KeyStone’s Take on Sona Nanotech (SONA:CSE).

This week in KeyStone’s Stock Talk Podcast, we contrast Sona Nanotech (SONA:CSE), a healthcare stock to be cautious about with other names in the sector. Plus, we discuss oil and whether it presents any investment opportunities.

 

Sona Nanotech Inc. (SONA:CSE)

Current Price: $2.16

Market Cap: $116 Million

What does the company do?

Sona Nanotech Inc. listed on the CSE in September 2018 and is in the Life Sciences Industry. Its primary objective is to develop and produce its own lateral flow tests utilizing Sona’s gold nanotechnology, which is supposed to increase performance and reduce the time to market.

The company is trying to bring a COVID-19 testing kit to market that can reduce the wait time for test results down to minutes.

Sona is working with a consortium of international and Canadian partners to develop a functional prototype for an antigen detecting, rapid-response, lateral flow test that is expected to provide in-field test results in minutes, without the use of specialized laboratory equipment or technicians.

The Company is working with a consortium of diagnostic test developers including GE Healthcare Life Sciences, The Native Antigen Company, AffinityImmuno, Bond Digital Health and scientific advisors Fiona Marshall and Sandy Morrison.

Performance:

The share price started its ascent in mid-to-late February from $0.20. With it now up over 900%, and up 230% in the past month alone.

What is driving the stock?

The primary force driving the stock is the outbreak of COVID-19 and promise for its COVID testing kit. More investor enthusiasm has been spurred after Sona was awarded a $4.1 million grant from NGen for Rapid Development and Launch of its COVID-19 test kit. This $4.1 million is a part of Trudeau’s $2 billion COVID funding to fight the virus.

Financial Results

Q1, 2020

  • Revenue is non-existent.
    • Actual manufacturing of Sona’s Covid-19 rapid-response antigen test is not expected to commence until firm orders with deposits have been secured. Sona will provide further updates as warranted.
  • Net loss of $329,000 for the quarter or a loss of $0.01 per share.
  • The company has net debt of over $400,000 and an $800,000-shareholder deficiency, which occurs when a company has been unable to produce profit for multiple periods.

Conclusion:

Rather than giving closing remarks on Sona, I want to open it up to Ryan and Aaron for their thoughts on a stock like this.