ProText Mobility, Inc. COMMON STOCK (OTCMKTS:TXTM) Making Big Moves

Do you remember our coverage of ProText Mobility, Inc. COMMON STOCK (OTCMKTS:TXTM)?

We said that the company was an attractive profile to be monitored after the acquisition of Cannabis Biosciences Inc. in 2017. Additionally, the market was expecting the results from the company's clinical trials that were said to be concluded by the end of 2017. We said that they could move the share price quite a bit.

With those catalysts in mind and judging by the bull action in TXTM’s stock price, it’s time to take a closer look at Protext again. Check the following stock chart before we provide the company's recent developments:

1 year chart for TXTM

For starters, TXTM was founded in 2001 and is headquartered in Boca Raton, Florida. The company operates two subsidiaries; Plandai Biotechnology Inc. (OTCMKTS:PLPL), and Cannabis Biosciences, Inc. It is engaged in the R&D and clinical testing of bioceutical products, all natural ingredients formulated for pharmaceutical applications and processed under pharma-grade conditions.

In this piece, we will focus on the company's developments in the marijuana sector. It is not only the subsidiary that is moving the share price of TXTM, but it is also an industry which is growing at a high pace after its legalization in many states in the US. If you need more information about other companies operating in the same industry, we encourage you to read some of our pieces on the subject, which will help understand what's going on with TXTM.

Recent Developments

Some days after we released our last piece, on May 23, 2017, the company released new information about its plans in South Africa. It was said that Cannabis Biosciences received a visit from inspectors from the Ministry of Health that was assigned to validate and approve the dedicated ten thousand square foot premises that the company is using. It is an important step before getting the license that will permit Cannabis Biosciences to grow and produce its non-psychoactive cannabis complex.

Roger Baylis-Duffield, CEO of Protext Pharma, noted the company's objectives, and also gave an estimate of the market:

"The company intends to develop non-psychoactive cannabis medicines with initial investigations focused on confirming the anti-inflammatory activities in vitro with cannabinoid receptors for targeting arthritis therapies." Source

The target market is quite large; it was said that 52 million people in the United States suffer from various forms of this disease. This means that the potential sales will be substantial if the company can develop its products.

The market had to wait a few months to receive more news about the developments in South Africa. On July 13, 2017, the company released an update, wherein it was noted that the Department of Health had requested additional details regarding production schematics, operational protocols, and product distribution. The following words are what made the market react:

"The Company intends to submit these final requests this week and we believe that the license will be granted imminently." said Roger Baylis-Duffield, CEO of Protext Pharma

Furthermore, it was noted that the company would be one of a few companies in the world that are legally allowed to conduct research and development and produce cannabis medicines. We believe that this is critical. Many other competitors are now trying to research in this area to acquire know-how. Protext has been doing it for years; it is its main competitive advantage.

Additionally, since the company will be working with the government of South Africa, so its products may be declassified via a Level 6 controlled substance, which should help facilitate selling throughout the world. Please note that producing in South Africa should be much cheaper than in the United States, or Canada.

Regarding the work in the United States, the company also released new information in September. It was said that after extensive investigations in collaboration with scientists at a diabetic research institute in the U.S., the company is modifying its prospective diabetes study protocols. The studies will focus on establishing an active therapeutic dosage point for Phytofare® catechin complex as a first line protocol for Type 2 diabetes while also investigating whether Phytofare® catechins can prevent or manage Type 1 diabetes. These were the most meaningful words said by Roger Baylis-Duffield, CEO of Protext Pharma:

"We want to focus our research on establishing an effective therapeutic dosage point for Phytofare® catechin complex as a first line protocol for diabetes so that we can enter the market on an accelerated basis. The challenge in creating a catechin-based therapy is being able to deliver enough catechins to the system, improve metabolic uptake, and increase residency. We believe Phytofare® can do just that. If we can deliver an all-natural, non-toxic product that eliminates the reliance on insulin injections for many diabetics, this could be a life-changing therapy." Source

Additionally, he noted that if the investigations are successful, the company will be able to enter the wellness market and claim FDA clearance specific to diabetes. This market is not small; around $300 million.

The last press release received is on September 20, 2017. It was an update about the state of the industry in South Africa. The Government had recommended amendments to the Medical Innovation Bill that would change the status of cannabis products that do not have psychoactive properties from a Schedule 7 prohibited substance to a Schedule 4 substance. It was excellent news for TXTM, as it means that the Phytofare® Cannabinoid extract will be non-psychoactive, and will fall under the Schedule 4 classification.

Regarding the cannabis license to grow, the company noted that it is entirely confident that it is still on track. Also, more information was given about the plans. It was said that the 10,000 square foot facility in the Mpumalanga province, where plants will be grown, will include an on-site laboratory. Furthermore, the new facility is expected to be designed to process live plant material, after separation and recovery of the oil-phase as a separate income stream, and to produce the Phytofare® complex.

Conclusion

Currently trading with a market cap of $7.1 million, TXTM is an exciting story among small caps. With no cash in hand, but a large number of intangible assets, $2.533 million, and $1.888 million in total liabilities, the market will want to know how TXTM will finance its new facilities. We believe that market participants will be interested in an equity or debt transaction now that the project seems ready to advance.

To sum up, keep following this name. It could surprise in the future.

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Disclosure: We have no position in TXTM and have not been compensated for this article.Image courtesy of Flickr