Question: What Do CBD And Dental Abutments Have In Common?
Preferred Dental Technologies Inc. (CA: PDTI – $0.04 & US: PDDTF – $0.03) achieved its 52-week high of $0.075 last month after a very positive initial response to its announcement of a joint venture with Gillespie Farmer’s Delight Company Ltd. (GFDCL) to expand its line of organic CBD based dental products.
PDTI has since pulled back to $0.04 on the CSE, forming a base at double the $0.02 stock price it was prior to the news. While monthly volume is not heavy by most listing’s standards, PDTI’s trading has increased significantly throughout May and June. The pullback from $0.075 has died down a bit and creates a good buying opportunity for longer term investors looking to accumulate a position. PDTI released news this week outlining the progress it has made with the GFDCL deal and its global initiatives for commercialization of its EAS abutment system.
Joint Venture Opens Doors For Further CBD Opportunities
This week, PDTI announced that in the six weeks since signing the agreement with GFDCL, great progress has been made and it is in the final stages of execution. Closing the deal should be another newsworthy event that could materially impact demand for Preferred Dental shares. In addition to valuing PDTI’s shares at $0.13 and ensuring the Company secures quality CBD raw materials for its PDT Wellness at a favourable price, this deal has sparked interest from other players in the CBD industry. PDTI is now in numerous discussions that vary from wholesale supply of CBD oils, distillates and isolates to supplying white label services. Both PDTI and GFDCL are engaging with parties that are expressing interest in the distribution of organic, high quality CBD and related products.
PDTI Continues To Make Progress In Commercialization Efforts For Its EAS Abutment System
PDTI’s deal with GFDCL is what caused the increase in interest for its shares recently, but the global expansion for the Company’s EAS dental abutment systems is what could be the major source of revenue in the near term. In the United States, two sales team members are currently being vetted. They will be trained in selling both the EAS Series of dental abutments and the PDT Wellness line. While two new members does not sound like much to outsiders, every sales agent in the medical device industry acts like an industry advocate as they are often selling a wide range of products related to their field. With one being located in San Francisco and the other in Arkansas, these two will likely cover the key territories of California/Pacific region and the Midwest.
On the international side, the possibility of EAS dental abutments sales in Brazil took a big leap forward since meetings were held on May 20th. The owners and founders from one of Brazil’s largest dental implant companies flew to Winnipeg and met with PDTI management, with the takeaway that additional steps will be taken to proceed once an NDA and MOU are signed.
Brazil represents the third largest global market for dental implants, and many Brazilian implant companies have been significant exporters to the rest of South America and beyond. The ease of the PDTI implant, improved patient experience and cheaper cost are three main drivers for acceptance of the EAS abutment system. Moreover, Preferred Dental is continuing to work on developing even lower cost components to meet the local economies of these markets.
Conclusion: Patient Investors Can Be Richly Rewarded With PDTI
In our last article we stated that with PDTI having received recognition in the capital markets with its CBD deal, now is the time for the Company to get new shareholders engaged in the entire story. This corporate update is a positive step in that direction as it shows that PDTI is moving forward with its business plan and is willing to tell the market all about it.
CEO Erik Siegmund reiterated this sentiment with his comments in the press release: “In the weeks since our last press release, I am proud to say that many long running initiatives look to be coming to fruition. Initiating and mobilizing a US sales team with broad US coverage, as well as expansion into foreign markets for our complete line of EAS series of dental abutments will be a major milestone once achieved. Our pending joint venture with Gillespie Farmer’s Delight Company Ltd., represents months of effort from our board, our team members and our advisors and would like to thank them all for their confidence in PDTI and hard work. I look forward to making additional announcements on the progress and closing of these initiatives and more soon.”
Based on these comments, investors should expect a steady flow of news on existing and new developments throughout the rest of the year. We would like to remind investors that at $0.04, PDTI is valued at less than CAD $3 million market cap. It is practically impossible to find a company that is valued so cheaply while making significant strides on multiple fronts in its business. This is basically a shell valuation for a company that is clearly much more than a shell.
We believe that risk-tolerant investors who have the patience to accumulate and hold a position in this thinly traded Canadian microcap stock will be richly rewarded. The market already got a taste last month of what PDTI can do when the Company announces a major deal. We think that was just a preview of things to come. Smallcaps Recommendation: BUY.
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