After the last few days and weeks, it seems almost pointless talking about any company that is publicly traded as it is probably getting crushed, or if you are lucky, only moderately beaten up. However, in times like this you have to look past what the market is doling out on a day to day basis and think about the bigger picture. Perhaps you don’t want to be buying today, trying to catch the proverbial ‘falling knife’, or maybe we are close to a bottom. I don’t have a clue. What I do know is that what has happened year to date is not going to prevent me from buying stocks in the future, so I always want to have a giant ‘watch list’ that I can prioritize when everything goes on sale. Even though it may seem like this is the sale that never ends.
That’s why, when there’s a broad market sell off like the one we are currently enduring, it’s fun to go looking for stocks that are almost free. In this case I’m talking about a company that is trading at an all time low stock price, below $0.10/share, and market cap of roughly C$11 million, both of which suggest there could be potential for plenty of upside should any of its several business lines gain traction. I’m talking about Sixth Wave Innovations Inc. (CSE: SIXW | OTCQB: SIXWF), a nanotechnology company with patented technologies that focus on extraction and detection of target substances at the molecular level using highly specialized Molecularly Imprinted Polymers (MIPs). The Company is in the process of a commercial rollout of its Affinity™ cannabinoid purification system, as well as, IXOS®, a line of extraction polymers for the gold mining industry. The Company is in the development stages of a rapid diagnostic test for viruses under the Accelerated MIPs (AMIPs™) label. Sixth Wave can design, develop and commercialize MIP solutions across a broad spectrum of industries for which the Company has products at various stages of development.
Given where we currently stand in the pandemic, the name of the company is a little coincidental, but we need to look beyond that to the investment thesis. Like many companies at the onset of COVID-19, they transitioned to pursue a better way of detecting the virus. In December, 2021 the Company announced it had successfully demonstrated selective binding and detection of live SARS-CoV-2 virus in saliva samples using its patent-pending AMIPs™ technology, which could lead to a handheld breathalyzer system. This might have you thinking, “who cares, the pandemic is over”. But the development and learning from this process has led to a partnership with TraceSafe Inc., to use patented MIPs for imprinting, capturing, and detecting substances at the molecular level to provide an effective and proactive prevention and containment strategy for deadly viruses and pathogens in animals. If you think about the Avian Flu resulting in the culling of tens of millions of chickens and turkeys across the U.S. and Canada at present, there could be plenty of opportunity here. In fact, a widespread bird flu outbreak in 2005 raised alarm bells and prompted the US Senate to allocate US$4 billion to prepare for a possible influenza pandemic.
Another active business line is the Affinity™ Extraction Process, an extraction solution specifically designed to extract THC and/or CBD from cannabis/hemp crude for the production of pure THC and CBD compounds. For Cannabis Producers, the Affinity™ unit is designed to capture and extract Cannabinoids to ensure the purest end product. The system replaces antiquated processes including winterization, distillation and chromatography. The highly scalable Baseline unit is designed to produce approximately 20 kg of cannabinoid distillate or full spectrum distillate per day and each unit is capable of generating gross revenues to Sixth Wave of up to $100K/month. Agreements are in place for the delivery of four machines, with the first of the three systems to Green Envy Extracts before the end of fiscal Q3 2022 (May) while an MOU for the fourth unit was signed with Quantum Labs of New Mexico in January, 2022.
The third potential revenue stream could come from IXOS®, a line of extraction polymers formulated for deployment in the gold mining industry for the extraction of gold from cyanide leach solutions. It is designed to be more selective, more efficient, have higher capacity, and offer environmental benefits compared to current processing methods. Sixth Wave’s recent patent award and previous work with lithium, nickel, cobalt, rare earth elements, and platinum group metals point to similar potential that has proven successful in gold and silver mining. To that end, the Company has been engaged by Champlain Mineral Ventures to develop a “green” mining process for lithium from its Brazil Lake deposit. The Company has also submitted proposals to government entities and commercial mining companies to exploit its intellectual property for these critical metals with non-dilutive grants and contracts. This success is translating into a stream of small revenue generating contracts as mining companies move to test IXOS® in the Company’s laboratories as well as with on-site pilots.
As you can see, Sixth Wave has a lot of opportunities percolating, with some potentially reaching a level where they could be providing the Company with revenue in the not too distant future. Sixth Wave just raised C$2.6 million in March, which should buy them a little more time to achieve that goal. In the meantime, the stock is on sale, along with almost every company that has anything to do with technology. Not to say the stock price can’t go lower, but it is almost free right now.