The start of the new year has been volatile with major indices such as the S&P 500 (SPY), QQQ and the small cap ETF Russell 2000 (IWM) all selling off aggressively. With that being said, the overall market won’t be all doom and gloom forever, and its important to be ready when the market reverses and stocks react accordingly. Today we’ll go over some stocks we believe investors should keep their eye on, and what catalysts may be on the horizon.
Molecule Holdings Inc.
Despite the major sell off in January, Molecule Holdings (CSE: MLCL) (OTC: EVRRF) has held up pretty well, with shares of MLCL holding its ground around the $.07 – $.08 level. In December, MLCL expanded their footprint in the Canadian beverage space as the company added British Columbia and the Northwest Territories as new points of distribution. In addition to its press release dated December 15th 2021, MLCL has also received a purchase order from the Northwest Territories and consists of seven SKU’s which are all developed by Molecule. The British Columbia cannabis retailer has also purchased multiple SKU’s from MLCL and the launch in British Columbia will also include the company’s newly announced “Canajo Espresso Spice” a coffee flavor infused cannabis beverage.
Furthermore, in mid January MLCL announced that it has received a replacement purchase order from the province of British Columbia and shipments were expected to take place within the same month. MLCL has also received a new purchase order from the Nunavut cannabis retailer for 4 SKU’s, of which contains MLCL’s brand new PHRESH Mango Peach. Molecule’s CEO David Reingold was quoted “We are very happy to see our products performing so well in British Columbia and are excited with the additional points of distribution. Since December, we have added 14 new in-market SKUs, 2 new brands, and 2 new flavours from existing brands.”
MLCL is at a very interesting turning point as the company is now expanding into new provinces with new flavours and repeat orders already in place and is expected to enter the Québec cannabis market through the SQDC later this year. We believe that Molecule branded products will resonate with the consumers of Quebec as the products offer high THC content which consumers are after, as well as a competitive price point and delicious flavor!
In addition to launching in new provinces and new beverages, MLCL is also expected to receive its amended sales license from Health Canada this year. Once MLCL receives its amended sales license, MLCL will be able to sell and distribute directly to the provincial retailers therefore cutting out the middleman and increasing its profit margins!
Awakn Life Sciences Corp.
Biotechnology company Awakn Life Sciences (NEO: AWKN) (OTCQB: AWKNF) has also endured some volatility during the broad market pullback, however AWKN is holding its support line, and may be ready to bounce back to higher levels on strong positive developments in the near future.
We first brought AWKN to investors on January 3rd, 2022, at a price of approximately $2.50 per share, where we provided an in-depth analysis in our recent article “Our Top Psychedelic Stocks For Q1 2022”. Since our publication, AWKN rose 34% hitting a high of $3.35 on what is truly fantastic news for the company. On January 11th, AWKN announced the company’s Phase II A/B clinical trial which resulted in a reduction of alcohol relapses, with participants abstaining from alcohol for 162 days of the 180 days after receiving their first treatment. Other additional findings include a significant decrease in depression, increased ability to experience pleasure and improved liver function. The Head of Ketamine-Assisted Therapy for AWKN Professor Celia Morgan was quoted “We found that controlled, low doses of ketamine combined with manualized psychological therapy can significantly increase post treatment abstinence rates. This is extremely encouraging, as we normally see three out of four people returning to heavy drinking within twelve months of treatment. The data we’ve collected from this study paves the way for a paradigm shift in how AUD is treated.”
Another data point we find incredibly interesting is that there was a dramatic decrease in mortality rate within the Kare group. The study mentions that 1 in every 8 patients would have died in 12 months without treatment, however post treatment the mortality rate decreased significantly to approximately 1 in 80. This is a much-needed development and gives hope to those suffering AUD, and is a development which we believe the UK’s regulatory body (MHRA) cannot ignore.
