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Sunday, October 25, 2020

Micro-Cap Spotlight on Garmatex Holdings Ltd (OTCMKTS:GRMX)

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Garmatex Holdings Ltd (OTCMKTS:GRMX) is a micro-cap stock involved in the production of scientifically-engineered fabric technologies. The stock has been hot out of the gates, so we wanted to take a closer look. According to its most recent release, Garmatex Holdings (GRMX) recently executed a non-exclusive Master Sublicense Agreement with Garmatex Technologies, Inc. whereby the Company was granted various Intellectual Property Rights related to the design, development, and manufacturing of various scientifically-engineered performance technologies and fabrics.

The chart shows 86% during the past month in terms of shareholder gains in the company. The stock’s action appears to be strongly influenced by this agreement, which enables the company to move forward with its strategy in the fabrics space. At this point, we see mostly strong action in shares of the stock. But very little is evident in terms of financial data. We do see some evidence of an operating gain in the company’s fiscal Q3 2017 unaudited data, which represents a positive sequential quarterly move from its prior data.

Garmatex Holdings Ltd (OTCMKTS:GRMX) frames itself as an innovative developer and supplier of scientifically-engineered fabric technologies. The company states that its mission is “to provide new fabric and design solutions for the everyday problems of the growing global consumer market.”

According to a recent release, the company states: “Our mission is to fully leverage the revolutionary Garmatex performance fabric technologies to develop innovative solutions across all markets,” commented Devon Loosdrecht, CEO and President of Garmatex Holdings. “To accomplish this far-reaching mission, our primary strategy will be to position our intelligent performance fabrics as a premium ingredient brand for use by select manufacturers across the world, just as Gore-Tex® has done within the same market. Our opportunity seems even greater than that when you factor in the number of unique performance fabrics that Garmatex has developed.”

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As noted above, the company’s strategy is geared toward an aggressive tact in the fabrics space, and its recent agreement would appear to enable that strategy.

The company’s Form 8-K stated on the transaction: “In exchange, we agreed to the following terms and conditions: (i) the Parties shall enter into Amendment No. 1 to the Arrangement Agreement, pursuant to which, among other things, the term “Termination Date” will be amended to mean May 31, 2017, or such later date as may be mutually agreed to in writing by the Parties; and (ii) we agreed to cancel various loans made pursuant to a Loan Agreement between us and GTBC in the aggregate amount of $953,988.00CDN.In exchange, we agreed to the following terms and conditions: (i) the Parties shall enter into Amendment No. 1 to the Arrangement Agreement, pursuant to which, among other things, the term “Termination Date” will be amended to mean May 31, 2017, or such later date as may be mutually agreed to in writing by the Parties; and (ii) we agreed to cancel various loans made pursuant to a Loan Agreement between us and GTBC in the aggregate amount of $953,988.00CDN.”

“Our mission is to fully leverage the revolutionary Garmatex performance fabric technologies to develop innovative solutions across all markets,” commented Devon Loosdrecht, CEO and President of Garmatex Holdings. “To accomplish this far-reaching mission, our primary strategy will be to position our intelligent performance fabrics as a premium ingredient brand for use by select manufacturers across the world, just as Gore-Tex® has done within the same market. Our opportunity seems even greater than that when you factor in the number of unique performance fabrics that Garmatex has developed.”

As indicated in company materials, Garmatex’s revolutionary performance technologies and fabrics include the patented T3® design, Bact-Out®, CoolSkin®, WarmSkin®, Kottinu™, ColdSkin™, SteelSkin™, Satinu™, RecoverySkin™, SlimSkin™, AbsorbSkin™, and IceSkin™.

As noted in the release, each Garmatex fabric offers performance and have wide applications in multiple clothing and textile categories, including sporting apparel, medical, sleepwear, linens, undergarments, military, designer wear, protective, industrial, safety and concealment.

Devon Loosdrecht concluded, “Our business strategy of controlling the underlying proprietary fabric technology and then selling directly to mills and established brands should enable us to capture value along the entire supply chain, and scale up quickly as the Garmatex brand gains momentum with designers and consumers.”

At this time, carrying a capital value in the market of $30.1M, GRMX has virtually no cash on the books, which must be weighed relative to virtually no total current liabilities. In other words, the balance sheet is basically an empty book right now. In addition, the company is pre-revenue at this point, so financials provide very little guidance. We will update the story again soon as developments transpire. For continuing coverage on shares of $GRMX stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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