it can smoothly transition its business activities to a new facility nearby, transforming its current space into a state-of-the-art edibles processing facility.