Awakn Life Sciences is also one of only a select few companies in the psychedelic sector that is actually entering Phase III clinical trials in the not-so-distant future and when compared to other companies in the space, AWKN is definitely one of the more undervalued psychedelic company’s currently on the market. In recent developments, AWKN has also partnered with MAPS and signed a Memorandum of Understanding (MOU) to explore MDMA-assisted therapy for the treatment of Alcohol Use Disorder in Europe. Mr. Tennyson stated, "We believe that by licensing MAPS' pre-clinical data and exploring options for future ethical commercialisation, we will improve the timeline and path to market for these life-changing treatments for AUD, providing hope for those for whom the status quo is not working."
In our recent interview with AWKN’s CEO Mr. Anthony Tennyson, he mentioned that the company is aiming to graduate its US listing to the NASDAQ later this year. This is a development that investors will not want to miss out on as uplisting the company’s shares is a great way to generate more exposure and gain accessibility to a larger pool of investors, especially institutional investors.
In addition to positive developments for AWKN recently, yesterday investment banking firm H.C Wainwright published its analyst report on Awakn Life Sciences, with the investment bank giving it a buy rating and issued a price target of $10.00 per share! This price target represents a 400% increase from its current price or a valuation of only $240 Million. For some perspective, there are companies who have valuations close to a quarter billion dollars and have achieved far less than AWKN in terms of clinical trials.
With an exceptionally robust management team, its large cash on hand, tight structure, no debt and its advancement through clinical trials are the main reasons we remain bullish on AWKN and 2022 is looking to be a fantastic year for the company!
Kontrol Technologies Corp.
Our third company on our list for the month of February is Kontrol Technologies (NEO: KNR) (OTCQB: KNRLF). Kontrol Technologies was hit fairly hard during the month of January, almost in tandem with other technology companies within the sector. KNR is currently trading at a valuation of $88 Million which their third quarter revenues grossed $21.5 million in revenue which is up 614% year-over-year and net record income of $2.1 million for the quarter. Kontrol is also set to post their fourth quarter results at the end of February, and KNR is estimating that revenues will be between $43 - $46 million. We believe that Kontrol will beat its previous revenue guidance in this upcoming quarter like they have in the past. The company currently has $160 Million on its orderbook and is targeting to double their footprint from 400 customer buildings to more than 800 buildings in 2022.
Kontrol has also stated that results from its testing with Health Canada would be announced sometime during January or February of 2022 and seeing that the month of January has already passed with no news, we are adamant that the company will release additional details regarding its testing update in February which was also at the request of several government agencies. In January, KNR has shipped BioCloud to international customers located in the Czech Republic, Qatar and Japan. A distribution agreement with the Japanese trading company is expected to be announced later this month.
In a corporate update announced in late December, KNR noted that one of its key strategic initiatives for 2022 is to uplist its shares to the NASDAQ. We imagine that the company may provide an update on its NASDAQ listing near the end of February, as to coincide with its year end financials, propelling the stock price higher.
There are three catalysts that investors will want to keep an eye for in February: 1) Year end financials, 2) Health Canada update, 3) distribution agreement with Japanese HVAC company, and hopefully the listing to the NASDAQ as well! Considering KNR’s increasing revenue, growing order book and additional adoption for BioCloud internationally, we believe KNR has a lot of upside potential left in its tank for 2022 and the year has just begun!
Atlas Salt
Founded in 2011 by Patrick J. Laracy, Atlas Salt Inc. (TSX-V: SALT) earlier known as Red Moon Resources Inc., engages in acquiring, evaluating, exploring, and mining services in Newfoundland and Labrador. Atlas Salt Inc. is a subsidiary of Vulcan Minerals Inc, and it is headquartered in St. John’s, Canada.
This Canadian “State- of-the-art Salt Factory” has a market cap of $126.69 million and explores potash, salt, gypsum, and other mineral deposits. The company has 100% ownership in the great Atlantic Salt Project in the Bay St. Geroge Basin of Western Newfoundland. Some of the other prominent project company hold interests are:
- Ace Gypsum- located in the dormant Flat Bay Gypsum mines to the southwest of the Great Atlantic salt deposit
- Black Bay Nepheline- located in southern Labrador
- Captain Cook Salt
When the renewable energy sector is experiencing stellar global growth, institutional and retail investors are focused on (E.S.G.) Environmental, Social, and Governance. To maximize the shareholder value further, Atlas is also planning a spinout of its Fischell’s Brook Salt Dome to tap into renewable energy storage opportunities.
As of 31st December 2020, the company owned 19 mineral licenses and approximately 5,500 hectares in the Bay St. George region of Western Newfoundland and Black Bay, Labrador.
HOW IS ATLAS "BRINGING THE POWER OF SALT TO ITS INVESTORS"? : MARKET OPPORTUNITY
Atlas is doing a magnificent job of "passing the salt" from the Great Atlantic to the rest of the world.
- There's a vast gap to fill as North America is a consistent net importer of road salt
- The U.S.A. also imports millions of tons per year from Chile, Egypt, and Morocco
- ~25 million tonnes of salt is scattered on U.S. roads annually
The strategic location of the Great Atlantic Salt Project, High-grade salt, eco-friendly processing (with no toxic tailings), stupendous logistics (nearby deepwater ports, next to Trans Canada Highway), etc., are some unique selling propositions of Atlas Salt. These U.S.P. collectively can help it capture the market share from overseas operations facing a sharp rise in shipping costs.
Some of the recent developments from Atlas Salt are:
Subject to the final geotechnical assessment from the drill program in western Newfoundland, initial development evaluations are now premised on accessing salt deposits via an inclined ramp (earlier opposed to vertical shaft access). The inclined ramp will require less capital and operating cost than the vertical shaft, providing better infrastructure efficiency. The President of SALT Mr. Rowland Howe stated The unusual shallowness of this salt deposit, and its location next to a deep water port in such a favorable jurisdiction, combine to make Great Atlantic a prime advantaged asset in the heart of the robust North American road salt market that relies heavily on overseas imports.”
In the pursuit of ongoing Great Atlantic Feasibility Study around the shallow salt deposits, SALT has begun with its diamond drilling program at the Great Atlantic. The first drill achieved a 500-meter step-out towards the deepwater port from the existing northernmost hole and returned a gross thickness of 335.3 meters with whopping 98% salt in the top 125 meters (as of 15th October 2021) and 96.8% salt within the top 190 meters. A new step-out hole will be set up where ~3.5 km from the port where seismic data suggests that the deposit thickens.
To conduct a downhole survey and undertake geotechnical logging of the drill core, SALT is working with GEMEC Consulting Engineers and Scientists Limited (GEMTEC) and Terrane Geoscience Inc. to evaluate the mine design.
Global investors and governments are interested in "green" hydrogen, energy storage, and renewable energy. This interest and global growth in this sector have led SALT to the possibility for a spin out of its 100%-owned Fischell’s Brook Salt Dome for its underground energy storage potential. This step is in the right direction for not just maximizing shareholder value and potentially become the nation’s leader in Canada’s clean energy future.
SALT has no debt and boasts approximately $8 million dollars in cash according to its last financial statements, making SALT fully funded to complete its Great Atlantic Salt Project Feasibility Study as well as other planned initiatives, so be sure to keep SALT on your radar this year!
Forward Looking Statements: This article may contain "forward-looking information" (as defined in applicable Canadian securities legislation) that is based on expectations, estimates and projections as of the date of the content is published on this website. Wherever possible, words such as "anticipate", "believe", "expects", "intend" and similar expressions have been used to identify these forward- looking statements. Information in this article has been furnished for your information only, is accurate at the time of posting, and may be superseded by more current information. Except as required by law, we do not undertake any obligation to update the information, whether as a result of new information, future events or otherwise. This article should not be considered as personal financial advice. Full Disclosure: Awakn Life Sciences and Molecule Holdings Inc. is a client of the parent company of EquityInsight.ca Directors of the parent company of EquityInsight.ca may buy, hold or sell the securities before during or after this publication.